By CHARLES H. FEATHERSTONE
For The Basin Business Journal
MOSES LAKE — Container ships are getting bigger. And that means that seaports like Seattle and Tacoma have to work to keep up.
According to John Tullis, a business development manager with the Northwest Seaport Alliance — the organization that oversees operations at the seaports of both Seattle and Tacoma — the increasing size of container ships is one way ocean carriers are struggling to compete.
“It means lower costs per unit and to operate. It’s economies of scale,” Tullis said.
Speaking at the Washington-Oregon Potato Conference in Kennewick in January, Tullis said bigger ships pose a real challenge to port capacity, requiring more moves from the giant cranes that load and unload container ships, more terminal space, deeper harbor channels and more trucks to haul all the additional cargo.
However, it also means shipping schedules are much tighter, and even a small delay can cause bigger problems, Tullis said.
A number of major ocean carriers — firms that operate cargo ships — have formed alliances, sharing space on each other’s vessels, opening up additional destinations and reducing the operating costs of running larger ships.
“However, capacity is outpacing demand for cargo shipping,” Tullis said. “Supply and demand has not favored the ocean carriers.”
Container shipments are measures in Twenty-foot Equivalent Units (TEUs). A typical 40-foot shipping container is 2 TEUs. Last year, Tullis said the two ports handled around 3.8 TEUs worth of cargo, with imports rising 3 percent while exports dipped 1 percent.
The rise in imports was largely driven by companies trying to “frontload volume” ahead of the imposition of tariffs by the Trump administration, Tullis said. Lower than expected exports were the result of a strong dollar and tariffs, he added.
“The trade war has affected imports and exports,” Tullis said. “Apples have been hit significantly, pulses are down and there have been knock-on effects.”
However, Tullis said that trade continues to grow, and potatoes are “a key export.” Around 75 percent of U.S. potato exports leave the ports of Seattle and Tacoma, Tullis said, accounting for about 7 percent of the port’s total export volume.
By volume, Tullis said the port’s largest single export was hay, which amounted to around 200,000 TEUs in 2018.
Some of the larger container ships can carry up to 13,000 TEUs, more than double what a typical ship carried just a few years ago, Tullis said.
Tullis said the ports of Seattle and Tacoma — which together form the fifth-largest port in North America — are working on improvements to berths and piers in both ports to handle the larger container ships and allow trucks to move in and out of the port faster.
In fact, the Northwest Seaport Alliance has secured permits to dredge the harbor in Seattle to 57 feet and is working on getting approval to dredge in Tacoma, Tullis said. The deeper draft would allow for more cargo to be loaded on larger container ships.
“So larger ships can continue to call at our gateway,” he said.