By William DiBenedetto, CBN Feature Editor
The port of Tacoma and Seattle made it official last August and have worked hard to make the Northwest Seaport Alliance (NWSA) a working operation. Now comes the hard part.
It’s probably too early to call this self-described "marriage" a success, but officials are saying all the right words. For two ports that often spent the better part of a century in relentless competition, they are now "working relentlessly to establish a strategic plan for unifying management of the marine cargo facilities in our North and South harbors and attracting more cargo through our gateway," says John Wolfe, CEO of the alliance. This is the first partnership of its kind in North America, so add historic to the mix.
"We’re functioning as one," says Bari Bookout, the alliance’s director of commercial strategy and the non-container business. "We’re talking about the gateway, not about individual ports. It helps to not be competing with each other. We’re bigger and better as one, rather than two."
The idea is to market the North (Seattle) and South (Tacoma) harbors as a gateway and as a value proposition, she says.
Tong Zhu, formerly the chief commercial officer at the Port of Tacoma, now manages the container operations and business development of the NWSA. "Years and years ago, when I sat at the negotiating table, some male customers wouldn’t even look at my eyes," Zhu said. "But I see changes."
Yes, the alliance has the "mega-ship" bug. But a major strategic finding from a May 2015 report was that the two ports have "inadequate capability" to handle ultra-large container vessels. "Too many small terminals do not fit the strategic requirements for handling big ships," the strategic plan found.
So a first order of business for the alliance is to make the region big-ship ready, and that means focusing on the massive and highly expensive Terminal 5 upgrade in the North Harbor.
After receiving input from potential partners interested in a T-5 upgrade, NWSA determined that additional environmental review is required under the State Environmental Policy Act. T-5 could only handle ships with a capacity of 6,000 TEUs when container operations were suspended there in July 2014 to allow for the tactical investments necessary to handle two 18,000-TEU ships simultaneously. Containerships of 15,000 TEUs and above have yet to call at Seattle or Tacoma on a regular basis.
"Upgrading Terminal 5 to handle larger vessels is critical to creating new maritime and industrial jobs for the region," said Stephanie Bowman, co-president of the Port of Seattle.
The planned terminal improvements will accommodate heavier cranes and provide deeper drafts to handle the larger ships cascading into the trans-Pacific trade. Design and permitting for the project began last year.
"We are investing in our terminals and road and rail infrastructure to handle more cargo and the super post-Panamax ships moving into the trans-Pacific trade," Wolfe said.
It’s been estimated the alliance and the two ports will have to spend from $800 million to $1 billion in the near future to prepare and equip the two ports to handle the new generation of super-sized container vessels.
Strategic investments, in addition to the plan for T-5, include redevelopment of T-4, rehabilitation of the T-46 dock, the purchase of two Super Post Panama container cranes, and redevelopment of the APM terminal "for diverse business."
According to NWSA’s initial budget for 2016, it has earmarked $174.5 million to pay for planned projects over the next five years, with the bulk of that total—$130.9 million—funneled into revamping the container terminals.
That seems like a good start, but funding for mega-ship accommodation looks to be a major issue for a port region that handled 3.53 million TEUs last year. That was a modest 4 percent increase from 2014, but the major part of the increase was in international empty boxes – up nearly 35 percent. By 2025, the alliance is projecting volumes of 6 million TEUs.
The Northwest Seaport Alliance is off to a decent start, but "now the real work begins," said Bowman.