FMC Says Recent Moves Make Pacific Northwest Ports More Competitive
Several “significant developments” over the past year should make U.S. ports more competitive with their North American counterparts and help stem the trend of U.S. inland cargo coming in through Canadian and Mexican ports, said the Federal Maritime Commission in a report issued on July 21. According to the update to the commission’s 2012 “Study of U.S. Inland Containerized Cargo Moving through Canadian and Mexican Seaports,” the drop in market share for U.S. ports has begun to stabilize after losing business to Canadian ports, especially Prince Rupert, over recent years. That trend should be reinforced by several recent events, including an information sharing agreement between the Ports of Seattle and Tacoma and enactment of the Water Resources Reform and Development Act of 2014, said FMC.
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Competition from Canadian ports especially hurts ports in the Pacific Northwest, which depend on cargo moving inland because the area lacks the population to generate traffic on its own, said FMC. Ports in the Pacific Northwest have had trouble competing with the Canadian ports because of the extra costs imposed on shippers to the U.S. by the Harbor Maintenance Tax (HMT), said the FMC. In 2009, Seattle, Tacoma and Portland held a 12 percent market share of the inbound container cargo destined for the U.S. Midwest, while Canadian ports had a 12.5 percent share and California ports had a 75.4 share. By April 2014, Seattle and Portland’s share had decreased to 10.9 percent, while cargo transiting through Canadian ports climbed to 14.1 percent and California ports remained relatively steady at 75 percent, said FMC. Although market share for the Pacific Northwest appears to have slid in the beginning of 2014, it now looks to have stabilized, said FMC.
In an effort to improve the competitiveness of ports in the Pacific Northwest, the FMC on March 5, 2014 approved an information sharing agreement between the Ports of Seattle and Tacoma to “discuss, collect and share information on all matters concerning the operation of container terminal facilities at the Ports.” The agreement will allow the ports to rationalize the movement of shipping lines between the ports “within a larger unified strategy to increase our overall container market share in the Puget Sound gateway, to leverage infrastructure investments and to produce statewide economic benefits,” according to a statement in the FMC report from Port of Seattle official Stephanie Bowman.
Another big development in the past year is the passage and signing of the Water Resources Reform and Development Act of 2014, which will also prove a boon to ports in the Pacific Northwest, said the FMC. Previously, the Ports of Seattle and Tacoma were “donor ports” that received funding equal to less than 25 percent of the Harbor Maintenance Tax (HMT) collected at the ports. Because of the new law, all donor ports, including Seattle and Tacoma, will be able to use HMT funds for expanded uses, including berths and the dredging of contaminated sediments, environmental remediation, or payments to importers or shippers transporting cargo through that port.