Tacoma risks getting short end of Port alliance with Seattle

For years, competition between the Ports of Tacoma and Seattle created a race to the bottom as shipping lines played the two off each other and created a level of instability that did not benefit anyone. Each Port was underbidding and essentially stealing the other’s work.

When the two joined to create the Northwest Seaport Alliance, the thought was that the two large container ports would best serve their customers, the shipping lines and the region’s trade-dependent economy by working together.

Staff and elected commissioners were eager to prove this first-in-the-nation arrangement could serve as the future of ports and shipping.

But as the Alliance celebrates its third anniversary, our elected Commissioners need to ask serious questions if this arrangement is best for the Port of Tacoma and the taxpayers of Pierce County.

The Port of Tacoma commission is studying how the executive leadership and operations work in conjunction with the Alliance. Currently, Executive Director John Wolfe oversees both the Port and the Alliance, and much of the original Tacoma staff hold dual roles.

Over 80 percent of Port of Tacoma revenue-generating activities are now managed as part of the Alliance, and yet only about 20 percent of the Port of Seattle falls under Alliance jurisdiction.

In commission study sessions, staff have made the argument that with so much of Tacoma’s port wrapped up in the Alliance, it makes sense to have Wolfe oversee both entities.

Last year, staff excitedly displayed how great the Alliance worked for customers. A shipping line was calling at Tacoma, but the refrigerated unit capacity at the terminal was full and creating logistic problems.

Instead of adding more capacity or moving that ship call to another terminal in Tacoma, the line was moved to Seattle.

Staff patted themselves on the back for demonstrating what the Alliance could be. What was forgotten were the nearly 1,000 union man hours of working that vessel every week here in Pierce County.

Yes, longshoremen in Seattle were doing the identical work and it was a wash for the greater region. But that’s the yearly equivalent of 25 jobs shipped to Seattle.

And Port jobs are far more important to Pierce County, which does not have the Microsofts, Amazons and tech jobs driving Seattle’s robust economy.

The concept of the Alliance works as long as Tacoma’s natural advantages are not marginalized. We have better access to rail and freeways. We have more room to grow than Seattle does, as as our industrial port has more buffer.

Furthermore, we have a healthy workload of automobiles, logs and breakbulk that Seattle does not.

What Seattle offers is a better view of the Olympics and better restaurants to attract clients – and most importantly a larger tax base that could dwarf Pierce County with its bonding capacity.

But add in Pierce County’s political culture of understanding the importance of the Port, and the long-term advantage sways our way, as long as the Port smartly allocates its resources and plans for shifting market demands.

The question is whether Port Commissioners and staff will do what is best for the Port of Tacoma or the Alliance, when both masters cannot be served.

As the Commission grapples with how to lead both entities, it may be best to do the following:

▪  Remove non-container elements of the Port out of the Alliance. Why should Seattle commissioners have a say in an area of the industry they have no work or experience in?

This would allow Tacoma staff to specialize, target and market a vital job-producing element of our port. The people of Pierce County would be better served if terminals that specialize in cars, breakbulk and logs were not included in the Alliance.

▪  Have a separate CEO for our Port. While it would be nice to save money, Tacoma needs a separate executive to specialize in Tacoma-centric items and target non-container elements of our port.

Right now we have an executive director, and staff that work under him, that must answer to ten bosses, five of whom have no allegiance to Pierce County.

▪  Only invest in properties when the Alliance has a customer.

For years, the Port of Tacoma would not make infrastructure upgrades without a customer, but now the Alliance is considering a $400 million facelift to Terminal 5 in Seattle to even up with the $280 million upgrade at Pier 4 here in Tacoma. The difference was that a long-term tenant had already signed at Pier 4.

When the Alliance was created, the joint commission gave itself five years to work out the kinks, and there is still time to make this work.

But the control of Pierce County voters is currently being lost to elected commissioners from King County and a staff obligated to a megaport and not our port.

For the long-term economic health of Pierce County, the Port of Tacoma commission must find a way to not compete with the Port of Seattle while also not giving up our voice and our natural advantages.