Wind in the Sails: Northwest Seaport Alliance Pumps Up Trade

The partnership of Seattle and Tacoma ports  – called the Northwest Seaport Alliance – is positioning itself as a major trading post on the West Coast.

Northwest Seaport Alliance

Launched in 2105, the Northwest Seaport Alliance (NWSA) serves as a joint venture and partnership between the ports of Tacoma and Seattle. NWSA serves as the fourth largest gateway in North America. The partnership merges marketing opportunities and promotes infrastructure projects to benefit both ports.

  • Seattle and Tacoma harbors support about 48,000 jobs, and the air cargo operations added 5,200 jobs.
  • Sixty percent of the goods imported though the NWSA are delivered to the rest of the country.
  • Total container volume grew 1 percent in 2017 for a total of 3.67 million TEUs.

Historically, the ports of Seattle and Tacoma, separated by about 40 miles, have tussled for shipping and trucking opportunities.  But the two ports were losing marketshare and recognized that something needed to be done to turn their fortunes around.

In 2015, the two ports opted to cooperate rather than compete and formed the Northwest Seaport Alliance (NWSA). Its goal was to establish infrastructure improvements that establish one main Pacific Northwest shipping option to lure business.

Today, the alliance is thriving and gaining business, positioning itself as one of the major trading posts on the West Coast.

Hyundai Brave berthed at Washington United Terminals

Hyundai Brave berthed at Washington United Terminals.

Forming an Alliance, Casting Aside Competition

Bruce Kendall

Bruce Kendall, the CEO of the Economic Development Board for Tacoma-Pierce, said the alliance was responding to the reality of how most businesses viewed the area.

“The world sees the Puget Sound as a system and not individual ports.  You ship to the state of Washington, the Puget Sound, not specifically to Tacoma or Seattle, because that’s the modern world view of these two larger seaports,” he said.

Both ports are governed by five commissioners each, and elected officials had to cast aside the previous history of head-to-head competition, and learn to become in sync.

“The leadership decided to combine the container operations under this new entity, called the Northwest Seaport Alliance, to be responsive to the way the markets perceived us,” Kendall noted.

NWSA spokeswoman Tara Mattina said the ports of Seattle and Tacoma competed against each other for decades.  “That meant investing in infrastructure to trade marine cargo customers back and forth,” she said. “Under the unified management structure of the alliance, we can leverage our investments to compete as a gateway.”

Both ports, in fact, had something to gain from this alliance, pointed out Anne Tauffen, an associate professor of Urban Studies at the University of Washington Tacoma.

Anne Tauffen

“With widening of the Panama Canal, advent of deep hulls and larger ships and more competition from East Coast ports, there was a recognition that some trade that was once going to the Pacific Northwest now has other options,” she said.  By combining capacity, “they remain on the stage as one of the major actors in North America.”

And yet banding together is only a start, Tauffen suggested.  What both cities need to do now is address future issues, which the federal government has largely ignored, such as investing in “biofuel and clean technology in long haul shipping” to be competitive in the next decade, she said.

“Under the unified management structure of the alliance, we can leverage our investments to compete as a gateway,” Tara Mattina, spokeswoman for the Northwest Seaport Alliance.

Alliance turns around a dip in business

What drove establishing the alliance was the downturn in business at both ports.

Kendall revealed that they were losing market share on the West Coast to the combined ports of Los Angeles and Long Beach, the largest port complex in North America.

Tacoma and Seattle “had to be competitive with Long Beach and Los Angeles for this discretionary traffic,” he said.

The alliance enables both ports to meet the needs of a “broad portfolio of marine terminals that can handle containers, breakbulk (anything too big to fit into a container) and autos,” spokesperson Mattina pointed out.

For example, one of its first investments strengthened the bulk capability of the South Harbor’s Husky Terminal, a berth which can handle two 18,000 TEU-ships simultaneously.  Four of those cranes arrived in late February and should be operational by summer.

After three years of the NWSA’s operations, Kendall said, “Our market share has started to rebound.  This is due to the ability to offer a one-stop shop that includes both ports, plus landside infrastructure improvement, plus deepwater slips with state of the art cranes.”

Moreover, it doesn’t have to duplicate port improvements in both locations.  Hence it can reduce costs, offering customers a better deal.

“The proof is in the projects.  What we see are investments being made in infrastructure in both Tacoma and Seattle by customers, as opposed to what used to happen in the past, where the ports competed against each other to attract the same customers,” Kendall said.

Cooperation has contributed to developing several infrastructure projects, in both cities.  For example, two projects, State Route 167 in Tacoma and State Route 509 in Seattle, expanded state highways, encouraging business for the trucking industry.

“These state highways expanded egress and ingress from both ports, and the alliance worked with the state to get it done,” Kendall noted.

In addition, the NWSA is reconfiguring Pier 4 in a $141 million project on the General Central Peninsula to align with an adjacent pier to create one contiguous berth, which will be capable of serving two 18,000-TEU container ships.  It encourages vessels with capacity greater than 10,000 TEUs to use the Northwest ports, which was needed to attract larger ships.

Results of the alliance in terms of volume have been positive.

The NWSA reported that total international container volume, including empties, increased 4 percent for 2017 to 2,958,466 TEUS.  But import volume remained flat at 1,513,029 TEUs compared to the 2016 volume.  All told, total container volume grew 1 percent for the year for a total of 3.67 million TEUs.

In fact, Seattle and Tacoma harbors support about 48,000 jobs, and the air cargo operations added 5,200 jobs. Sixty percent of the goods imported though the NWSA are delivered to the rest of the country.

Jonas Swarttouw, US country manager for NewCold, a global logistics company, has been sanguine about the effect of NWSA on business.

Jonas Swarttouw

“It affects our customers like Trident Seafood, which processes fish from Alaska, which comes in via ships to Seattle and Tacoma,” Swarttouw said.  “If the port is run more professionally, it can work more strategically and grow our business.  They plan on making it one of the biggest alliances on the West Coast.”

Tauffen, the urban studies specialist, says the test of the alliance will be whether it can be successful at “job creation, whether it builds the middle class, and helps sustain a local, regional economy.”

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