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Industry Profile - Washington’s Shipping Industry: Lifeblood of a Trade-Dependent State |
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Written On: September/October 2005 |
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Written By: by Paul Schlienz |
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Washington’s marine shipping industry has been a vital component of its economy since the 19th century. Its importance has only grown over the years.
The Klondike gold rush of 1897-1898 jumpstarted Washington’s shipping industry. Because Seattle was two days nearer to Skagway, Alaska — the port nearest to the Klondike gold fields in Canada’s Yukon — than San Francisco, Seattle became the critical link in the supply line for the gold rush. Prospectors, hoping to strike it rich, in addition to all of the supplies they would need to survive in the cold north, passed over the docks of Seattle.
The gold rush firmly entrenched Seattle as the gateway to Alaska. Once the gold rush died down, the Alaska trade continued unabated with Seattle providing essentials for daily living while Alaska shipped its own bounty — fish, furs, timber and now oil — to Seattle or other Puget Sound ports.
Washington’s strong connection to Alaska is alive and well and growing in 2005, although much of the focus has shifted to Seattle’s rival Tacoma where the majority of the Alaska trade is now moving. In turn, the majority of the goods that are shipped to Alaska are now arriving in Anchorage, a great port city so young that it did not even exist at the time of the Klondike gold rush.
For the past 30 years, Federal Way-based Totem Ocean Trailer Express has been shipping between Tacoma and Anchorage many of the goods that make life livable for Alaskans.
TOTE's two vessels accommodate trailers that are rolled on and off the ships, which make the journey between Tacoma and Anchorage in 66 hours. The system of roll-on/roll-off trailers makes the operation much more efficient than it would be otherwise by allowing for quicker turnarounds.
"Anything you can imagine that we use in the Lower 48 states, that's what we take up to Alaska," TOTE's Denise Timm said.
Unlike Anchorage, southeastern Alaska's small ports, including Juneau, Petersburg and Ketchikan, are unable to accommodate TOTE's large vessels. Nevertheless, their supplies are still shipped from Washington by a Washington company.
Barges and tugs from Seattle's FOSS Maritime Services are southeastern Alaska's lifeline. The largest tug-and-barge operator on the West Coast, one of FOSS's specialties is oversize cargo, including construction equipment and building modules.
FOSS's operations are not restricted to the ocean and its estuaries. The company also operates tugs and barges along the Snake and Columbia rivers from Lewiston, Idaho, to Astoria, Ore. These vessels are filled with agricultural bounty from east of the Cascades.
In Columbia River ports such as Vancouver, Wash. and Portland, Ore., commodities like wheat are transferred to ships bound for points throughout the world, primarily to Asia — the largest market for Washington’s products.
Asia Washington’s Biggest Market
In the port of Vancouver, Wash., it is easy to see the massive volume of trade between Washington and Asia. Agricultural products, mineral ores, scrap metal, lumber, pulp and paper products are among the goods that go out of Vancouver.
Conversely, from across the Pacific, products like fertilizer, steel, automobiles and unique products such as windmill components, first touch U.S. soil on the Vancouver docks. From Vancouver, a large portion of the Asian goods are transshipped by rail or truck to other parts of the United States.
Increasingly, Washington's shipping industry provides the raw materials used in Asian countries to assemble finished products that are shipped back to the United States. A case in point is the scrap metal that goes to South Korea and comes back in the form of steel. Because steel is produced more cheaply with Korean labor, the American consumer reaps the ultimate benefit in lower costs.
Washington's largest port, Seattle, also benefits from foreign trade with Asia.
"Ninety-three percent of Seattle's total container volume is moving between Seattle and Asia," the Port of Seattle's Mick Schultz observed. "China is our largest trading partner in terms of tonnage, dollars and containers. Japan is number two, and is still the country that receives the largest level of imports from Seattle. However, in every other category, China now leads due to its large population and growing economy."
Washington — the most trade-dependant state in the nation — reaps tremendous benefits from its shipping industry. The Port of Seattle alone has generated approximately 200,000 jobs with its trade and transportation activities. These activities create $12 billion in revenue and $626 million in state and local tax revenues.
Port Capacity Could Limit Growth
The future looks bright for this vital industry. Powered by the Asia trade, Seattle is currently the fastest growing port in the United States. This year alone the port has had a 25 percent growth in container cargo volume and expects 2 million containers to move through the port during 2005. If, in the future, Congress opens a small potion of Alaska’s Arctic National Wildlife Refuge, Washington’s shipping industry would benefit tremendously from the inevitable demand for goods and cargo.
There are, however, some potential clouds on the horizon. While the growth potential for trade appears to be nearly limitless, the capacity of ports to handle increased goods and cargo is finite. Indeed, port capacity is a major concern not just in Washington, but throughout the country.
"Right now you have a bottleneck at the port of Los Angeles-Long Beach," said Joseph Langjahr of Seattle's Marine Resources Group, parent company of FOSS Maritime Services. "It’s a real challenge to get the cargo on rail or trucks. The freeways are so overloaded that the port has extended its operation to 24 hours as a result."
Langjahr fears Washington will face a similar crisis.
Nevertheless, not all Washington ports are hemmed in. The Port of Vancouver, for example, has 550 acres for expansion. Conversely, while the Port of Seattle has little space for expansion, it is developing strategies to handle cargo beyond its current limit of 3 million containers per year.
It will be to everyone’s benefit if growth in shipping can be maintained and expanded.
"Ports are a very important part of the supply chain," the Port of Vancouver’s Maureen Chan-Hefflin said. "The shipping industry affects everyone. Think about it. Wal-Mart would not be able to sell at the price that it does were it not for global trade."
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