Seattle Injury Lawyer Blog
In March, the Grand Alliance shipping lines decided to move from Seattle to Tacoma. When that happens in July, it will take about 20 percent of the container business from the Port of Seattle, more if lines associated with the alliance, Zim and Hamburg Sud, decide to go, too.
The good news for the state is that the Grand Alliance will still call in Washington. The bad: The state’s two biggest ports are largely fighting each other for existing business rather than adding much. For example, in 2009, Maersk Lines moved from Tacoma to Seattle.
Seattle is North America’s seventh-biggest container port; Tacoma ranks No. 11 and is soon to rise. Both are critical elements for one of America’s most trade-dependent states. The ports generally earn revenues from tenants that operate terminals and lease space, as well as from tax-levy dollars usually used for general obligation debt or infrastructure and transportation.
Talk in parts of the industry suggests that Tacoma put in such an extremely low bid to win the Grand Alliance that its terminal operator, Washington United Terminals, and ultimately the port, might not make money on the deal. Seattle’s private terminal operators likely don’t have the ability to match the low costs of their counterparts in Tacoma, at least for now. Jobs will be lost with the Grand Alliance move.
Some advantages Tacoma has drawing business from the Port of Seattle include excess capacity and dockside rail service, eliminating the nonunion, short-haul trucking of Seattle. Dockside rail is less expensive, more efficient, and more environmentally friendly.
Tacoma is primarily a seaport, focused on that business, unlike Seattle with diverse operations including Seattle-Tacoma International Airport and cruise facilities. Tacoma’s port is separated from the urban core and faces no pushback from waterfront gentrification.
Advantages of the Port of Seattle are that it is built out with advanced infrastructure to handle the biggest ships. Major rail yards, such as the Burlington Northern Santa Fe’s Seattle International Gateway, are close to the docks and have state-of-the-art gantry cranes to transfer containers. Port officials say the congestion in places such as Harbor Island will be short-lived.
Beneath this rivalry is one harsh reality: Puget Sound ports have been slowly losing market share against most of their West Coast rivals since the mid-2000s.
In early 2015, a wider Panama Canal will allow Asian shippers, which account for more than 90 percent of Washington’s container traffic, to send more goods directly to the East Coast.
Canada’s two big railroads have bought and consolidated American rail lines to make it easier to send goods from Canadian ports to the U.S. Midwest, the bread-and-butter market of Puget Sound imports. Of special concern is Prince Rupert, closest to Asia, heavily subsidized by the Canadian government and with a rail straight shot to Chicago and beyond.
The Port of Los Angeles, which already has a coveted home market of 13 million consumers, recently committed to spending $3 billion for terminal, rail and other infrastructure.
All of these changes will undoubtedly impact Washington’s maritime industry. Seattle Times columnist Jon Talton suggests that the ports of Seattle and Tacoma consolidate so that they can together fight for market share, bringing more jobs to Washington, rather than wasting their energy fighting each other for business.
For Talton’s complete article see http://seattletimes.nwsource.com/html/jontalton/2018127187_biztaltoncol06.html