When port partnership makes sense

Just a little more than one year ago, the ports of Seattle and Tacoma joined together to launch The Northwest Seaport Alliance (NWSA) – an unprecedented demonstration of regional solidarity.

It was a bold move, driven by concern that both gateways were losing market share in the Transpacific. Another worry was about the economic impact on Washington’s workers, with 40 percent of that state’s family-wage jobs connected to international commerce.

As reported here in 2015, this began as a joint marketing program designed to leverage the Puget Sound’s logistical advantage. Since then, the scope has been greatly enlarged. Indeed, all indications suggest significant success for the coalition of stakeholders in the Pacific Northwest trade and logistics community.

With the NWSA now managing the marine cargo facilities and business in both the Seattle and Tacoma harbors, cargo volumes are recovering and the alliance is investing in infrastructure to continue growing.

The arrival of CMA CGM’s 18,000 twenty-foot equivalent unit (TEU) vessel, the Benjamin Franklin, late last winter demonstrated that the Alliance mega terminal 18 in the North Harbor could handle the new generation of giant container ships.

Meanwhile, construction continues on the General Central Peninsula in the South Harbor.  Commissioners approved $141 million in improvements that include a strengthened, realigned dock and four new cranes to handle two such mega vessels simultaneously.

Design is 90 percent complete the modernization of Terminal 5 in the North Harbor, and work has begun on the final Environmental Impact Statement. The planned improvements will accommodate heavier cranes with a longer outreach and provide deeper drafts for vessel berthing.

One might think that the newly expanded Panama Canal could pose a threat to the NWSA, but quite opposite seems to be happening.  The first-call visit by the Wallenius Wilhelmsen Logistics (WWL) MV Thalatta last summer indicates the larger locks in Panama open new opportunities for both roll-on/roll-off (Ro/Ro) and container cargoes moving through the Pacific Northwest.

“The wider Panama Canal provides our gateway with expanded capacity to global markets, particularly in Europe, the Mediterranean and South America,” says Bari Bookout, the NWSA’s chief commercial officer for non-container. “The new locks allow carriers like Wallenius Wilhelmsen Logistics to develop larger, more efficient vessels to meet shipper demand and regulatory requirements.”

With the recent launch of the alliance Operations Service Center, the ports are even more focused on achieving metrics around efficiency and reliability. With input from the Executive Advisory Council, made up of industry stakeholders that include marine terminal operators, railroads, trucking, shipping lines, retailers and labor, they are making progress toward rail, ship, trucking and crane performance across their gateway.

At the same time, cargo flows simultaneously advance the NWSA mission for environmental and safety goals, such as reduced idling emissions and fuel consumption.

Thay have also have worked with community and government leaders to keep cargo moving outside their terminal gates. For example, the city of Seattle approved a heavy haul corridor to accommodate overweight trucks. The city of Tacoma partnered with them to rebuild Port of Tacoma Road to heavy haul standards. And the state Department of Commerce provided grant funding to build the North Lead Rail project, which has begun construction and will add vital rail capacity in the South Harbor.

When Hapag Lloyd, Hamburg Süd and U.S. Lines needed greater access to electrical outlets and a more robust truck gate system for refrigerated export cargo, the NWSA was able to support the shipper’s desire to relocate to the North Harbor. That accommodation met the shipper’s needs and allowed the alliance to keep the business.

Before the alliance was created, each port likely would have competed to retain – or gain – the shipper. That process might have led to prolonged negotiations and driven down local rates. Instead, the NWSA was able to focus on finding a solution that helped logistics managers and kept the business and jobs in Puget Sound.

This explains in large part why the ports of Tacoma and Seattle – when combined as The Northwest Seaport Alliance – ranked highest on the U.S. West Coast and second overall in the West Coast category in Logistics Management’s 2016 “Quest for Quality Awards.”