Ports of Seattle and Tacoma to form Seaport Alliance

Today the ports of Seattle and Tacoma announced a plan

to unify the management of the two ports’ marine cargo terminals and related functions under a single Seaport Alliance in order to strengthen the Puget Sound gateway and attract more marine cargo for the region.

The Seaport Alliance will manage marine cargo terminal investments and operations, planning and marketing, while the individual port commissions will retain their existing governance structures and ownership of assets.

This unprecedented level of cooperation between the state’s two largest container ports is a strategic response to the competitive pressures that are reshaping the global shipping industry. . . .

“Where we were once rivals, we now intend to be partners,” said Stephanie Bowman, co-President of the Port of Seattle Commission. “Instead of competing against one another, we are combining our strengths to create the strongest maritime gateway in North America. The Seaport Alliance is the result of our shared commitment to maintaining the economic health of our region through a thriving maritime industry.”

This announcement comes on the heels of a new economic impact study of marine cargo activity at both ports, which found that it was associated with $138.1 billion of total economic activity in Washington.

As Bowman mentions, the two ports have been competitors in the past. For example,

When the recession hit, the Port of Tacoma lost nearly 25 percent of its container business. By last year, the Port of Tacoma’s container numbers had rebounded to 1.89 million, but that was still short of the more than 2 million that crossed the docks in 2005.

The Port of Seattle also saw a marked decline. In 2010, the Port of Seattle handled 2.15 million container units. Last year the Seattle port handled 1.59 million.

Part of Seattle’s decline and part of Tacoma’s rebound was the result in part of the two ports competing for a big customer, the Grand Alliance, a consortium of four shipping lines. Tacoma won that competition, and the Grand Alliance two years ago moved to the Port of Tacoma’s Washington United Terminal from Seattle.

But while the two ports compete for each other’s customers, they’ve not been so successful in attracting new business from outside the region. Puget Sound, the nation’s third-largest container shipping gateway after Los Angeles-Long Beach and New York-New Jersey, continues to lose market share.

It will be interesting to see how this new alliance works out. Will it help draw new business to the Puget Sound?