Pacific Maritime Magazine - Marine Business for the Operations Sector

Regional Report: Puget Sound


November 1, 2018

Everett has made terminal development a priority and expects to stay competitive in in international trade for the next 50 years. Photo courtesy of the Port of Everett.

From apples to autos, Washington is one of the nation's most trade-dependent states, and ports in the Puget Sound are at the center of that cargo movement, creating a $5 billion annual benefit to the regional economy.

There's a lot at stake in the Puget Sound, whose cargoes have been affected by the recent escalation of tariffs and sanctions – a development that has prompted port officials to speak out to Washington, DC lawmakers on the effects of the US tariff policy on the economy and jobs, particularly in Washington state.

"We're actively engaging our partners and customers to promote awareness and communicate potential impacts the tariffs can have to our gateway," said Northwest Seaport Alliance spokesman Nick Demerice.

Port of Everett officials also have been working with the American Association of Port Authorities and the Washington Council on International Trade on the issue and were expected to fly to DC in late September on a trade mission to discuss those impacts.

This new reality has made ports in the Puget Sound even more determined to strengthen its infrastructure, many of them spending millions of dollars on various projects that are expected to come online next year. Here's a sample at what is being built and improved.

Port of Everett

This year, Washington's third busiest seaport is celebrating its centennial birthday by fortifying its waterfront.

Port of Everett Acting CEO Lisa Lefeber, who came to the port almost 15 years ago, remarked at the series of projects that are either in the planning stages or in progress.

"One of the big developments is all of the construction that's going on," she said. "I think this is probably the most construction I had seen in my time at the port at one time. And these projects don't get any less complex or less expensive the longer you wait. So we made it a priority to get these projects under way so that we could stay and keep ourselves in the international trade business for at least the next 50 years."

Its biggest investment is the $36 million South Terminal Modernization project, which officials kicked off with a ground-breaking ceremony in August.

Set for completion in December 2019, the project will be able to support aerospace parts for the new 777X, as well as the next generation of over-dimensional cargo, by strengthening 560 feet of the 700-foot South Terminal dock structure and enhancing the wharf's electrical capabilities.

"I find it fitting that as we celebrate the Port of Everett's centennial year in 2018, we continue to be forward-thinking, preparing the Port's infrastructure to carry us into our next 100 years," Port Commission President Glen Bachman said in August. "Completing critical infrastructure upgrades like this will better position the Port and its facilities to handle the larger vessels and heavier cargoes now calling Everett, including aerospace parts for the new 777X and other opportunities on the horizon."

The dock will be able to handle two 100-foot gauge rail-mounted container cranes and the ability to plug into shore power at berth.

After a brief labor hiccup, the project is under way, Lefeber said.

"This has been a project that we've been working on for years and the fact that it's coming to fruition is extremely exciting," she said.

Meanwhile, the $6.5 million contract for the third phase of the Central Marina Improvements project has been awarded to American Construction Company, Inc., which was expected to start work in October.

The project, to be completed in May, will involve deepening the eastern portion of the Central Marina and building a new Guest Dock 5 and activity float at Fisherman's Harbor, a new K-Dock to serve yacht-class vessels and an L-dock for the commercial fishing fleet with floats from P-Dock, according to the port.

"The elements of this project are critical for implementing the Port's vision of a mixed-use waterfront that creates synergies between the upland properties and the marina," Bachman said in September.

This flurry of construction comes in the midst of tariffs and sanctions affecting goods being handled by Everett.

"We are a consumer port; we are very much in manufacturing, aerospace, forest products agricultural products – any cargo that you have heard that might have tariffs on, is essentially what we specialize in," Lefeber said.

And while tariffs are not good for business, uncertainty is worse, Lefeber said.

"If people are making business and pricing decisions based on an unknown circumstance, it creates more uncertainty and it essentially puts a hold on the logistics and cargo movement chain for the types of cargo that are being threatened by tariffs," she said. "I think the market has pretty much accepted the fact that there is going to be some level of tariffs on these products mentioned. We have seen an uptick in the amount of cargo that is being looked at and coming through the port compared to the early part of the year and in late 2017 when there was a lot of speculation and talk but no definitive action."

Now that the new reality of tariffs has been established in the market, the port is hopeful that 2019 will show an uptick in cargo movement, Lefeber said.

The port is also looking at diversifying its cargo by seeking another long-term contract and is actively marketing a 15-acre Shipyard space that could support military and other shipbuilding and repair activities in the Puget Sound, Lefeber said.

"That's going to be a key focus this year and the latter part of 2019," she said.

The port, which is developing its remaining parcels, also plans to look into acquiring more land next year to support additional maritime uses as well as future logistics and distribution centers to the north of the port, she added.

"As we wrap up our 100th year at the Port of Everett, we are looking forward to continuing to grow maritime jobs in our Harbor and go back to the roots of what made the port so successful in the last 100 years, which is international trade, shipbuilding, forest products, agriculture, aerospace – things that help the economy thrive while doing it with a balanced waterfront concept," Lefeber said.

Ports of Seattle and Tacoma

Three years into their decision to be partners instead of competitors and form the Northwest Seaport Alliance, the ports of Seattle and Tacoma continue to work together as a major economic generator for the Puget Sound area.

This includes efforts to enhance their waterways. In August, the alliance and the US Army Corps of Engineers inked a cost-sharing agreement for a feasibility study for navigation improvements to the Blair and Sitcum waterways at the Port of Tacoma.

In June, the Army Corps of Engineers signed off on the Chief of Engineers Report, which includes making the Seattle Harbor Navigation Improvement Project eligible for congressional authorization. The proposed project would deepen the East and West Waterways to 57 feet below mean lower low water.

That would make the Seattle Harbor the deepest container port in the US, said alliance spokesman Nick Demerice.

"If it receives authorization and funding for construction, it will improve navigation in Seattle Harbor's East and West Waterways," he said.

Meanwhile, officials are actively soliciting for a tenant for Terminal 5. When it is filled, it will result in an increased flow of cargo through the North Harbor and ensure the continuation of a working waterfront in Seattle, Demerice said.

"As stewards of this incredible public asset, we are careful to work toward an arrangement that makes economic sense for our region," he said. "In the meantime, our staff has worked hard to generate income on the property through interim uses resulting in millions of dollars in annual revenue and many good paying jobs."

The ports are projecting a modest growth for container volumes this year, Demerice said.

"Breakbulk volumes are forecasted to see considerable growth, driven by improvement in market conditions in the project and petroleum sectors," he said. "We expect to see a slight decrease in this year's auto volumes, mirroring an overall decline in the North American auto import market and shifts in the auto supply chain. However, we anticipate good volume growth in 2019 with the completion of the Wallenius Wilhelmsen Solutions auto processing facility in Tacoma."

Tacoma port commissioners recently passed a 30-year lease with Wallenius Wilhelmsen Solutions to develop a $35 million auto processing facility at its 90-acre property in Tacoma. Up to 100,000 vehicles a year are expected to be processed at the new facility, much of which will be destined locally or by rail to the Midwest.

Other new projects on the horizon include the first phase of the Port of Tacoma Road Interchange Project, a $42.5 million effort to boost freight and truck operations between the port and Interstate 5. Washington Gov. Jay Inslee, port commissioners and the city of Fife broke ground on the project in July.

The City of Seattle's $123 million South Lander Street Bridge project, which broke ground last year, is also under construction, which will help ease congestion in the state's busiest freight corridors by removing at-grade access to the tracks and installing a new four-lane bridge that will link 1,400 pedestrians.

Lastly, officials in April celebrated the completion of Tacoma's Pier 4 reconfiguration project, which was $16.1 million under budget.

Located on the General Central Peninsula, the project created the ability to accommodate two 18,000-TEU container ships by aligning Piers 3 and 4 to make a 2,960-foot contiguous pier.

This enhances the $30 million upgrade to Pier 3 done in 2014. Four new super-post-Panamax cranes that were delivered in February at the Husky Terminal are now in service. Four more cranes are being built and are expected to arrive at Husky Terminal in 2019, Demerice said.

Tideworks Technology

Meanwhile, Seattle-based Tideworks Technology has been making waves in the Puget Sound with its terminal operating systems and graphical planning solutions, all in an effort to make marine and intermodal terminal operations and shipping lines work more efficiently.

The family-owned company, which started as the technology division for Carrix, Inc. helping its affiliate SSA Marine's terminal operations in the US and internationally, officially launched in 1999. Two years later, Tideworks secured its first non-affiliate customer, Fraser Surrey Docks in Surrey, BC, Canada.

Since its inception, Tideworks has helped streamline operations at more than 100 facilities with its various products, including Spinnaker Planning Management System (graphical yard and vessel planning) and Traffic Control (a container move dispatch system for orchestrating container handling equipment).

"Terminal operators have continued to feel pressure to do more with less to satisfy their customer base, and to provide ROI to shareholders and investors," said Thomas J. Rucker, president of Tideworks Technology. "Our challenge as a technology partner is to continue finding innovative solutions that support terminal operators in increasing their efficiencies whether it be by automating processes, optimizing the utilization of costly assets, or gaining visibility into operational data that allows them to make decisions to drive positive margin growth. We've made some tremendous developments in recent years incorporating automation and optimization features within our offerings as well as integrating with third-party automation technologies and other business-critical systems."

In the Puget Sound area, Tideworks' solutions are at play at several terminals, including at the port of seattle's SSA Terminal T-18, T-30 and T25 Matson, and the Port of Tacoma's North and South Intermodal yards and SSA Terminals Tacoma as well the BNSF SIG yards in Seattle.

SSA Terminals recently took over the lease at the terminal facility used by Matson in the Port of Tacoma, which required a quick takeover of the facility and operations.

A proposed Port of Seattle project would deepen the East and West Waterways to 57 feet below mean lower low water, making the Seattle harbor the deepest container port in the US. Photo courtesy of the NW Seaport Alliance.

Months before going live, Tideworks integrated with the pre-existing gate system, developed customization around Matson logic and enacted its core TOS products, Rucker said, adding that the teams were able to cut over in a 36-hour window smoothly, so that operations were unaffected.

Tideworks has worked with T-18 to implement greater efficiencies at the gate to ease congestion around the terminal, including using various integrated hardware and software-based automated gate solutions to improve throughput.

"T-18 has seen a big increase in volumes over recent months," Rucker said. "In turn, that led to congestion outside the terminal and on city surface streets in the area."

Tideworks is now developing initiatives to move its applications to a cloud service platform, Rucker said.

"This will not only enhance the scalability of our TOS products for the future, but tremendously improve reliability and minimize impact on our users," he said. "Additionally, there will be a significant reduction to the upfront investments in hardware and the continued management of hardware."


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