Can new CEO make a good Seattle port great?

By Stephen H. Dunphy, December 10, 2014, Crosscut

Since its founding, every executive director at the Port of Seattle has come from within the industry. Richard Ford, a lawyer who served from 1977-85, was the first head of the Washington Public Ports Association. Jim Dwyer, also a lawyer, worked at the port for 16 years before he became the leader from 1985-88.

 

Zeger van Asch van Wijck, 1989-1992, came from the Port of Rotterdam, serving a rocky period in which his European standards ran afoul of the more open U.S. style of public entities. Mic Dinsmore, CEO from 1992 to 2007, was promoted from within. Tay Yoshitani, who stepped down this year, was the former deputy director of the Port of Los Angeles.

 

That all changed this year with the appointment of Theodore J. Fick, the new Chief Executive Officer of the Port of Seattle, and the first CEO from the private sector. Fick’s arrival is a radical departure for the port as it faces some of the most crucial decisions in its 100-plus year history. With all that lies ahead in the coming years, a business leader used to strategic thinking, tough decisions, new product development and leadership might be just what the port needs.

 

Fick, who says he has a lot to learn about the job — politics, community relations, environmental concerns — is on the fast track to understanding his role. He sees the main goal over the next 25 years as creating 100,000 new jobs. That’s one of the major goals of the Century Agenda, adopted by the port as part of its centennial in 2011.

 

“We have good jobs here,” Fick said. “I’ll be working to protect and grow those jobs while keeping in mind the best interests of our customers.” Spoken like a true businessman.

 

Fick has a varied background in business. A Tacoma native, he worked at his family’s Tacoma-based foundry, Fick Foundry Co., then moved to Bellevue-based Paccar for many years, holding leadership positions at both the headquarters and the Kenworth truck division. In 2000, he left the Northwest and has since held multiple leadership positions in logistics and manufacturing companies. Most recently, he was CEO of Polar Corp., a trailer and component parts manufacturer based in Minnesota.

 

Now, he’s back in the Northwest and looking forward to his responsibilities, despite the fact that he walked into a changing situation. Fick began his new job on Sept. 29. On Oct. 10, less than two weeks later, the Port of Seattle and the Port of Tacoma announced they were forming a Seaport Alliance to manage the container cargo at both ports.

 

Fick said the alliance was a good move. “We can get back some of the business we have lost, and regain a competitive advantage for the region,” he said. “This is not an ‘either-or’ situation. It is not win-lose, but win-win.”

 

Fick — and port commissioners from both ports — agree the region is the real winner here. The alliance ends some of the destructive competition between the two ports and sets the stage for growth in years ahead.

 

Fick said he sees the port with four main businesses — the airport, cruise ship and fishermen’s terminals, real estate and the new Seaport Alliance (which he thinks of as a subsidiary of the port). “The assets are on my balance sheet and I will stay dialed in,” he said, adding that he thought the competition between the two ports was not sustainable. The only way to compete with each other, he said, was on price, to take pricing down. That could not work with the new competitive environment the ports were facing.

 

“I’m all in and the people who work on this are all in,” he said. “They’re betting their careers on this.” (And, by extension, his.)

 

Fick has a lot to work with. A report issued in October by Martin and Associates found that Port of Seattle-owned facilities were responsible for 129,744 direct jobs in 2013. That’s up from 111,317 in 2007. When you widen the lens to include induced and indirect jobs, those numbers get even more impressive. The airport alone created 171,796 of those jobs in 2013. And each cruise ship that stops here (there were 169 of them in 2014) generates a $2.4 million impact.

 

Fick said he can use his experience to come up with out-of-the-box solutions for the port. He also believes in leadership, motivation of employees and new product innovation. But he admits that he has a lot to learn. “I’ve spent 80 percent of my time so far on outreach,” he says, trying to understand the community and its issues.

 

Fick also said he believes the port can be better.

 

“One of the detriments to being a great organization is being a good one,” he said. That’s one of the linchpin tenets of the “good to great” idea, that good companies or organizations become complacent. The Port of Seattle is a good organization, but it can become great, he believes.

 

Another of Fick’s business tenets: Organizations have to have the “right people on the bus.” Is that code for layoffs and executive changes? “I will need to assess that,” he said. But there’s one thing he is certain of: The port will become a much leaner operation. “Our goal is to double in size, but I can tell you we are not going to double in employment.”

 

Fick faces a number of issues as port CEO:

 

Seattle-Tacoma International Airport: The airport is one of the few of its size in the nation operating out of one terminal. The port will spend nearly $2 billion over the next few years in needed upgrades, including the baggage system, international arrivals area and additional gates. Fick will likely have to devote more and more time to Sea-Tac — it is by far the largest asset at the port, accounting for about $414 million in revenues in 2013 vs. about $100 million for the seaport.

Transportation: The Seaport Alliance raises the stakes on the regional transportation plan, especially the completion of SR 167 to Tacoma and SR 509. Both are critical to freight mobility. As CEO, Fick has a role in Olympia as a respected spokesman for a critical part of the state economy.

Railroads: Rail is essential to the operation of both ports. Seventy percent of the cargo delivered here does not stay here, usually moving by rail to the Midwest. But railroads such as the Burlington Northern Santa Fe now rank freight in this order — oil, coal, grain and containers. Some improvements to the rail system to accommodate oil and coal will also help container traffic.

Federal: Seattle and Tacoma, with natural deep-water ports, are negatively impacted by the Harbor Maintenance Tax, used to provide funds for dredging (not needed here) and other improvements. Although Sen. Patty Murray has helped with provisions so that the ports can compete for infrastructure funds, the tax still adds $100 to $120 a container. It puts the ports at a competitive disadvantage compared with Canadian ports.

Labor: The current dispute between the Pacific Maritime Association and the International Longshore and Warehouse Union (ILWU) is affecting port operations. The port is caught in the middle of the dispute with little role to play other than urging quick resolution. Fick joined Port of Tacoma CEO John Wolfe in a letter to President Obama in late November urging the appointment of a mediator.

Larger ships: There is a key decision to be made on the site of a terminal to handle increasingly larger ships. The port now has the basic equipment to handle mega ships, but a dedicated terminal would enhance that advantage. The now vacant Terminal 5 is seen as one of the possible sites for the new terminal. Tacoma’s Terminal 3/4 is another possibility.

Fick obviously has a learning curve not only with running the port itself but also with the community. The politics can get nasty — recall the port’s decision to oppose the creation of a new basketball arena in the Sodo neighborhood. At his first press conference shortly after he was named to the job, Fick said: “I’m ready to dig in and roll up my shirt sleeves and get to work.”

 

Port commissioners, customers and industry officials said Fick was a good, positive choice. Many wished him good luck in the new job. He may need it.

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