Imports, Volume Decline at Port
by Kelly Kearsley
The News Tribune, May 31, 2008
The country's economic slowdown is playing out at the Port of Tacoma.
Container volume was down by 5.8 percent in the first quarter of this year, according to Tong Zhu, the port's commercial strategy director.
Zhu presented the first-quarter results to the Port Commission as part of a cargo forecast and budget update Thursday.
The dip is driven by an expected decline in imports as some of the region's main importers grapple with fallout from the national housing downturn and the credit crunch.
"A lot of the decrease is because West Coast ports have seen a huge reduction in imports - the demand is not there," Zhu said.
Port Executive Director Tim Farrell said Tacoma and other West Coast ports anticipated the cargo dip and that he doesn't expect imports to pick up until next year.
The Tacoma port's decline was higher than the West Coast average - a 3.9 percent decrease in container volume from Vancouver, B.C., to Southern California.
The Port of Seattle posted a decline of 2.5 percent, while the Port of Portland witnessed a 12 percent increase in its container volume.
Zhu credited the Seattle port's more modest dip to the strength of its domestic trade, mostly with Alaska.
In Portland, a major retailer relocated its purchasing department near the Oregon port and a potato processing plant opened.
Though total West Coast imports have declined, the Puget Sound ports' market share remains steady at about 16 percent.
Zhu anticipates the port's total container volume for 2008 will be about the same as last year - at 1.9 million containers.
"I think we will come in flat, and that will be good for the port," Zhu said.
The port remains on track with its 2008 budget.
Income from the first four months of operations was on par with last year at $6.5 million. Revenue, which the port earns from its terminal leases and from moving cargo, increased, but so did expenses.
The port aims for at least 15 percent return on revenue.
Staff members project income for the year to be at $20.7 million, which is a 20 percent return on revenue.
The port's spending on capital projects will be less than the 2008 budget projected. The port anticipates spending $236 million on construction this year, down from the original forecast of $265 million.
It's already spent $87 million this year, including almost $36 million in land acquisitions, said Jeff Smith, the port's finance director.
Much of that property is on the Blair-Hylebos Peninsula, which the port is developing into shipping container terminals.
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