Seattle, Tacoma ports to ‘unify management’ with Seaport Alliance

(Photo by Peter West Carey, shared via Twitter)
On Thursday, the West Seattle Chamber of Commerce hosts Port of Seattle co-president Stephanie Bowman at its monthly lunch meeting. Questions about the future of shuttered Terminal 5 were already expected – and now there’s something new: Today’s announcement that the Seattle and Tacoma ports are forming a “single Seaport Alliance.” Here’s the news release from the Port of Seattle:

The Seattle and Tacoma port commissions plan to unify the management of the two ports’ marine cargo terminals and related functions under a single Seaport Alliance in order to strengthen the Puget Sound gateway and attract more marine cargo for the region.

The Seaport Alliance will manage marine cargo terminal investments and operations, planning and marketing, while the individual port commissions will retain their existing governance structures and ownership of assets.

This unprecedented level of cooperation between the state’s two largest container ports is a strategic response to the competitive pressures that are reshaping the global shipping industry.

Taken together, marine cargo operations at both ports support more than 48,000 jobs across the region and provide a critical gateway for the export of Washington state products to Asia.

“The ports of Seattle and Tacoma face fierce competition from ports throughout North America, as shipping lines form alliances, share space on ever-larger vessels and call at consolidated terminals at fewer ports,” said Port of Tacoma Commission President Clare Petrich. “Working together, we can better focus on financially sustainable business models that support customer success and ensure our ability to reinvest in terminal assets and infrastructure.”

“Where we were once rivals, we now intend to be partners,” said Stephanie Bowman, co-President of the Port of Seattle Commission. “Instead of competing against one another, we are combining our strengths to create the strongest maritime gateway in North America. The Seaport Alliance is the result of our shared commitment to maintaining the economic health of our region through a thriving maritime industry.”

The Seaport Alliance is the outgrowth of talks held under the sanction and guidance of the Federal Maritime Commission (FMC), the independent federal agency responsible for regulating the U.S. international ocean transportation system.

Subject to further FMC review and approval, the two port commissions will enter into an Interlocal Agreement (ILA), which is intended to provide the ports with a framework for a period of due diligence to examine business objectives, strategic marine terminal investments, financial returns, performance metrics, organizational structure, communications and public engagement. Following the due diligence period, the two port commissions intend to submit a more detailed agreement for the Seaport Alliance to the FMC by the end of March 2015.

During the due diligence period, John Wolfe, Port of Tacoma CEO, and Kurt Beckett, Port of Seattle Deputy CEO, will co-lead the planning work and coordinate with both port commissions.

Commissioners from both ports expect to hold a public meeting next spring to hire Wolfe as the CEO of the Seaport Alliance following the FMC’s approval of the agreement.

The two commissions expect to formally adopt and move to submit the ILA to the FMC at a joint public meeting Oct. 14.

Citizen and stakeholder public review of this proposal will be undertaken throughout the due diligence period. Information about public meetings, how to submit written comments and other related news will be regularly updated on the Port of Tacoma and Port of Seattle websites.

By the way, if you’re interested in the aforementioned WS Chamber lunch on Thursday, it’s at port-owned Jack Block Park, 11:30 am – more info here.

westseattledood October 7, 2014 (12:43 pm)

Not super surprising news, but great to see. And none too late, as they say.

Our Puget Sound Ports matter.

dsa October 7, 2014 (1:02 pm)

I wondered if this option would be a good idea when the POS gave Tacoma the remaining operations at pier 5. It almost seems like a welcome gift.

wakeflood October 7, 2014 (1:15 pm)

So, this wouldn’t have gotten this far unless they’d discussed and likely agreed, some apportionment of the cargo business – or at least what they WON’T be competing on.

In this case, Tacoma must be ceding the EEE Class ships to Terminal 5 – as per the current plan?

If yes, the next question is what did Tacoma get in exchange for not competing for that biz?

Is POS planning on reducing their exposure in SODO, which is problematic and ceding that work to Tacoma?

Or maybe POS is worried that they won’t be able to secure the lessor for Term. 5 upgrades and wants to get some offset from Tacoma for letting them get that biz?

Just wondering what the handshake deal entails. Anyone have any insight?

WSEA October 7, 2014 (1:19 pm)

I hope all the metro agencies take the hint and combine forces.

ChefJoe October 7, 2014 (1:53 pm)

Alliance you say ? Sounds more like a shield against the cries that both ports be managed by a single entity if the governance remains separate. Double the number of managers, yay.

Jim October 7, 2014 (2:39 pm)

Wakeflood – you are on the right track. They are not telling us what deals have been made to ensure we spend all that money to chase a dying business model that will not yield a good return on investment.
POS needs to release all those acres at Terminal 5 to more appropriate economic uses.

heather October 7, 2014 (2:47 pm)

Good move.

dsa October 7, 2014 (3:59 pm)

I’ve never liked the acronym POS. Would would the new one be POST or POTS?

wakeflood October 7, 2014 (4:44 pm)

I suspect that the reason the PoS submitted their plan publicly to pursue the EEE class upgrades is because Tacoma would need similar upgrades as well so there’s not particular savings to let Tacoma have it. BUT the other smaller vessels using Tacoma over the downtown Seattle container areas could be a benefit for both as that is already problematic for Seattle and will continue to be even moreso as SODO gets developed.

I suspect they carved up the pie accordingly? Would love to see what the forecasts is for traffic and container units coming to the West Coast over the next 20 yrs. is?

Can we have an honest talk about this with the Ports? I’d like to know what impacts they expect us to absorb and what the best estimate of economic benefit will be to both Seattle and Tacoma. Or are we as citizens not allowed to ponder that stuff?

JayDee October 7, 2014 (5:08 pm)

Look, this is a positive. No more local poaching or playing one port off the other. The best use for Terminal 5 is as a redeveloped terminal. The property is encumbered by pollution that renders non-industrial uses non-viable. Port jobs pay better than other jobs and have a multiplier effect.
–
“The Port of Seattle is a public agency that creates jobs by advancing trade and commerce, promoting industrial growth, and stimulating economic development.” Nothing about a profitable business model. Now I hope they don’t lose money, but the Port is a great asset that we have that we should not lose by the machinations of others to turn SODO into a condo/commercial office disneyland (Cough, Cough, American Life) and keeping the Seaport viable will limit the gentrification of working industrial properties that we need.

brandon October 7, 2014 (9:28 pm)

Ha! Looks like PoS blinked!

j October 7, 2014 (10:41 pm)

Have you ever sat and asked yourself why the skyscrapers are located there and not….say….in Cle Elum??? Have you looked at almost every other major city in the world and seen what they have in common? This city was built on marine industry and thrives on the marine industry. You locate yourself by industry then expect industry to move. How bout all those ugly noisy Boeing buildings? Should they go too?

wakeflood October 8, 2014 (8:40 am)

So, JayDee, j, Do you know what is the forecast for container cargo on the West Coast?

Every $ investment requires some sort of business plan based on forecasts. I’m looking for an honest discussion of the facts and assumptions as best they can be predicted – and just as importantly, what the range of those forecasts is.

What’s wrong with having that discussion with the residents? If the Port investments pencil, all things considered, then they pencil.

I get asked to justify my dept. budget at least once a year, with forecasts and probabilities of my assumptions. Just sayin’.

I personally have no axe to grind with the Port and support good paying jobs and industry. Just don’t want to find out that we’re chasing work that wasn’t going to come here anyway, or wasn’t going to manifest anywhere, period.

Jim October 8, 2014 (9:00 am)

Seattle is not “thriving” on containers passing through it. POS is using up way more valuable land than they need. And now they want to throw our money to chase a business model with a dim future.

WSB October 8, 2014 (1:54 pm)

For those asking about more details – some added documents are on the Port website. I hope to look at them later for any points of specific WS interest but in the meantime, maybe they answer some of the questions asked here: http://www.portseattle.org/About/Pages/Seaport-Alliance.aspx

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