Port of Seattle, Port of Tacoma Merger Faces Big Struggles

A consultant’s report says that the Port of Seattle’s maritime container facilities were operating at 38 percent of capacity

With this article coming from Sunday's Seattle News, that two commissioners from the Port of Seattle toured Port of Tacoma facilities on Friday as guests of the Port of Tacoma Commission, the two traditionally rival ports continue efforts to attract new business to both Puget Sound ports and expand on their collaboration that has sparked talks of a merger.

The tour was the fourth meeting between Tacoma Port Commissioners Clare Petrich and Don Meyer and Seattle Port Commissioners Stephanie Bowman and Tom Albro since the two ports agreed to share information about their finances and business strategies.

Tacoma and Seattle ports successfully sought antitrust immunity from the Federal Maritime Commission last month to begin those talks and information sharing as they moved to halt the erosion of their North American market share.

As the trans-Pacific cargo business grew by 2 to 3 percent this year, Puget Sound’s two largest ports lost 4 to 5 percent of their market share to other East and West Coast American and Canadian ports, Port of Tacoma Chief Executive John Wolfe said Friday.

“This is not a sustainable model,” said Wolfe.

The commissioners’ meeting came the same week a consultant’s report obtained by television station KING 5 said that the Port of Seattle’s maritime container facilities were operating at just 38 percent of capacity in 2013.

The report was written by Kirkland-based Mercator International for a terminal operator.

The Port of Tacoma saw its container traffic rise rapidly last year, mostly as a result of a shift by a container shipping consortium, the Grand Alliance, from the Port of Seattle to the Port of Tacoma.

Now the two ports have hired a consultant to study the two ports’ finances and operations and to make recommendations about how they could collectively become more competitive.

The two ports have been rivals for decades, stealing each other’s customers from time to time, but seldom generating larger volumes by attracting new traffic from outside the region.

Wolfe said that the region needs to redouble its efforts to make cargo handling more efficient and timely if it is to grow its market share.

Shipping lines in recent times have been consolidating their unprofitable operations to share cargo and to eliminate duplication of efforts. Those consolidations plus the entry of more efficient larger ships into the trans-Pacific trade has resulted in shipping lines concentrating calls on fewer ports able to handle the larger ships.

New competition from both Vancouver and Prince Rupert, B.C., in Canada has also caused cargo diversions from Puget Sound ports.

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