The ports of Seattle and Tacoma said last week that they have filed a discussion agreement with the Federal Maritime Commission that will allow them "to gather and share information to identify potential options for responding to unprecedented industry pressures.
"The leaders of both ports believe that recent developments in the shipping industry threaten the future of the Pacific Northwest trade beyond anything they have seen during the usual boom/bust cycles in the Pacific trade," wrote Tay Yoshitani and John Wolfe, the chief executive officers of the Ports of Seattle and Tacoma, in a letter to the FMC
. They said the letter was meant to provide background and context for the agreement.
Among the developments the ports cited were:
- Increased competition from expanding ports across North America, prompting U.S. Pacific Northwest gateway ports to explore collaboration
- Loses by shipping lines, which they say are leading consolidation in to alliances "that could lead to fewer port calls, unless ports can craft cooperative responses, where appropriate to meet the needs of shipping lines"
- Deployment of larger container ships, which could lead to fewer port calls, while at the same time signalling an opportunity for ports that have the capability to handle the vessels because they have "deeper drafts, stronger aprons, and berths and adequate cranes"
"Although the two ports traditionally have competed with each other, we understand that the true competition or cargo in the Puget Sound is happening well beyond our individual borders," they wrote. "While the ports of Tacoma and Seattle have many advantages, such as naturally deep water, and strong highway and rail connections to the second-largest concentration of warehouses and distribution centers on the West Coast, we must leverage our strengths in the face of continued soft demand and increasing competition."
The port officials said the agreement will allow them, with appropriate legal
oversight, to meet and share information "on all matters concerning container facility planning and development, management, and operational costs, and rates of return and utilization of port-owned container terminals."
They said they have a desire to explore ways to maintain the Pacific Northwest as a fully competitive gateway, but the ports said their commissions agree that a change in
governance, such as a merger, will not be part of this discussion, and no
subsequent outcomes are presupposed.
“The ports and their discussions are aimed at increasing our collective market share and generating more container cargo moving through Puget Sound, the nation’s third-largest container gateway. We value our responsibility to serve the citizens of Pierce and King counties — and the manufacturers and agricultural exporters throughout the state — to continue to support thousands of jobs and generate significant tax revenues to state and local governments.
“Both ports are committed to financially viable business models that support customer success, benefit the citizens of both counties, and ensure the ability of the ports to reinvest in terminal assets and infrastructure.”
Last month, James Newsome, the president and chief executive officer of the South
Carolina State Ports Authority, predicted ports may respond to planned
P3 Network of Maersk, MSC and CMA CGM by filing agreements with the
FMC to work more closely together. He said he was hopeful the P3
agreement would be approved in some form or fashion, but said ports that
are in close proximity may file cooperation agreements with the FMC to
create "a reasonable countervailing power."