Ports chart a new course: Seaport Alliance was 100 years in the making

Steve Wilhelm, December 26, 2014, Puget Sound Business Journal

Fear can make allies out of competitors, and fear is what drove the ports of Seattle and Tacoma to create the Seaport Alliance last year.

For decades Washington state’s two largest ports have been goring one another while fighting for dominance in the state.

Meanwhile, Southern California ports had continued to grow while ports in British Columbia, just to the north, came out of nowhere to become major competitors.

The result: Puget Sound ports were drifting backwards like rowboats in a gale, with West Coast cargo market share dropping from 15 percent in 2000 to 9 percent in 2013, according to data from the American Association of Port Authorities.

To counter this, port leaders behind closed doors came up with an audacious strategy: create a new entity to operate both seaports as one, even though the two ports would continue as separate entities. The Port of Seattle would continue to operate Seattle-Tacoma International Airport.

“Anything that brings more volume through the Pacific Northwest is what I’m interested in, and I think those two entities operating jointly will put more energy into doing that,” said John Odland, vice president of MacMillan Piper, a cargo-handling facility that operates at both ports, after the idea became public in October. “It’s a great thing because it will make the ports in Puget Sound compete outside Puget Sound instead of within.”

Creation of the Seaport Alliance has encountered relatively little public opposition, which is striking for a region with vested interests in the current system that go back to the early 20th century.

The idea of port collaboration is not a new one, and some kind of port merger has been sporadically proposed for decades.

But an actual merger would have required significant legislative action because Washington ports are regulated by the Washington State Port District Act of 1911, which was passed partly in reaction to railroads’ dominance of the Seattle waterfront.

The result is a complex and unique network of elected commissions and taxing districts– 75 of them across the state – with many ports far from any waters deep enough to handle a cargo ship.

Among the possible strengths of the new Seaport Alliance is coordination of rates, which helps avoid manipulation by ocean carriers. The alliance could also help coordinate investments so the terminals and improvements that are needed could actually be built. It could offer a united face to the Washington state Legislature and the federal government.

That last point is particularly important because infighting between the two ports has hampered their ability to win key funding, such as money to complete the freight traffic arteries SR167 and SR509.

“What we’ve got to overcome is competition between elected officials wanting to look out for the constituents they represent,” said Stephanie Bowman, co-president of the Port of Seattle Commission and former manager for federal government affairs for the Port of Tacoma. “And to look rather at what’s best for the region.”

The Federal Maritime Commission approved the concept Dec. 2, allowing the two ports to start formal negotiations.

The ports plan to submit a detailed agreement by the end of March.

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