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Bill Virgin: Parody may not be far from reality behind the ports’ closed doors

The ports of Tacoma and Seattle have been holding closed-door meetings to discuss strategies to counter long-term competitive threats to their operations.

The commissioners did emerge long enough this week to disclose what everyone already knows – that there have been meetings, and that the ports have some big challenges. Other than one commissioner proclaiming that the meetings are not a prelude to a merger, little of actual value or interest – such as what if anything the ports intend to actually do – was disclosed.

The legality of those closed meetings is being challenged – the ports had to get a federal waiver to hold the joint sessions – but in the meantime we imagine what a secret briefing memo might say:

To: Commission members and staffers, Ports of Tacoma and Seattle

Re: Why we’re in deep … water, and if and how we can get out of it

Background: As even the most casual observer knows, the maritime operations of the two ports are facing existential threats (that’s a $5 phrase meaning that at the rate we’re going we might not have enough business to justify being around in a few decades). The Puget Sound container ports may be stealing one another’s lunch, but everyone else is eating our dinner.

On the West Coast alone, we face container-traffic competition from Prince Rupert, Vancouver, Portland, Oakland and Los Angeles/Long Beach. Even the Mexicans are making noises about grabbing a few slices of our dessert. And don’t get us started on listing all the Gulf and East Coast ports that are dredging and expanding to accommodate all the supersized vessels that will fit through the Panama Canal once the widening gets done.

Did we mention that more fists are reaching for fewer plates, that container volumes aren’t growing to justify all this capacity – a trend that reshoring (moving more production work back to the U.S.), while great for the American economy, could make our situation even worse?

Worse still, the locals aren’t all that convinced of our importance to the local economy, at least not when balanced with the taxpayer subsidies we seem to require. When given the option of choosing between the port or a basketball arena that may never be built and also will be publicly subsidized, the voters of Seattle might decide that they’d prefer the arena, or neither one.

Just to move to the next session on a depressing note, we have options – but not very attractive or useful ones.

OPTIONS

Do nothing: Voters may grumble and occasionally make a ritual sacrifice of an incumbent port commissioner. But for the most part they’ll keep voting for us whatever we do. And it’s not like we’ll disappear overnight. Until someone figures out a way to move vast quantities of cargo across vast oceans using vast fleets of drones, the container business won’t disappear. We can keep muddling along, even on less.

Merge: Didn’t one of you just say these talks aren’t a merger? Probably right. Merging port operations won’t solve the competitive-landscape issues, it’ll never fly with politically, and for at least one port that seems to be the long-term winner (if there is such a thing, that would be Tacoma), what in it for them? It’s like the punch line to that old joke: I don’t need to outrun the bear, I just need to outrun you.

Price fix: We’d never use such an ugly term (for an illegal practice), but that’s what so many people seem to be urging. Merge the ports, stop price cutting, problem solved! Problem is, what’s in it for any other port to raise its prices to match? The shipping companies will look at the above-market rates at the new Port of Puget Sound, shrug, and send vessels elsewhere.

Buy out the competition: If you can’t beat ’em, buy ’em. Wonder what Prince Rupert would take for its port?

Go big on oil and coal: Right, like that would ever fly politically around here, even though Metro Port Vancouver seems to be able to do it. We can just watch all those coal trains roll by en route to Canada.

Go big on something else: We already do grain. And cars. Tacoma has an interesting prospect with liquid methanol. Seattle is big in seafood. How about lumber and logs? That used to be a big deal around here. Anyone know if we’ve got any of that left?

Privatize: If the ports really are such great engines of economic activity, why do they need the public’s money? Let the stevedoring companies, the shipping lines, the railroads and the logistics companies own and run them. Not that this will ever fly either – what’s the incentive to own the cow when people only too happy to give you the milk for free?

Get out of the marine business: It’s not as though the Port of Seattle hasn’t, within recent memory, expressed ambivalence about some of its maritime operations. And it, unlike Tacoma, has another line of business, the airport. The Port of Seattle could unload its seaport (maybe Tacoma can run it for a modest fee), sell its waterfront headquarters for a tidy sum and move to cozy offices in SeaTac.

RECOMMENDATION

Given the urgency of the matter and the cost and complexity of options, we recommend a truly and uniquely Northwest approach – keep talking, commission more reports, hire more consultants, hold more meetings but don’t commit to anything, in the hope that the difficulty will either resolve itself or go away, or that people will become so bored with it that they forget it was ever a subject of concern.

The preceeding was parody. But how much of a parody? How out there was it really? Hmm, now there’s an interesting question.

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