In the annals of local economic development strategies, cooperating with your closest competitor might rank among the more Herculean tasks of local politicians. But that’s exactly what the ports of Seattle and Tacoma, Washington, managed to pull off a few years ago.
Facilities nestled in the picturesque waters of Puget Sound—Seattle to the north, Tacoma to the south—had long jostled with each other for the business of big, ocean-going ships. So in 2015, they created the Northwest Seaport Alliance, a company that now runs two harbors under one aegis.
Leaders of both ports had surveyed the consolidating shipping industry and saw a grim outlook. Shipping lines were growing bigger and cooperating with each other, increasing their negotiating muscle with the port operators whom they pay to load and unload ships of containers and other cargo.
“All of that change is driving ports to look at our business models differently and adjust to the changes we’re seeing globally,” says John Wolfe, CEO of the alliance.
The seaport alliance, though still in its infancy, is a local attempt to solve a global problem. Ports need major investments and workforces need to be ready for the changes. If the partnership succeeds, it won’t eliminate the ups and downs of a notoriously volatile industry, but it may take the edge off.
“We’re going to continue to have peaks and valleys,” says Dick Marzano, president of the Tacoma Port Commission. “The peaks won’t be as high and the valleys won’t be as low as they were in the past.”
Though a mere 32 miles apart, Seattle and Tacoma had been strong competitors for more than a century before they started taking baby steps toward cooperation on security measures in the early 2000s, after the September 11 terror attacks, says John Creighton, president of the Port of Seattle Commission. Around the same time, Canadian ports at Prince Rupert and Vancouver, which can whisk cargo off to the United States as easily as American ones, started eating away at Seattle-Tacoma’s market share.
Seattle and Tacoma port authorities continued working together on environmental issues, but commercial questions remained off limits until the Great Recession savaged global trade in 2008 and 2009, pushing the question of an alliance to the fore. At a meeting at an Italian restaurant in Federal Way, a small town nestled between Seattle and Tacoma, Creighton and Marzano broached the idea.
It took some years, but the Northwest Seaport Alliance scooped the facilities run by port commissioners (who are elected officials, by the way) in both cities into a single company. However, it preserved the existence of the commissions, which have to sign off on major decisions.
“It’s a bit more work for all of us,” Wolfe says.
The governance model has passed some initial tests. For example, the alliance got approval for a $141 million investment in Tacoma’s facilities made possible by fees paid for using docks in both Seattle and Tacoma. The construction, and the purchase of two new cranes, will allow two large ships to unload simultaneously.
That kind of cooperation between the two cities is “unheard of” in any other area of business, Wolfe says.
