THE ports of Seattle and Tacoma face an uphill battle to improve their intermodal access to the hinterland to protect the discretionary cargo they have, and, perhaps, even regain business lost to southern California and Canadian ports.
Shippers have already diverted goods away from Puget Sound to Vancouver and Prince Rupert in Canada, because of cheaper and often more reliable intermodal services to Chicago.
The pull of the Los Angeles-Long Beach port complex and better availability of empty containers it provides Midwest exporters has also cost the Pacific Northwest, reports Newark's Journal of Commerce.
Seattle and Tacoma had a 10.7 per cent combined market share of North American west coast container volume in the first three quarters of this year, compared with 11.4 per cent in the same period in 2013.
"If we hope to grow, it has to come from intermodal," said managing director of the seaport division at the port of Seattle, Linda Styrk.
"We are a secondary port and unless our population base morphs, we are going to have to work at least twice as hard to grow our volume," she said.
Until now, Seattle and Tacoma could do little but encourage terminal operators to hand off imports to the railways speedily and hope that Union Pacific (UP) and Burlington Northern Santa Fe (BNSF) railways provide better and more competitive service.
A planned alliance between Seattle and Tacoma could change that by giving the two ports a larger voice that could grab the attention of BNSF and UP.
Under the Seaport Alliance, which is pending US regulatory approval, Seattle and Tacoma will plan, market and manage their marine cargo terminals and related function under a single body.
The duo still won't have commercial leverage with container lines and railways because they'll be out of the contracting process.
But their combined market share will make them the third-largest North American container gateway, said Mike Reilly, the port of Tacoma's director of business development.
The alliance "allows the global marketplace to look at us though a different pairs of lens," Mr Reilly said.
Ideally, BNSF and UP would offer better service and more competitive pricing, encouraging container lines to ship more cargo through Seattle and Tacoma.
Railways, hypothetically, would moderate price increases in exchange for guarantees that the carriers would ship more volume through the gateway.
Canadian Pacific Railway and Canadian National Railway's aggressive development of their networks to grab more of the market stretching from Chicago to Detroit heightens the need for better and cheaper service from Seattle and Tacoma to the Midwest.
BNSF and UP transit times this year have suffered just as much as the CP and CN legs, customers have told the port of Seattle.
Mr Reilly said service from BNSF and UP was improving before both ports were hit by port congestion weeks ago. He is confident service will get back to mid-2013 levels sometime next year.
As part of its US$6 billion capital plan for 2015, BNSF will spend $2.9 billion on maintenance and $1.5 billion on expansion work. Much of those dollars will go towards the railroad's biggest choke point, the Northern Corridor.
BNSF spokesman Amy Casas said in an e-mail: "Once the new capital programme is complete, we expect to further restore the capacity flexibility we have historically enjoyed to manage the periodic demand surges that come from a dynamic economic environment."
UP, which is also expected to unveil a robust capital plan for next year, said it is working to improve intermodal service from Puget Sound by reducing truck turn times at its Seattle intermodal yard, and expanding capacity on its line in the Columbia River Gorge.
WORLD SHIPPING
09 December 2014 - 23:43
Puget Sound unites as Tacoma and Seattle alliance focuses on intermodal
THE ports of Seattle and Tacoma face an uphill battle to improve their intermodal access to the hinterland to protect the discretionary cargo they have, and, perhaps, even regain business lost to southern California and Canadian ports.
WORLD SHIPPING
09 December 2014 - 23:43
Puget Sound unites as Tacoma and Seattle alliance focuses on intermodal
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