By Emily Heffter and Paige Cornwell, January 17, 2014, Seattle Times
The ports of Tacoma and Seattle announced Thursday a plan to work cooperatively, with federal government oversight, and talk to each other about rates and operations. The agreement demonstrates an unprecedented level of cooperation between the two ports, which have always been fierce competitors.
Only a year and a half ago, the Port of Tacoma won the business of the Grand Alliance, a shipping line that had been one of the Seattle seaport’s major customers. That deal soured already tense relationships between the two ports, and at one point the Port of Seattle filed a public-records request to learn more about how the Port of Tacoma got the contract.
Port of Seattle Commissioner Tom Albro called the discussion agreement a positive move forward for the state.
“Our communities can have confidence that our two port commissions recognize the importance of our ports in our communities individually, and accept responsibility to steward the resources we have been given,” Albro said Thursday evening.
Some Seattle port commissioners have expressed interest in a merger between the two ports, but a joint statement released Thursday made it clear that was not the plan, and Albro said a merger is “off the table.”
“The important thing is we address the market cooperatively and that we serve the needs of Washington state,” Albro said. “A merger is not necessary to do that.”
Instead, the two ports will talk strategically in the interest of helping Puget Sound ports compete with other West Coast ports, especially those in British Columbia.
In order to work together, the ports have to file a request with the Federal Maritime Commission. Recent developments, including increased competition from expanding ports across North America and shipping lines losses over the past three years, “threaten the future of the Pacific Northwest trade beyond anything they have seen” in the usual Pacific trade boom/bust cycles, the ports wrote in a letter to the commission.
“While the ports of Tacoma and Seattle have many advantages, such as naturally deep water and strong highway and rail connections to the second-largest concentration of warehouses and distribution centers on the West Coast, we must leverage our strengths in the face of continued soft demand and increasing competition,” the statement said.
In the past, Seattle port commissioners have said the two ports should be divvying up investments in new equipment, and even which shipping lines are better suited for each port. But Tacoma commissioners have been less enthusiastic about such arrangements, arguing that the two ports had different cultures and wouldn’t be good business partners. Now, the true competition, the ports wrote in the commission letter, is happening “well beyond our individual borders.”
“This represents the desire by both ports to find a way to work together; it allows for discussions to happen where the details, the meaningful details, can be discussed,” Albro said.
The Seattle seaport, which is 1,534 aces of waterfront land and nearby properties, handled 1.89 million containers in 2012. The Port of Tacoma, encompassing 2,400 acres of land, handled 1.7 million containers the same year.