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From Shore to Shore: Washington and Oregon Have Alaska Covered.

Much of what Alaska's consumers purchase comes to the state via Portland, Tacoma and Seattle.

Whether by sea, by land or by air, Washington and Oregon serve as essential transportation hubs to the state of Alaska. Consider This--without the ability to ship goods from the Lower 48 to the Last Frontier, the lifestyles that most of us take for granted wouldn't exist. Items that Alaskans use every day-from food to computers to cars-arrive via Portland, Tacoma and Seattle. And many of the goods that Alaska exports, including seafood, find their way to market back through these Northwest states.

By Water, Land and Rail

"Almost everything you consume in Alaska passes through the Puget Sound," explained Shari Gross, a consultant who represents the Port of Tacoma. In 1999, two-way trade between Tacoma and Alaska totaled $3.48 billion. Over 75 percent of all waterborne cargo to Alaska was shipped through the Port of Tacoma. In 2000, the port shipped 444,327 TEUs (or Twenty-foot Equivalent Units) to the Port of Anchorage--almost half a million containers.

"Alaska is our Number 3 trading partner," Gross continued, "and our two main carriers, CSX Lines (formerly SeaLand) and TOTE (Totem Ocean Trailer Express), generate lots of jobs in Pierce County (Tacoma). Last year, more than 1,700 jobs in Washington state were directly related to cargo going to Alaska."

The Alaska market makes up more than 25 percent of CSX Lines' business, according to Jim Keough, manager of business development and government affairs. CSX, which also serves Hawaii, Guam and Puerto Rico, first began trading with Alaska after the Good Friday earthquake of 1964. "We had planned to start sailing to Alaska that summer, but because of the earthquake, we set sail the following week," he explained. "Now we sail into Anchorage and Kodiak two times a week, and into Dutch Harbor one time a week." Keough estimates that the company ships between 1,600 and 2,400 TEUs per week.

The city of Anchorage is also dependent on the Port of Seattle, which provides barge and tug service to Anchorage as well as to different cities in Southeast Alaska. "You name it, we ship it," said Kent Christopher, general manager of Seaport Marketing, who estimates that more than 135,000 TEUs are transported between the Seattle harbor and Alaska each year. "Our business is split pretty evenly between Anchorage and Southeast, with about 8 percent of our total volume going to and from Alaska."

According to Christopher, the Port of Seattle has long played a major part in the development of Alaska. "We've been shipping there since they first dropped the gold off," he said. "Because Seattle is a center of finance and transportation, we've had a close trading relationship with Alaska, and restock the shelves, so to speak."

Seafood, paper products, lumber, construction materials and agricultural goods are also transported through the Port of Portland, though by individual companies and not the port itself. "Basically, companies who want to ship heavier types of commodities that aren't really time sensitive use water as their transportation mode," explained Aaron Ellis, the port's maritime public affairs manager. "A good example is Cereal Food Processors Inc., a flour mill here at the port that trucks its product to Seattle, where it is barged to Anchorage. There's a real advantage in using water transportation over road or rail, in that there isn't as much congestion, it costs less, and it's more environmentally sensitive."

One of the newest players in the Alaska shipping arena is Alaska Railbelt Marine, which offers weekly rail-barge service to Whittier via Seattle. The company, a division of Lynden Inc., began sailing two barges to Alaska in February of 2001, and plans to add a third this year. "Railcars from all over the country are shipped to Alaska on our barges," explained Mike Halko, president of Alaska Railbelt Marine. "One of our barges holds between 48 and 50 railcars." Halko estimates that the new system will enable each barge to add 96 more containers. The cargo can then be offloaded in Whittier, and trucked to its final destination.

According to Tim Boedigheimer, a special account manager based in Anchorage for Viking Freight, a FedEx company, the importance of Seattle and Tacoma as marine transportation hubs cannot be underestimated. "We are very dependent upon steamships and barges for the movement of goods," he explained. "It's expensive to run the Alcan, and it's not something that's beneficial for everyone to use. In Southeast, there is no land alternative; it either comes in by barge or air."

While only a small portion of Viking Freight's business is done in Alaska, Bill Blowers, Alaska special account manager, considers the use of ocean-going vessels very important to their ability to serve customers up north. "Say a retailer in Anchorage buys goods for his store in L.A," explained Blowers. "Viking will pick up the goods, and drive them by trailer to Tacoma. There, we put the goods on one of two different steamship lines--CSX or TOTE--where it takes three days by water to get to Anchorage. If it's a shipment that needs to go to Fairbanks or Kenai, we transship it over land."

By Air

Of course, not all cargo travels by water. Alaskans also depend upon airports and airlines to ship more time-sensitive or high-value equipment.

"Anything can travel by air cargo, from wine to worms," explained Rick Aizawa, air cargo marketing manager at the Port of Portland. Portland International Airport, part of the Port of Portland, ships over a quarter million tons of air cargo annually throughout the U.S., and serves as a hub for both Alaska Airlines and Horizon Air.

"Much of what we ship depends on how quickly a product needs to get to market, or on how it needs to be handled," said Aizawa, who added that most high-value or hard-to-handle items are typically sent to Alaska by air, including hi-tech equipment, machinery parts and perishables. But not all air cargo needs to arrive the same day. "Companies are also getting more savvy, and instead of sitting on inventory, have learned to have items shipped to them as they need them," he explained.

"Airfreight has changed in the past few years in that businesses are now finding that instead of trying to keep expensive parts or medicine in stock, they can make a phone call and get it delivered to their destination in four or five hours," agreed Keoloa Pang-Ching, director of cargo for Alaska Airlines, who estimates that 35 percent of the airline's system-wide revenue was derived from shipments between the Pacific Northwest and Alaska in 2000. The airline operates 10 freighters per week between Seattle and Anchorage.

Rick Aizawa

Air Cargo Marketing Manager

Port of Portland

"Northbound, we ship everything," said Pang-Ching, who says the airline has experienced a five percent increase in airfreight revenue system-wide since last year. "Southbound, about 15 percent of our cargo is regular freight; the rest is perishables, including every type of seafood product imaginable. We definitely see a spike in business during the third quarter as people work to meet their fishing quotas." During the fourth quarter, the company also sees an increase in cargo and passengers during the holidays and hunting seasons.

While Alaska Airlines has seen relatively flat growth from the Alaska market in the last five years, Pang-Ching credits this finding to the fact that other carriers have added more Alaska service in the last few years. "Other freighters from different locations have added capacity," he explained. "Now different points in the United States are also feeding Alaska."

Improvements for the Future

Shipping to and from Alaska isn't inexpensive; and neither is investing in the technology to make it work. Viking Freight has recently added tracking technology to its Web site that allows Alaskan customers to get complete shipping information at any time; CSX Lines has invested in specially made ships that can transit Alaska waters.

"When Alaskans buy goods from the Lower 48, they are completely dependent on their shippers for transportation solutions," explained Viking Freight's Blowers. "We've developed technology that helps them plan better for their businesses.

"For example, say a company orders jackets today from down south. Tomorrow, they can go to work, pull up our Web site and know what was shipped when, and if the shipment was complete," he continued. "This way, they know now what they'll have to sell-if only half the shipment was sent, they'll know that now instead of a week from now when it arrives. They're getting real-time information." Viking Freight also offers fax manifest reports the day after it picks up a shipment, which provides the weight, shipper and bill number to the customer via fax the first thing the next morning.

CSX Lines also has invested in technology to increase its access to the Alaska market, in the form of custom-made, steel-hulled ships. Realizing that bad weather and rough waters might prevent the company from delivering reliable service year-round, the company invested in special D-7 ships, built especially for the Alaska market. "The D-7s can deal with the rough waters in the Gulf of Alaska and the ice in Cook Inlet during the winter months, so that we can get into Alaska year-round," explained CSX's Keough. "These ships would be a waste in any other market; but we need them to provide our Alaska customers with fresh vegetables and year-round inventory. With these ships, we can treat Alaska just like any other market in the U.S.-even though it's a lot tougher to get to."

Because of Alaska's importance to the state of Washington's economy, CSX Lines has also taken an interest in Alaska's political agenda. "We are very active in pursuing Alaska's agenda both locally and in (Washington) D.C.," explained Keough. "Our company works to inform our local elected officials of the importance of Alaska to our local economy on issues like opening up ANWR (the Arctic National Wildlife Refuge), because it's important to us that Alaska have a strong economy in the future."

Just as Alaska benefits from the use of the Pacific Northwest as a transportation hub, so too, do the businesses from Portland to Seattle-Tacoma. As Alaska continues to grow and thrive, so will those companies who continue a symbiotic relationship with the consumers of the 49th state.
COPYRIGHT 2001 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Publication:Alaska Business Monthly
Article Type:Statistical Data Included
Geographic Code:1USA
Date:Aug 1, 2001
Previous Article:The High Cost of Health Insurance.

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