The heads of the Washington state ports of Seattle and Tacoma formally adopted yesterday the integration of the ports' marine terminal investments, operations, planning, and marketing, the first joint agreement of its kind in North America.
The action came less than two weeks after the Federal Maritime Commission (FMC) approved the partnership established by the two ports, which will be known as the "Northwest Seaport Alliance." The ports will remain separate organizations and retain ownership of their respective assets. Under a port development authority, the ports will manage the container, breakbulk, auto, and some bulk terminals in Seattle and Tacoma. The two ports will be marketed as one entity by a joint team composed of executives that had previously worked for the individual ports.
In January 2014, the ports petitioned the FMC for authority to gather and share information about each other's operations, facilities, and rates, subject to appropriate legal oversight. A merger or any other "change in governance" would not be part of any talks, the ports told the agency.
In March 2014, the FMC ruled that port executives could begin discussions aimed at developing a partnership. Over the next 16 months, several agreements were filed with the FMC as the partnership plan evolved. It culminated with the FMC's July 23 ruling approving the model of a port development authority managing key aspects of the two ports' businesses.
By unifying key capabilities, the ports said they would be better able to compete in a rapidly changing world of megacarrier alliances and increased competition from West Coast ports in the U.S., Canada, and Mexico. Combined, the two ports handled more than 3.45 million twenty-foot equivalent units (TEU) containers in 2014, making them the fourth busiest containerport behind the ports of Los Angeles, Long Beach, and New York and New Jersey.
The commissioners also hired John Wolfe, current CEO at the Port of Tacoma, as the Alliance's CEO. He will retain his current title, and lead both organizations for up to five years, the commissioners said.
