Sunday, March 23, 2008
The recent announcement by NYK line to relocate from the Port of Seattle to the Port of Tacoma , gave some new legs to the issue. The contention of consolidation advocates is that competitive ports waste taxpayer dollars and just results in a shuffle of the center of economic activity 30 miles.
For a state dependent upon international trade, that is a rather parochial view of international logistics based on the assumption that the only two ports serving the Pacific Northwest or points east are Seattle and Tacoma. Not so. Obvious competitors are the Port of Portland and the Port of Vancouver.
The hot commodity and the center of competitive activities demanding public finance (if not taxpayer dollars, dollars of public enterprises - ports “owned” by citizens) have been containers. And, the measure of what the taxpaying public’s success is is not investment but rather returns on the public investment. Given the database’s ability to support an extensive comparison between all the major ports in the Pacific Northwest, the easiest comparison for return would be size and growth of container volume measured in 20-foot equivalent units (TEUs).
However, without a doubt, the Port that as suffered through competition is Portland’s. Its “rightful” growth has arguably gone to upstart Tacoma. But, overall container growth has gone to the other Pacific Northwest ports rather than the established Port of Portland.
True enough the Port of Seattle has been forced to compete, but not with Tacoma alone. Container lines that have moved south were taking advantage of infrastructure. If the Port of Seattle had not invested, neither it nor the Port of Tacoma would have grown. Long time maritime watchers can remember when the Port of Seattle’s vision for the Port of Tacoma was as a coal and log export center. (There’s a whole thesis worth on image and vision there.) Our premise is that any complacency by the Port of Seattle would have resulted in the Port of Portland’s growth just as competition has resulted in its stagnation.
Readers are encouraged to delve further back in the history of container growth and to look for other benchmark activities like investment or the timing of new line calls and submit their arguments pro or con. And don't forget to note the tremendous growth at the Port of Vancouver during this time.
And now comes Prince Rupert - competition changes faces.
Thursday, March 20, 2008
A consultant study, mandated by SSB 5207 (2007), is evaluating existing fees paid by the freight industry and seeks to identify other income sources to finance freight congestion relief investments. This includes an evaluation of other states and countries' programs and their impact on competitiveness. Originally findings were to be completed prior to the 2008 Session; however the Committee has extended the study to coordinate with highway and rail freight project work being done by the Department of Transportation and will present its findings to the 2009 Session.
A piece of this research includes an analysis of the diversion of container traffic that would occur as a result of fees or charges that are imposed on containers moving through the ports of Tacoma and Seattle. Conducted by Dr. Robert Leachman, and independently reviewed by BST Associates of Kenmore, WA, the study verifies what industry insiders have long argued: a state-imposed container tax would result in the diversion of both cargo and jobs from the Pacific Northwest.
The study found that a charge of $30 per Twenty-foot Equivalent Unit (TEU) would drive away over 30% of cargo passing through the state. According to Dr. Leachman, “Even a small container fee at Puget Sound may drive significant amounts of traffic away from the Puget Sound ports.” BST Associates went on to note that “The report focuses on imports from Asia. However…there could be an equal or greater loss to other international traffic (specifically, exports and empty containers).”
It is important to remember that diverted cargo means diverted jobs. According to an economic impact study completed in 2005 (based on 2004 data), Port activities generate 43,100 jobs in Pierce County that pay 41 percent more than the county average. Statewide, 113,000 jobs are related to Port of Tacoma activities, an increase of 11 percent from 2000. The Port’s cargo-handling, construction and leasing activities generate $91 million in state and local taxes.
Wednesday, March 19, 2008
Cargo ships generally use highly-polluting bunker fuel. The Ports propose to pay the difference between the price of bunker fuel and the selected low-sulfur distillate fuel.
Even though the Washington State Department of Ecology has recommended to the U.S. Environmental Protection Agency that the port-industrial area be included in a proposed designation for a Wapato Hills-Puyallup River Valley non-attainment area, the marine related contribution is thought to be only about 10% of the PM2.5 contamination as measured by the Alexander Avenue sampling station. And, that's of an area that continued monitoring through 2007 is demonstrated to be below the new, lower allowable limit as set by EPA.
Tuesday, March 18, 2008
This program, to be financed by a $35/TEU (20-foot equivalent unit) container fee, seeks to transform the drayage industry rather than fix transportation infrastructure as a similar proposal before Washington's 2007 legislature. The LA CTP addresses public safety (by upgrading the trucking fleet), public health (by requiring clean emission vehicles) and workforce equity (by requiring employee drivers).
These issues were recently surfaced in our community by speakers at the National Defense Transportation Association and the Transportation Club of Tacoma, covered in this blog.
The recommendation from the Washington State Department of Ecology to include the port-industrial area in the non-attainment area for PM2.5 opens the regulatory door for similar actions here.
Monday, March 10, 2008
Basically, Tolan listed a dozen strategically important future issues. Listed in no particular order and condensed around similar topics:
- Railroad stock is transitioning to 60 feet lengths from the former standard of 50 feet. Companies should be asking how they will manage this change as it will impact their bay access points, with car lengths overlapping the physical location of openings, etc.
- The looming debate of re-regulation, especially as it applies to railroads. At first, railroads were totally unregulated, then totally regulated, now unregulated again. The question that looms is will the pendulum swing back to regulation and if so how far.
- The aging workforce presents its challenges more as to the retention of a skills base, both in technical and professional knowledge base so as to provide good customer support, effective workforce actions and sufficiency to match demand. The workforce shortage is most acute in the truck driver job. There are a host of factors affecting the ability to pay and retain drivers. Included are: immigration issues, professional criteria and work environment.
- Steamship lines also have challenges ahead. The weakening of the US dollar has spurred exports, which has lead to a shortage of containers, once only 20% filled on return voyages but now approaching parity. The growth of international trade has also lead to the adequacy of ship capacity to carry containers. As an overall result, lower value products are being priced out of the export market.
- The planned improvements to the Panama Canal, which was said is using Chinese financing, will give Chinese shippers the opportunity to miss both U.S. West Coast ports, roads and railroads.
- Citing a string of just Washington State bridges, the point was made that our infrastructure is facing both capacity and adequacy challenges. In the relatively short term, all should expect pre-tolling and its additional cost pressures.
- Vehicle and equipment costs, especially for the small business owner/operator is getting out of an affordable range. And fuel costs was an "oh, yeah..."
- Shippers and receivers need to form a partnership with carriers to do an overall better job. The issues of workforce and benefits must be addressed in the expected driver shortage. Other issues favor cooperative problem solving.
Contact Gary Gieser if you wish to know more about the Transportation Club of Tacoma.
Tuesday, March 04, 2008
WSDOT's Freight Systems Division is currently working to develop truck parking in Washington-especially along the I-5, I-90, I-82, and SR-167 corridors.
This on-line survey is designed to gather input from:
- both drivers and carriers;
- those who use truck parking facilities regularly and
- those who are periodic users;
- those who utilize facilities for their rest periods and
- those who only stop to use the facilities or grab a quick bite to eat
WSDOT needs your recommendations on how to improve truck parking:
- along I-5, I-90, and I-82
- your truck parking and services requirements
- your current truck parking practices and
- where truck parking improvements are needed.
The survey will take between 10 and 15 minutes to complete.
Please complete the survey by March 23, 2008.
If you are a truck driver please click this link (or paste it into your browser): http://www.watruckparkingsurvey.com/
If you represent a truck company with more than one driver please click this link (or paste it into your browser): http://www.watruckcompanyparkingsurvey.com/
Your views are very important to WSDOT's next steps to guide the development of proposed improvements to present to the Washington State Legislature. Thank you for your time!
For more information, please contact:
Dale A Tabat, WSDOT Truck Freight Programs and Policy Manager.
The House approved a transportation budget with $2 billion of the $4.38 billion cost of replacing the State Route 520 bridge with a more modern, six-lane successor. Users of the bridge could pay tolls as early as 2009 to cover the remainder of the project’s funding. Under that budget, however, other highway projects face delays, including the highway crossing Fort Lewis between Frederickson and Lakewood, the extension of Highway 167 from the Port of Tacoma to Puyallup, and a Highway 509 link from Interstate 5 to Sea-Tac International Airport.
Relevant links: HB 2878, sponsored by Rep. Judy Clibborn, D-Mercer Island. Contact AWB’s Amber Carter at (360) 943-1600.