business backgrounder | economy
united front
Proposed in 2014 and slated for final approval this year, the
Seaport Alliance will combine management of the ports’
marine cargo terminals and related operations to present a
united front to shipping customers: Instead of rate-shopping
both ports, a practice that pitted the ports against one another
and drove rates downward, customers will interact with the
gateway through a single interface.
Shippers will be presented with a wider range of options
and have more choices among terminals that best suit their
needs. And looking collectively at the terminals will enable the
commissions to plan and prioritize necessary infrastructure
investments to better serve the global shipping markets.
The switch involves a paradigm shift for the two organizations, says Stephanie Bowman, co-president of the Port of
related to the Seaport Alliance, including business objectives,
terminal investments, financial returns, and organizational
structure. This spring, the commission plans to submit a more
in-depth agreement to the Federal Maritime Commission.
When the initiative is approved, the commissions intend to
hire Port of Tacoma CEO John Wolfe to lead the Seaport
Alliance as CEO.
past pressure, future growth
To understand the magnitude of this new endeavor, it’s vital to
look at the historical context, says Port of Tacoma Communications Director Tara Mattina. For two ports to even share rate
information with one another, let alone collaborate to this extent,
is highly unusual, she notes. “An alliance like this has never been
done. Competition between ports is intense.”
Together, the Seattle-Tacoma ports
form North America’s third largest
container gateway. The problem, says
Container volumes on North America’s West Coast
Bowman, is that historically, the ports
have increased more than Seattle and Tacoma’s share.
haven’t worked together. A half-century
ago, the competition may have been
16.5%
15.8%
beneficial, spurring each organization to
29.8
29.1
28.9
28.5
14.9% 14.8% 14.7% 14.9%
15%
27.8
27.4
27.5
work harder and smarter. “But certainly
26.2
14.2% 13.5% 13.0% 13.3% 13.0%
in the last 10 years that competition has
24.1
23.6
12.7% 12.4%
21.9
led to job loss, customers have moved
11.6%
19.6
from one port to another, and that’s
10%
17.7
17.4
driven down the prices.
“Customers were coming to us and
North America West Coast TEUs
Seattle & Tacoma TEUs
saying, ‘Can you beat what Tacoma is
doing?’ Low prices may seem like a
5%
short-term win for the customer, but in
4.2
4.1
3.9
3.6
the long term, we can’t make the invest3.6
3.6
3.5
3.6
3.5
3.2
2.9
3.1
2.9
2.6
ments in infrastructure that customers
0%
need for the future.”
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Global competition has hit the region
Source: AAPA, 2014
hard. Between 2000 and 2013, as West
Coast container volumes have grown
71.2 percent, Seattle and Tacoma’s combined market share
Seattle Commission, who was closely involved in the planning
fell from 16.5 percent to 11.6. “That’s 5 percentage points, repstages along with her co-president Courtney Gregoire, Port of
resenting a third of ou