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Economic and dam related articles

Port of Seattle Cargo Going
Back to Southern California

by Kristen Millares Bolt, Staff Writer
Seattle Post-Intelligencer, October 16, 2006

Volume slips after 2 years of growth

The amount of goods flowing through Seattle's seaport is faltering this year after two years of heady gains.

Container traffic at the Port of Seattle has fallen nearly 5 percent so far this year compared with 2005, which was the second consecutive year that Seattle had the fastest-growing container port in the United States.

That year-over-year decline steepened to more than 7 percent in September, a key month for the movement of holiday goods.

The reason for the drop is primarily the ports of Los Angeles and Long Beach, Calif., which have resolved congestion issues that in 2004 sent many shippers' goods north to the ports of Seattle and Tacoma.

"A lot of traffic that came up here because of L.A.'s congestion will stay, though some attrition is to be expected," Port of Seattle Commissioner John Creighton said.

But "there is a huge market right there at the foot of the L.A./Long Beach harbor," which will continue to act as a sponge for goods.

Not only do bigger ships go to Los Angeles/Long Beach, they also go more frequently. There are some indications, though, that the Port of Seattle may have diversified its business lines enough to help weather the volatility of the container cargo market.

"The manpower was made up with the increase of the cruise ship season, which helped during the summer time," said Herald Ugles, president of International Longshore and Warehouse Union Local 19.

"We just took in 75 new people last week."

Tacoma should still beat last year's numbers, but it would be a stretch for Seattle to do the same. Last year, it barely edged out Tacoma for the Puget Sound area's No. 1 container port with 2.09 million TEUs, which are a standard measure of container volume, meaning 20-foot equivalent units.

This year, though, Tacoma is sure to eclipse Seattle and likely will stay ahead of it over the long term -- despite the arrival of Mediterranean Shipping Co. S.A., the second-largest container ship operator in the world, to the Port of Seattle's Terminal 18 next year. Mediterranean is expected to bring 221,000 TEUs through Seattle in its first year of call.

But last December, a major shipping client -- the New World Alliance, composed of APL, MOL and Hyundai -- pulled one of its four routes through Seattle. And K-Line and Yang-Ming, which opened terminals in Tacoma, aren't routing as many of their goods through Seattle anymore.

"Container traffic does fluctuate, which is why I am bullish on the maritime industry in Seattle, but I think we have to think hard about how much we invest in infrastructure to get us beyond 3 million TEUs, which is relatively painless," said Port Commissioner John Creighton, reflecting on the June meeting when port staff laid out which construction projects would be needed to reach certain growth benchmarks. "To get to 5 million TEUs requires infrastructure investments from here to Chicago."

In a report released in June, the port said it thought it could handle 4 million TEUs a year by 2013, but said that volume was the rational upper limit for future traffic. The Port of Tacoma, meanwhile, thinks it can handle nearly 6 million TEUs by 2025.

One bright spot in this year's numbers is Terminal 86, which so far this year has transported 24 percent more metric tons of grain such as corn, wheat and soybeans than last year -- 4.4 million metric tons. In September, birds swirled above as nearly 561,000 metric tons of grain was pumped through the terminal.

The Port of Seattle's sense of urgency has not been dimmed by its lagging performance so far this year. It has been hastening its container terminal expansion through public review and permitting.

The port plans to spend $120 million to shift the cruise lines away from Terminal 30 and reconvert it to a cargo container terminal. It wants to be permitted and begin construction by summertime next year.

"We're hoping to grow by continuing to increase efficiencies, and the desires of shippers to diversify their ports of entry," Creighton said.

One Northern port has done just that -- the Port of Vancouver. Its president and chief executive, Gordon Houston, said he expects the port to bring in more than 2 million TEUs this year, an increase over last year despite Los Angeles/Long Beach's magnetic force.

"We've become more efficient because both of our railroads have done significant work on co-production," Houston said. "Traditionally, railroads run on their own tracks, which limits their ability to take advantage of space on the other guy's tracks, but now they are sharing."


PORT TRAFFIC The amount of goods flowing through Seattle's seaport is dropping. Officials blame increased traffic heading to the ports of Los Angeles and Long Beach, Calif.

January through September:
2005: 1,560,211 TEUs
2006: 1,486,879 TEUs

Month of September:
2005: 187,682 TEUs
2006: 173,477 TEUs
A TEU is a standard measure of container volume meaning 20-foot equivalent units.

Related Pages:
1997 Container Shipping Report by Port of Lewiston
2002 Container Shipping Report by Port of Portland


Kristen Millares Bolt
Port of Seattle Cargo Going Back to Southern California
Seattle Post-Intelligencer, October 16, 2006

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