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Freight Handlers Fortified to Haul Record Imports by Steve Wilhelm Puget Sound Business Journal, August 14, 2005

Heavy volumes of holiday import cargo are rising toward an expected record fall peak, and experts seem confident that the Puget Sound region's freight system can handle the load.

The combination of creating new terminal capacity at the ports of Seattle and Tacoma, hiring additional longshore labor on the docks, and creating a more efficient way for the railroads to route eastbound container trains, freight experts say, suggests a smooth fall freight season lies ahead.

"It's starting to build, and right now everything appears to be manageable," said Steve Stivala, president of MacMillan-Piper Inc., a Seattle warehousing and container loading company. "We're in a much better position this year than last year, in terms of capacity, terminals ready to handle the volume and labor in place."

In many ways, last year's fall peak of imports was a boon for the local cargo-moving industry.

There was a significant shift of import cargo from Southern California to the Puget Sound area as shippers, those who own the cargo, have taken steps to make sure they have alternatives if there's congestion anywhere in the system. Last year, congestion caused ships to stack up outside Southern California ports, unable to unload. Many of those ships finally were diverted to the Pacific Northwest.

"I think (Puget Sound ports) definitely have the capacity to handle it, and that much of the growth has to do with shippers trying to diversify away from Southern California," said Carin Saunders, a consultant for Manalytics International Inc. of San Francisco. "I know that Seattle is prepared for the volume."

Efforts by shippers to diversify where they receive cargo had increased Puget Sound ports' percent of West Coast import cargo to 19 percent as of May. That represents a 3 percent increase over the same period a year before, and the first real hike after 13 straight years of market-share losses to Southern California.

Executives at the ports of Seattle and Tacoma both expect their imports this year will exceed the equivalent of 2 million 20-foot containers for the first time.

"I think it's very positive, both for us and Seattle," said Doug Ljungren, business planning manager for the Port of Tacoma. "There's no question that major shippers and the steamship lines are looking to divert ... I think it's a permanent shift."

Last fall's cargo crunch has inspired unusual efforts to create new capacity to handle freight throughout the Northwest system. That effort has coincided with several long-planned expansions.

By year's end, the Port of Tacoma will have opened or expanded three major ocean terminals, including the Pierce County Terminals, K-line's new expanded terminal, and a rebuilt terminal for the port's newest carrier, Yang Ming. The work increased overall terminal space by 28 percent this year.

The Port of Seattle on Sept. 3 will re-open Terminal 25 for Matson Navigation. That move in turn creates more space at Terminal 18, which Matson is vacating.

Several ocean carriers also have created temporary services that will operate here for just three or four months during the peak of the rush, to make sure containers flow smoothly into Puget Sound.

"This is much more proactive, instead of last year where everything was a last-minute panic type of deal," Stivala said.

The International Longshore and Warehouse Union also has responded to the projected growth by hiring and training hundreds of new workers in Tacoma and Seattle.

In Seattle, ILWU Local 19 has added more than 120 drivers to operate trucks within the terminals, 26 container-crane operators and 70 drivers of large container-moving machines, said Local 19 president Herald Ugles. He said 12,000 workers were dispatched out of Seattle's union during the cargo peak last October -- a record that he expects will be broken this year.

"The peak season runs from anywhere from the middle or end of August to October or November. It seems that everybody's in pretty good shape for it," he said.

Port officials said they're confident that the large railroads serving this region, Burlington Northern Santa Fe (BNSF) and Union Pacific, have been preparing sufficiently to handle the expected volumes of import cargo.

In May, BNSF started running most eastbound trains from Tacoma south and then east along the Columbia River, relieving pressure on the Stevens Pass tunnel to the north of the Puget Sound area, which already is operating near capacity.

The railroads also have been developing other ways to squeeze capacity out of their systems, including "purifying" trains, which means making sure a container train handles cargo only for a specific destination, so it doesn't have to be broken up along the way. The Port of Tacoma and BNSF also are experimenting with a new satellite-based system, which will continually update the position of inbound ships so the railroads can better position rail cars before those ships arrive.

"The system is tighter enough now, so everything has to stay in balance. If the terminals expand, labor better expand, too," Ljungren said.