Bill Virgin: Seattle port’s financial follies may be amusing, but bigger issues loom

You may have been distracted by other recent news items and events — the snow, the Super Bowl, the new administration in the other Washington — but if you haven’t been following the saga of the Port of Seattle and its now former chief executive, you’ve been missing out on some bowl-of-popcorn-worthy entertainment.

To recap: The port announced the resignation of Ted Fick, who had been appointed to the job a little more than two years ago. The port gave no reason for the departure, and did not happen to mention a state auditor’s report that inconveniently surfaced at the same time. That report was critical of the port’s payout of $4.7 million to 642 nonunion employees.

“The method in which the port executed this one-time payment constitutes extra compensation not allowed by the state constitution,” the auditor’s report said.

When the report became public, the port responded by heaping blame on Fick not just for the payouts (Fick was one of those receiving them) but for other alleged offenses. “The port commission had raised multiple personnel issues with Mr. Fick during his performance review,” said a statement from Tom Albro, president of the port commission.

Fick wasn’t taking that quietly, and he fired back at the port commission’s statements. Meanwhile, the port has been issuing its own rebuttal to the auditor’s report, along the lines of “gee, those payments weren’t so bad because we had a good reason for them, but (big sigh) we’ll pass some resolutions ‘to ensure greater overall transparency between the executive office and the commission going forward’ and call it good.”

The entertaining aspect of this spat is that it’s playing out so publicly. Usually, and particularly true in the corporate world, a CEO who is sideways with the board departs in a verbal fog of “pursue other opportunities” and a thanks for contributions to the organization; all of it the empty language of nondisparagement clauses and some lovely parting gifts to encourage the ex-exec to keep his or her mouth shut.

But readers will recognize the less amusing aspects of this episode. If you live in King County, you’re paying for it. If you live in Pierce County, you’re tangentially touched by it through the Port of Tacoma’s affiliation with the Port of Seattle through the Northwest Seaport Alliance. Congratulations, Thurston County, you appear to be off the hook on this one.

The alliance was sold to the populace as a way to reduce competition between Tacoma and Seattle’s ports in rate cutting, customer stealing and facilities duplication. The advantages to Seattle were clear — let Tacoma take on the headaches and responsibilities for most maritime operations while Seattle focused on its larger airport operations. The benefits to Tacoma and Pierce County were less obvious, at least compared with the alternative of letting the competition play out and may the best-positioned port win.

The alliance’s debut came amid an international trade and shipping scene roiled by the opening of expanded Panama and Suez canals, growth at Canada’s ports, bankruptcy and consolidation of some shipping lines, China’s economic gyrations and the lingering effects of the West Coast port slowdown.

That’s just for starters.

Those factors haven’t gone away, and more are being added:

▪ You say the organizations representing shippers/terminal operators and labor are talking to avoid a repeat of the slowdown debacle? That’s good, if they keep talking. You say the container-shipping business shows signs of stabilizing? That’s definitely good.

▪ The Trump administration wants to spend more on infrastructure such as waterways, ports and the rail lines and highways that serve them. That’s probably good too, and the one administration initiative likely to get bipartisan support.

▪ That same administration is making noises about redoing trade deals and clamping down on countries such as China. That could be bad for trade volumes.

▪ Energy exports could grow. That’s good news for Canada, since it’s unlikely that anything resembling an export terminal is likely to get built on the U.S. West Coast.

▪ Amazon is now dabbling in ocean-freight-forwarding. That’s well worth watching, especially if the company gets as actively involved in that transport mode as it has in air freight.

With all those issues on the plate, is it better or worse to have the Port of Seattle distracted by internal issues such as audits and CEOs, local battles such as the Sodo arena (which has implications for Tacoma) or the airport (construction, congestion, competition with Paine Field)?

Both ports face big investment decisions, especially with Terminal 5 in Seattle. However the two port commissions resolve these issues, or don’t, may be less entertaining than the slapstick show Seattle is now engaged in, but a lot more is at stake than that bowl of popcorn.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

This story was originally published February 10, 2017 at 6:18 PM with the headline "Bill Virgin: Seattle port’s financial follies may be amusing, but bigger issues loom."