Puget Sound Report
November 1, 2017
Situated at the doorstep of some of the most significant trade routes, the Puget Sound plays to its strengths.
The Washington region's proximity to Asia and deep ties to the Alaskan economy make Puget Sound a major player in the trans-Pacific trade.
"The Puget Sound is blessed with excellent road and rail links allowing it to act as a major gateway for trade between the Pacific Northwest, Alaska, Asia, the US Midwest and Canada," said Port of Everett spokeswoman Lisa Lefeber. "Vessels travelling the great circle route from Asia will arrive a full day earlier than destinations south of Puget Sound."
Puget Sound has a naturally deep water system free of depth restrictions for passage of vessels from the sea buoy to the piers. It's also free of air draft restrictions to any of the major ports within the system, said Lefeber, whose own port is four hours from the pilot station and has no draft or air draft restrictions for arrival or departure of vessels.
Puget Sound generates a $5 billion annual benefit to the local economy, making it the largest, most diverse commercial maritime economy in the nation.
Considered the homeport of the North Pacific Fishing Fleet, Puget Sound is seeing $14 billion in new construction over the next decade in big boat fleets.
For example, Bellingham boat builder All American Marine is getting a new 57,000-square-foot manufacturing facility that will allow the company to expand its operations and workforce. The $10 million project is part of a deal with the Port of Bellingham, which received funding help from Whatcom County's Economic Development Investment Program.
"We need a larger manufacturing facility and a larger workforce to meet customer requests for bigger vessels," All American Marine president and CEO Matt Mullett said in a port press release in 2016.
Companies are viewing it as a safe investment, with Hawaii and Alaska's reliance on tugboats, a solid need for passenger vessels such as tour boats and ferries and the Alaska market, which rely on goods and services from Puget Sound providers and helps lower cost of living for Alaskans.
"Puget Sound ports mark the gateway to Asian market goods with the United States and play an integral role in our intermodal transportation network," said Jennie Foglia-Jones, communications, marketing and outreach manager at the Port of Olympia. "With the rapid growth of so many significant companies in the Pacific Northwest along with the efficient connectivity between water and either rail or truck transportation, Puget Sound ports are needed more today than ever before."
Ports of Seattle And Tacoma
Two years ago, the ports of Seattle and Tacoma began the Northwest Seaport Alliance, a brave new partnership blessed by the Federal Maritime Commission that would turn once-competing ports into North America's third largest container trade gateway.
The alliance has allowed the ports to leverage their assets, creating the second-largest concentration of warehouses on the west coast with a growing number of distribution centers to give customers more ways to move cargo through Seattle/Tacoma.
The ports also have the naturally-deep harbors of Commencement and Elliott bays for handling mega vessels and short-haul rail service and international and domestic intermodal services, allowing for more than half of imports to be moved by rail to destinations such as Chicago, Memphis, Minnesota and the Ohio Valley.
The new partnership has been invaluable in recent years as ports along the west coast and elsewhere have had to adjust to a rapidly changing industry, from the demise of Hanjin to last spring's launch of new shipping alliances.
"This is where NWSA really paid off for the gateway," said alliance spokesman Nick Demerice. "With more terminals and different locations under single management we were able to adapt in ways that would never had been possible when Seattle and Tacoma were competing against one another."
This year's container volumes for the alliance are expected to finish marginally higher than 2016, with domestic volumes dipping 8 percent from last year due to soft market conditions in Alaska.
The recent changes in vessel deployments by the new ocean carrier alliances have also shifted container volumes at different terminals within Seattle/Tacoma, Demerice said. For example, in the North Harbor in Seattle, the shifts resulted in a 70 percent increase in containers at Terminal 18 on Harbor Island.
"We are aware that the competition among the west coast ports is tighter than ever," Demerice said. "The Northwest Seaport Alliance continues to invest in infrastructure to increase options for handling multiple super-post Panamax vessels at the same time. We also value the partnerships with our stakeholders to streamline the movement of cargo through our gateway."
Those investments include:
In the South Harbor, the Pier 4 reconfiguration project on the General Central Peninsula, which aligns it with an adjacent pier to create one contiguous berth capable of serving two 18,000-TEU container ships. The alliance's Managing Members have authorized the purchase of eight new super post-Panamax container cranes. The new cranes, to be built by Shanghai Zhenhua Heavy Industry Co., Ltd. (ZPMC) in China, will be able to lift up to 165 feet above the pier deck. The first four cranes are expected to be built and delivered in 2018. Four more cranes will arrive in 2019. The remodeled berth will also allow for shore power in the future.
Efforts to improve the North Harbor's capability to handle ultra-large ships. The City of Seattle in early April published the Master Use Permit Analysis and Decision with Draft Conditions for the Terminal 5 Improvements Project. The decision gave conditional permission to deepen berths, retrofit water/stormwater utilities, add electrical capacity and redesign upland cargo facilities for more efficiency.
The $123 million South Lander Street bridge project is expected to break ground early next year. The major freight corridor project will remove at-grade access to the tracks and put in place in a new four-lane bridge that will accommodate 1,400 pedestrians, according to the port of seattle.
The port of seattle is working on a $25 million grade separation project for South 228th Street grade that will ease traffic congestion by railroad crossings. "Grade separations like these are critical to remove traffic bottlenecks, especially areas in the Kent Valley that handle the second largest freight and cargo volumes on the West Coast," said Commissioner Stephanie Bowman.
The alliance recently updated its DrayQ phone app that will help truck drivers better navigate traffic around Seattle and Tacoma. The app was first launched in October 2016.
Port of Everett
With more than $29 billion in exports, the Port of Everett is the largest custom district in Washington State by value, able to handle a diverse cargo mix that includes logs, bulk cement, containers, heavy lifts and project cargoes.
That includes transporting all the oversized cargo for the wide body airplanes for the Boeing Co., such as the 747, 767, 777, 777X, KC-46 military tanker. The port also serves as backup transport for the 787.
And while Everett primarily supports the manufacturing, energy, construction, aerospace, agricultural and forest products industries, the port has been involved in handling wind energy, soybeans, compressors for the oil industry, and heavy equipment projects in recent years.
"We earned the reputation as the premiere breakbulk port in the Pacific Northwest because of our ability to handle high-value overdimensional cargo with no damage," said Lisa Lefeber, director of public affairs for the port.
The Port of Everett specializes in moving overdimensional/heavy cargo from the US to Canada because of its proximity to the border, excellent heavy haul access from the Port to Interstate 5.
Everett anticipates a flat year in 2018, with bulk cement imports remaining steady.
Aerospace is expected to dip a bit and lower oil prices continue to drive reductions in various project cargoes that have historically supported the industry, Lefeber said. She added that the Russian trade embargo "continues to keep cargo volumes to that area of the world below normal levels."
The port, however, sees bright spots in its market share, including more log exports to China and Japan and increased trade to the South Pacific, Lefeber said.
The port continues to look for ways to expand and diversify its portfolio. Some examples of new business cargo handled by the port this year include full wind tower components, bulk soymeal transferred to shipping containers and US military cargo for exports.
"In the ever-changing breakbulk cargo business it is important to able to adjust to changing cargo requirements," Lefeber said. "As markets shift, the Port of Everett is poised and ready to take advantage of opportunities with a wide arrangement of cargo handling equipment and gear and a well suited and experienced labor force."
A big part of Everett's plan to remain competitive involves the creation of its the Seaport Modernization Initiative, a more than $200 million capital improvement program to upgrade and enhance facilities and truck, rail, dock and cargo handling equipment to support heavy and oversized loads.
In May, the port finished the first phase of its expanded heavy haul freight route from the port to Interstate 5, the main north/south road from L.A. to Canada. Design for the project's second phase is in the works and is expected to start in 2020.
The port also began building a new, 2,500 double rail siding this past spring to support additional oversized cargo movement at the port, bringing Everett's on-terminal rail total adjacent to the BNSF Mainline to nearly 12,500 lineal feet, Lefeber said.
In November, the port will seek bids to upgrade its largest terminal to handle overdimensional cargo. This project, when completed in 2019, will strengthen the dock to 1,000 pounds per square foot, enhance electrical capacity and provide cold ironing capability. The project also will feature a crane rail that will support 2 x 100-ton gantry cranes and a 700-foot dock extension to create a 1,400-foot-long berth.
Port of Olympia
Puget Sound's southernmost deepwater port owns and runs an international shipping terminal that handles breakbulk and project cargoes as well as Swantown Marina and Boatworks, a 733-slip recreational marina and boat haulout/repair facility.
"What differentiates the Port of Olympia from other west coast ports is its long tradition and close partnership with labor that leads to deeper trust, more efficiencies, and better outcomes. Our teamwork leads to real cost savings and more efficiencies for our customers," said Jennie Foglia-Jones, communications, marketing and outreach manager at Port of Olympia. "We believe our customers have a great experience in Olympia and confidence that their cargo will be treated well and costs will be fair."
Olympia is a niche port focused on bulk, breakbulk, and project cargo, with its bread-and-butter tenants such as Weyerhaeuser and Pacific Lumber and Shipping.
The port expects to handle an estimated 130 million board feet in logs and 25,000 metric tons of general cargo in 2017, Foglia-Jones said.
Meanwhile, the port continues to focus on diversifying its market share by expanding into gold ore imports, and building on previous cargoes of livestock exports, ceramic proppants and organic grains imports," she said.
"Pairing this initiative with our core log export business helps build a more robust business portfolio," Foglia-Jones said.
In terms of projects, the port plans to build on its on-dock loop rail track and modernize a 76,000 square foot open-beam warehouse located just off the dock through building a space utilization site plan geared to a future modernization project.
Also, after years of no marine fueling options in downtown Olympia, the Swantown Marine Fueling Station is now open at the port.
The new fueling station features emergency shutoff buttons and shutoff valves along the delivery system, a leak detection system that automatically alerts to any abnormalities, and dedicated monitors and security cameras.
Until the new station, downtown Olympia had no marine fueling service option since 1999. In 2008, 800 residents signed a petition asking the port to put in a station at Swantown Marina.
In April, the Port of Olympia announced plans to partner with the City of Olympia and LOTT Clean Water Alliance to develop a Sea Level Response Plan to prepare for rising sea levels and protect downtown Olympia.
The port and LOTT plan to spend $75,000 to the effort, while the city will invest $100,000, according to the port press release.