Wednesday, July 22, 2015

Northwest Seaport Port Alliance Designed to Promote Intermodal Freight Receives Federal Approval

Seattle and Tacoma Given Green Light to Work Together as Country's Third Largest Cargo Gateway
Shipping News Feature

US – The Federal Maritime Commission (FMC) has completed its competitive review and analysis of an alliance between the Ports of Seattle and Tacoma, voting unanimously to allow what will be known as the Northwest Seaport Alliance, to become effective as scheduled on July 23. In merging the two ports’ marine cargo terminal investments, operations, planning and marketing it is hoped to promote the growth of regional intermodal freight. The Commission’s decision is based on a determination that the agreement is not likely at this time, despite a reduction in competition, to produce an unreasonable increase in transportation costs or an unreasonable reduction in transport service levels, under section 6(g) of the Shipping Act.

The Alliance has authorised the two ports to meet, discuss, and reach an agreement on the management, use and operation of their marine cargo business, including joint business planning and marketing to further develop infrastructure and improve productivity. To help achieve its goals, the agreement authorises the establishment of a Port Development Authority (PDA), effective August 1, 2015, to promote and assist economic development of the Alliance’s marine cargo operations. The PDA will focus on unified business retention and recruitment; coordinated enhancement of the value of marine cargo properties; improved intermodal rail service; increased freight capacities; the general promotion of maritime economic development; and other related Port business activity.

The Alliance represents an effort by two ports which have faced challenges in regional business development, and plan to overcome these challenges by jointly coordinating capital investments to enhance facilities in order to attract ever larger vessels. The Alliance’s focus on upgrading its terminal facilities and rail connections is key to furthering its competitive position. FMC Chairman Cordero commented:

"I would like to express my support for the Northwest Seaport Alliance which brings together neighbouring ports to coordinate their import and export functions that provide a foundation for our Nation’s foreign ocean borne trade. This Alliance would become the third-largest trade gateway in North America, behind the Ports of Los Angeles and Long Beach and the Port of New York/New Jersey. The Pacific Northwest is a key region for inbound and outbound United States cargo, moving cargo not only for the regional trade, but also cargo headed to destinations throughout the entire US Midwest, and this Alliance will help the region remain competitive into the future."

While the ports will remain separate organisations that retain ownership of their respective assets, they will form the PDA to manage the container, breakbulk, auto and some bulk terminals in Seattle and Tacoma. The airport; cruise business; marinas, such as Fisherman’s Terminal; grain terminals and industrial real estate, such as the Northwest Innovation Works and Puget Sound Energy facilities and Terminal 91 uplands, will remain outside the alliance.

Photo: Terminal 30, Port of Seattle.