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Puget Sound ports of call.

Puget Sound Ports Of Call

WITH ALASKAN TRADE responsible for more than 3 percent of Washington state's employment, Puget Sound ports strive ever harder to tie the anchors of the Last Frontier to their shores. Dynamic forces in their local economies, the ports of Bellingham, Tacoma and Seattle also help to pump billions of dollars annually into the Washington economy.

Community leaders in Washington long ago recognized the strategic value of the state's deep-water ports in linking the transportation needs up north to the contiguous states and beyond. Sometimes referred to as "gateways" to Alaska, its major ports serve as essential connections in Alaska's trade and travel routes.

The Port of Seattle, the third largest container port on the West Coast - only smaller than Los Angeles and Long Beach - has been a crucial trade and travel link to Alaska for nearly a century. The Port of Bellingham is a long-time harbor for vessels fishing in Alaska and is the new southern terminus of the Alaska Marine Highway System. The Port of Tacoma is an industrial port and the sixth largest container port in North America. All three perform significant roles in an increasingly interdependent economic relationship with the 49th state.

Roots of the connection can be traced to 1897 and the Klondike Gold Rush. Miners seeking their riches in the Great Land were required by law to carry one year's worth of supplies. In an aggressive promotional campaign, Seattle launched itself as the "obvious departure point to the Yukon." Miners by the thousands were outfitted there for the trek north.

Ships returned carrying gold from the Last Frontier. Soon the number and size of ships available were no longer adequate for the hordes of miners waiting for passage. Business boomed due to increasing demand, and by the turn of the century, the Washington-Alaska bond was "set in gold."

Washington's role in serving its resource-rich neighbor to the north has flourished since gold rush days. As the 1900s progressed, competition among Puget Sound ports to serve Alaska's growing business community continued to increase.

System Go. To compete and prosper as a transportation hub in this day of burgeoning trade requires leading-edge methods of cargo handling, and Puget Sound ports have embraced technology. For example, Seattle was the first U.S. port to computerize tracing of cargo movement systems. It has developed computer applications to help its customers track cargo shipments and electronically exchange information.

Pairing cargo transfer technology with land and warehousing facilities enables ports to attract large shipping lines as tenants of port grounds. With successful shipping companies serving the communities, the port is a more attractive trading partner.

One critical step in attracting business to the ports has been construction and utilization of intermodal transportation, which combines air, land and sea transport to move goods. Seattle calls its freight network the "Seattle System." It operates the largest port-owned and managed transportation, warehousing and distribution service in the United States. The port's domain includes Seattle-Tacoma International Airport and 1.5 million square feet of warehousing and distribution space.

In the past decade, the port initiated several programs to expedite cargo transfer. Although Seattle has long had rail yards close to the dock, it did not have rail spurs on the dock until last year. "Seattle Shortcut" is the name Seattle uses in promoting its intermodal facilities, while the Port of Tacoma markets its capabilities as the "Tacoma Advantage."

The Washington-Alaska trade relationship serves two important functions. First, Alaska needs convenient ports through which to direct its abundant natural resources, and Puget Sound ports have the infrastructures to accommodate that need. Second, Alaska imports many goods, including food stuffs and manufactured items that are either unavailable or inadequate at home.

According to a study of Alaska's impact on the Puget Sound region commissioned by the Seattle and Tacoma ports and chambers of commerce in 1988, more than 50,000 jobs in the area can be traced to business with the 49th state. This creates an impact of more than $2 billion on the Washington economy, equal to that of the state's logging industry.

Transportation and manufacturing accounted for more than a quarter of the Alaska-contributed jobs in 1985, the year on which the study was based. Nearly 6,000 Puget Sound workers earned $170 million transporting cargo and passengers between Washington and Alaska. Half of those jobs were related to waterborned freight.

In 1985, 900,000 tons of goods moved northbound to Alaska from Puget Sound ports, including 171,000 tons of jet fuel, 154,000 tons of groceries and nearly 200,000 tons of wood products. Says John Terpstra, Port of Tacoma executive director, "Really what we are is the bread basket for what you need up there."

According to the impact study, Washington freight shipments to Alaska dropped sharply during Alaska's economic slump of the last few years. Northbound freight dropped from a high of almost 3 million tons in 1984 to about 1.7 million tons in 1986. Last year, the Port of Tacoma experienced a 16 percent increase in volume of trade with Alaska. One-third of its container (truck-trailer-sized marine shipping units) business and 10 percent of its overall 1989 trade of 17.1 million tons was with Alaska.

Cargo Connections. The Port of Tacoma, 6th largest container port in North America and 20th largest in the world, now handles more than 80 percent of all waterborne commerce moving to Alaska from the Lower 48. Two major reasons for the Port of Tacoma's gigantic share in Alaska container trade are the terminals of Totem Ocean Trailer Express (Tote) and Sea-Land Service Inc. Together, these marine lines transport 80 percent of the dry cargo destined for Alaska. The companies' terminals both had been located in Seattle. Tote moved in 1975, Sea-Land in 1985.

Due to the presence of Tote, Sea-Land and two other major steamship lines - Maersk and K-Line - Tacoma has seen a 750 percent increase in total cargo transfer since 1984 - from 150,000 to 925,000 20-foot units, a measurement standard.

The executive director of the Port of Seattle, Zeger van Asch van Wijck, says the port's ties with Alaska remain strong. "We have 12 barge companies doing business with Alaska directly. The barge trade has provided good opportunities here," he notes. Containerized and bulk cargoes moved between the port and Alaska are transported by these barge companies.

A major barge operator is Crowley Maritime Corp., which operates the Alaska Hydro-Train that serves Railbelt communities through Whittier, hauling primarily rail cars and truck trailers. Crowley also operates barges to Southwest and Western Alaska.

The Port of Bellingham handled 615,000 tons of cargo last year, a 28 percent increase over 1988, but a diminutive figure in light of the immense tonnage passing through Tacoma and Seattle ports. One factor is the lack of a cargo connection with Alaska, an avenue the port would like to pave with new business.

Don Flemming, executive director of the Port of Bellingham, says, "We are, frankly, the most diverse port in the state. Other ports may have more tonnage and bigger portage, but we go beyond that. For example, we own some 30,000 square feet of industrial parks, shopping malls and other marine-related facilities." Additionally, the port owns three shipyards and has the second largest pleasure boat district in the state.

Not Made in Alaska. Alaska is being developed at a rate far beyond its established manufacturing capabilities. As the nearest populous region able to fill this gap, Puget Sound has produced many of the goods needed for growth. Topping the region's list of manufactured exports to Alaska are construction products of wood, metal, cement and glass.

Construction by the 49th state's petroleum industry has significantly bolstered the Washington economy. Following discovery of the Prudhoe Bay oil field in 1968, Puget Sound ports worked feverishly to meet demand for equipment and supplies to construct the Trans-Alaska Pipeline System. Tug and barge capacity at the Port of Seattle more than doubled, and in 1970, one million tons of cargo traveled to the North Slope. That year, Alaska-bound barge movement alone injected $1.75 million into Puget Sound's economy.

More than one half of the pipe used in the pipeline was shipped from the Port of Tacoma, and 394 oil-field modules were built there for use on the North Slope. During the peak of construction, as many as 3,000 workers were employed at the port to build the modules.

New Alaska petroleum-related projects, such as Wright Schuchart Harbor Co.'s construction at the Port of Tacoma of four oil-field modules for BP Exploration, are under way at the ports. The Port of Tacoma has land available to lease for construction, contrary to the Port of Seattle, which has very little land available for such use. Tacoma owns 2,400 acres of land on the tide flats, 700-800 acres of which are not yet developed. Plans to either remove or replace an aging bridge in the Blair waterway and to widen and deepen the waterway itself by 1994 would open up about 300 more acres of land.

An added attraction promoting business at the ports is land designated with foreign trade zone status. Goods can be held in a foreign trade zone for an unlimited period of time without being subject to customs entry, payment of duty or tax, or bond. Tacoma recently expanded its FTZ to 919 acres, and Seattle last year received approval to increase its FTZ from 1.4 acres to 1,400 acres. The Port of Bellingham has three FTZs on 281 acres.

Fishing Lure. Washington's fishing industry would be a fish out of water if not for Alaska's seafood-plenty seas. Early in the 20th Century, Washington fishermen already had set their hooks firmly in Alaskan waters.

In 1916, Bellingham-based Pacific American Fisheries Co. built a fleet of wooden, steam-powered ships for the Alaska-bound industry. The company grew to include not only a large shipyard, operated today by Maritime Contractors Inc., but a cannery and canned salmon warehouse. At one time the cannery was the largest in the world, accommodating 18 canning lines. No longer in operation, the company's decrepit buildings were torn down to make way for the new Alaska ferry terminal.

Today, nearly 12,000 Puget Sound residents are employed in Alaska-related fisheries industries, and it is estimated that this year nearly 4,000 of them will find work in bottomfish industries alone. Alaskan waters supply 70 percent of Washington fishermen's harvest. Recent ballooning of bottomfish-related industries, specifically the rapidly growing factory trawler fleet, is expected to increase this dependence on Alaska seafood.

Growth of the fishing fleet is reflected in expansion of Puget Sound port facilities. The Port of Seattle spent $13 million in 1988 to expand its Fishermen's Terminal, where there is space for 700 vessels and specialized facilities for mooring and servicing the North Pacific fishing fleet.

Seattle's van Asch van Wijck says, "Expanding chill facilities is one of our major priorities. We are trying to improve fishing facilities before they are needed. We are pro-active and are making facilities available for mooring and supplies." The port owns 8.2 million cubic feet of cold storage space.

The Port of Tacoma has 30,000 square feet of cold-storage facilities used for seafood handling and storage of meats from New Zealand and Australia. A new $16-million cold storage and fish processing center is expected to be completed this year at the Port Commerce Center.

Cold storage space in Japan, the primary consumer of Pacific Northwest fish exports, has become more expensive than in the United States. As a result, demand for cold storage space in this country is encouraging new investment.

Travel Trends. More than one million people travel between Alaska and the Puget Sound region each year. As a destination for vacations, entertainment, shopping and business, the region annually attracts 150,000 Alaskans, who pump millions of dollars into the Washington economy during their average five-day stays.

A major carrier in this treasury of travel is the state-owned Alaska Marine Highway System, based in Juneau. For more than 20 years, the company's feries docked at the Port of Seattle. As the 1989 September expiration of that contract neared, the state of Alaska opened the ferry's Washington terminus rights to new bids. With the lure of an influx of tourists and dollars, the ports of Seattle and Bellingham and the City of Tacoma courted the privilege.

Bellingham's growing international airport, deep waters and a reduction of at least four hours sailing time from the Seattle route helped to turn the tide, but an even more enticing bait was the port's promise to construct a large cruise ship terminal. It also promised lower rent than Seattle, and despite the Port of Seattle's counteroffer, Bellingham won the 20-year contract.

On October 3, the M/V Columbia, largest vessel of the Alaska Marine Highway fleet, entered Bellingham Harbor, severing its decades-long Seattle connection. Bellingham, a community of 50,000, had promoted the move as long as 10 years ago, and the port had bid for the lease twice before. Many in the Bellingham community - businesses and private residents - contributed to the effort to attract the ferry line.

Terpstra says the Port of Tacoma did not compete for the business because, as a sprawling industrial port, it has no accommodations for travelers. Instead, the City of Tacoma bid for the distinction. He feels that the bidding for the ferry terminus is one example of how competition among the ports can go too far.

"On the surface, Bellingham appears to have invested very heavily to acquire the ferry. What we had in that situation was a `captive cargo.' The Alaska ferry is destined to land somewhere in Puget Sound. I think lack of competition could have helped Bellingham to get a more fair return on the deal," says Terpstra.

But Bellingham's Flemming says the port bid despite the costs involved because "we are building for our future." He adds that in addition to the 20-year lease from the ferry system, the port benefits from a maintenance contract and ticketing office and the community benefits from increased business. "We see quite a bit of shopping going on and a lot of automobiles with Alaska plates. Also, there are many automobiles being purchased and taken north," he explains.

Bellingham profits from its proximity to Vancouver - only about 50 miles away - and the Alaska ferry is one more plus in that burgeoning relationship. Doug Burton, the ferry system's customer service manager in Juneau, says that Canada travel agents and other businesses are showing much more interest in the Alaska ferries since the move to Bellingham.

The 27,000-square-foot, brick and paned-glass ferry facility is 12 miles from port-owned and operated Bellingham International Airport, where passenger traffic has increased 445 percent since 1985. Five years ago, the airport accommodated only single-prop planes; now several major airlines host direct flights to and from the city.

Alaska Airlines entered the market last June, offering three round trip flights each weekday between Seattle and Bellingham, with same-plane connections to farther south cities. The company's sister-carrier, Horizon Air, already served Bellingham.

The ferry system's Burton says the presence of the Alaska Marine Highway System's $9.3 million, six-acre terminal "is not going to make or break Bellingham any more than it did Seattle, although the impact is, of course, greater on a smaller community." The ferry line carries from 300-600 passengers weekly into or out of Bellingham, depending on the season.

Burton believes the Bellingham community's overwhelming response to the move is more a reaction to future possibilities resulting from the contract than to the move itself. "I think they're counting on this being the first of many steps. Opening the port to cruise ships is a new area for them," he says. Port officials are hopeful that the modern cruise ship terminal will entice similar companies to dock in Bellingham's harbor. Community tourism promoters also hope the ferry will help to attract development partners for a hotel and convention center on the waterfront at Squalicum Harbor.

The Port of Bellingham's Flemming notes, "We've had at least three different cruise ship companies come forward since we put in the terminal. We see Alaska as the anchor tenant in this process." Another area for potential growth stemming from the ferry business is increased rail service to the community. Flemming says AmTrak is examining the possibility of extending service from Seattle to Vancouver through Bellingham. In February, Bellingham's port commission appropriated $50,000 to develop a master plan. Flemming says one focus will be linking sea, air and water transport to promote the port's ability to serve as a shipping hub.

New Directions. Also looking to increase business, Tacoma and Seattle are cooperating to promote the business of transportation in the Puget Sound area. Among their competitors are ports in Oregon and California, specifically, Los Angeles, Long Beach and Portland.

Terpstra says half of the containers shipped to Tacoma board trains for the Midwest and East Coast. "It is a discretionary cargo (not dependent on any one port). Either individually or combined, we have opportunities to gain more of that business. Together it's a better `mousetrap'; a better system that is economical to steamship lines." He feels Tacoma and Seattle could double cargo handled by the year 2000.

The executive director says port officials support Alaskan efforts to promote development. "We are total backers of Alaska. Your good fortune will be the good fortune of the Port of Tacoma. We back ANWR (Arctic National Wildlife Reserve), and we think the wetlands policy as applied to Alaska is unreasonable. We feel we are partners with Alaska," he says.

Washington accounts for nearly 90 percent of the value of waterborne foreign imports entering the Pacific Northwest and 70 percent of the value of waterborne exports leaving the region for foreign destinations. Ranked by value of foreign cargo or by total container units, each of the ports of Tacoma and Seattle is among the 20 largest ports in the world. For the last four years, the Port of Seattle has been the leading U.S. port in container exports to Asia, prompting the port's promoters to call it the "Gateway to the Pacific Rim."

Old trade and travel routes with a few new twists, continue to shape the Washington-Alaska transportation connection. From gold rush to oil era, Puget Sound's importance to Alaska's transportation has followed a pattern of need and supply. What Alaska needs, the region's ports strive to provide. As they succeed, they profit considerably and continue to serve as important links to the Last Frontier.

PHOTO : Large overhead cranes position containers on a Sea-Land vessel in Tacoma, terminus for the two principal water carriers serving Anchorage.

PHOTO : A crowd turned out on Oct. 3, 1989, when the first Alaska Marine Highway System ferry docked at the new Bellingham terminal.
COPYRIGHT 1990 Alaska Business Publishing Company, Inc.
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Bellingham, Seattle, Tacoma, Washington state
Author:Denny, Catherine
Publication:Alaska Business Monthly
Date:Apr 1, 1990
Words:3150
Previous Article:Tourism rides currents of change.
Next Article:Marine transport: back on an even keel.


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