Trade: Keeping the Port of Seattle Afloat

For years, pundits, politicians and critics have been nagging the ports of Seattle and Tacoma to stop competing and start cooperating with one another against ports of the West, Gulf and East Coasts that are grabbing or threatening to grab a greater share of the North American seaborne freight market.
Now the ports have complied with those wishes sort of.

The Seaport Alliance, a newly formed entity controlled by the two port commissions to manage most of their maritime operations, was announced in October to great regional ballyhoo and the bestowing of adjectives like historic. What it didnt offer was much in the way of detail on how the alliance will make the port(s) more attractive to shipping customers, more competitive with those other ports or more affordable to taxpayers.

It wont be accomplished, for example, by cutting operating expenses and, thus, rates for shipping lines and terminal operators.

There are no plans to lay off employees at either port related to the formation of the Seaport Alliance, Port of Tacoma spokeswoman Tara Mattina says.

In fact, costs may go up if the alliance hires its own staff some functions may be contracted out or if Tacoma hires its own executive director instead of letting John Wolfe, the alliances designated head, continue as the Port of Tacomas CEO.

Nor does it mean closing or selling terminals.
The Seaport Alliance is expected to prioritize reinvestment in current facilities, and any repurposing of terminals would be for maritime-oriented uses with a focus on working waterfront jobs in both Seattle and Tacoma, says Mattinas statement (in response to questions posed to both ports by Seattle Business). The whole purpose of the alliance is to keep and grow valuable maritime jobs in the region. What those facilities look like exactly is still to be determined.
Seattle port commissioner Bill Bryant says it certainly doesnt mean that Seattle will slowly cede the maritime business to Tacoma.

Were going to have to find maritime industrial uses for properties that might be repositioned, Bryant says. Jobs in maritime industrial are critical to our economy and to having a strong middle class. There are more jobs in maritime than there are in aerospace and we need to preserve those jobs.
Then what exactly will the alliance do?

Two things, Bryant says. One is to come up with a plan for how much gets spent where for new and upgraded facilities.

We are about ready to embark on a period where were going to have to make some investments to keep the business weve got, Bryant says. Seattles Terminal 5 has been vacated by a tenant bringing in ships too large for that facility; the 172-acre site abutting West Seattle is now idle while the port works on a multiyear plan, including dock strengthening and berth deepening. What I did not want to see happen was for there to be redundant investments 40 miles apart, he explains. This alliance will give us the opportunity to ensure were investing public funds wisely and in a coordinated manner.

The other is as a lobbying entity with state government (to get completion of State Routes 167 and 509 to I-5), with the federal government (on issues like the Harbor Maintenance Tax and for infrastructure money), and with the railroads (on relieving bottlenecks).

Of course, the ports are already vocal lobbyists for their causes separately. Even combined, theyll have no shortage of competition, for federal dollars anyway.

When this is finalized, we will be the third largest port in North America and it will make a difference, Bryant asserts.
Dave Gering, executive director of the Manufacturing Industrial Council of Seattle, sees some merit in that function. His organization is acutely attuned to the issues of the Port of Seattle, not only because member companies do business with and through the port but also because the SoDo neighborhood in which they operate faces the same issues of freight mobility, environmental regulation and competing land uses as the port.

The things that Seattle and Tacoma might be able to do together involving state and federal agencies, issues, regulations, they can do way more working together than they could separately, Gering says. Its a shame they havent had this kind of working relationship for decades. When you look at how challenging it is for industrial businesses and industrial jobs and that kind of basic prosperity, and how tough it is to maintain that base in the state of Washington, also trying to deal with the federal government, this is a real positive step forward.

Gering says the difficulty of piecing something together shouldnt be discounted, something he saw firsthand while working for King County at the time of the merger with Metro. These things are really rare, where government entities that have in this case 100 years of history decide to enter into a new working relationship.

He suspects that a principal driver behind the decision to create the alliance was competition from the British Columbia ports of Vancouver and Prince Rupert as well as concern over how theyre able to build facilities that shippers prefer. It had to be something that looked like a clear and present danger, he says.

The danger, not just from north of the border but from Oakland, Los Angeles/Long Beach, and Gulf and East Coast ports accessible to larger ships through the Panama Canal, may be clear and present or will be when the canal widening is finished. What the alliance can do to respond to that competition is not clear. Nor is it clear what long-term future the ports, Seattle especially, have in the maritime business.
Bryant contends its not just Seattle and Tacoma that are trying to answer long-term uncertainty about their future. In voting to confirm Ted Fick as the Port of Seattles new chief executive (see page 65), Bryant says, In 10 years, this port is not going to look at all as it does today. He says thats true of all ports because of consolidation among shipping lines and the use of bigger ships. L.A./Long Beach will still likely get calls because of the size of the immediate market. Everyone else, however, is going to be scrambling for pieces of a smaller pie of fewer port calls.

Which is why so much murkiness remains about the alliances ability to actually make the Puget Sound container ports more competitive and retain business. If its all about rates, eliminating price competition with one another neither eliminates the competition with other ports nor stops shipping companies from comparing deals they can get from different ports. If its about how fast the cargo moves once it leaves the port gates, much of that is beyond the regional ports control or influence, whether theyre bellowing for more money and attention in concert or separately.

The alliance may have more details and decisions in place when it submits a formal plan to the Federal Maritime Commission by the stated goal of March 31, 2015. Or it may continue to go with vagueness, either because thats all thats desired from the alliance or thats all thats possible or the obstacles to serious action proved too great.

The ports, Seattles in particular, may well look and operate in a considerably different fashion in just 10 years. Its now up to them to say if they have some specifics as to what that new look might be.