Two ports that for decades competed fiercely for Puget Sound shipping business toasted a friendly new alliance Friday that will join terminal operations and marketing activities under a single management.
Those Champagne toasts came after the governing commissions of the ports of Tacoma and Seattle voted unanimously to seek the blessing of the Federal Maritime Commission for the newly named Northwest Seaport Alliance that will link the two ports’ shipping terminals to form the nation’s third-largest container port.
“What a lot of folks had said would never happen now is happening,” Port of Seattle Commissioner Bill Bryant said at a joint Tacoma-Seattle port commission meeting at Auburn City Hall on Friday morning.
The two rivals agreed to join their operations to counter the threat of rival ports in Canada, Mexico, the East Coast and Southern California pose to their business. Puget Sound ports have been losing market share in the container shipping business for years. The expansion of the Panama Canal and a tax break enjoyed by Canadian ports has been putting increasing pressure of Puget Sound ports.
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The unanimous approval came only after Port of Tacoma Commissioner Don Meyer unsuccessfully proposed an amendment to the deal. Meyer’s amendment would have required a formal review of the alliance, its goals and achievements before the alliance’s sixth year. The review would have been undertaken by a committee of commissioners from both ports and maritime business and community members appointed by both ports. That nine-member committee would have issued a report but would have had no power to force changes in the alliance’s operations.
Meyer has been the one commissioner of the 10 who has publicly expressed reservations about the alliance structure. Meyer had lobbied for a simpler structure that avoided the arbitrary contribution of equal assets for alliance management.
The Tacoma commission voted 4-1 against Meyer’s motion. Meyer voted for the alliance moving forward even without his amendment.
If the Federal Maritime Commission approves the alliance agreement — and there is little indication it won’t — the two ports will begin the phased implementation of the alliance plan later this summer.
The two commissions’ separate votes set in motion a formal process seeking federal approval of the operating combine. If the commission encounters no issues, that body could approve the alliance by early August.
Reaching agreement on the details of the alliance consumed more than 18 months of meetings and negotiations between the two port commissions. Many of those meetings were held in private under the auspices of the Maritime Commission.
What emerged was a plan just short of a full merger between the two ports. Each port will allow the alliance to market and operate container and other shipping terminals in each port. Those terminals would remain in each ports’ ownership, but the alliance would handle the day-to-day leasing, operating and marketing of those facilities.
Each port would retain solo operations of other of their assets. The Port of Seattle, for instance, would continue to operate Sea-Tac Airport, its cruise ship terminals, its marinas and fishing boat facilities. The Port of Tacoma would exclude multiple assets from the alliance, including its major Tideflats and Frederickson industrial sites
“Now the real work begins,” Port of Seattle Commissioner John Creighton said.
One of the first actions will be the appointment of John Wolfe, the port of Tacoma’s chief executive officer, as CEO of the alliance. Under the alliance plan, the alliance will employ a yet-undetermined number of marketing and operations officials drawn from each port. Other port employees will be tasked to the alliance for specific jobs.
Wolfe will remain head of the Port of Tacoma for five years even as he assumes the leadership at the alliance.
The finances of the alliance will be separated from the two ports’ beginning in January.