All week, we’ve been discussing the challenges and opportunities faced by the Port of Seattle and the Port of Tacoma, which I first wrote about in last Sunday’s column. The near-term competitive dangers are well-known: The two ports cannibalizing each other’s business while overall market share is falling, as well as the potential loss of shipping to the wider Panama Canal and the port at Prince Rupert, B.C.
Overall, West Coast U.S. ports failed to bring in much new container traffic in the first quarter of the year: Seattle off 0.4 percent, Tacoma 0.3 percent, and Long Beach down 1.3 percent. Prince Rupert added 1.1 percent, but still accounts for only 1.25 percent of all West Coast North American port container traffic. Total container volume for the first quarter on the West Coast didn’t grow. Growth remains weak in the U.S. economy and evidence keeps coming out that China is slowing down.
Long-term challenges are even bigger. In the decades ahead, climate change will likely make a year-round northern passage possible. This has the potential to drastically change shipping patterns; then there’s the other costs and disruptions that will accompany a warming planet, including rising sea levels.
Higher energy prices are another wild card. The 10,000-mile supply chain from Asia to North America was predicated on relatively cheap oil. Already, China is taking a confrontational stance with its neighbors over the potentially oil-rich South China Sea. In addition to geopolitical risks, this future will be murky for shipping.
America lacks a coherent infrastructure policy, including for its ports. U.S. ports tend not to be as highly automated as some of their global rivals. Even Canada has been far smarter in investing strategically to link ports to rail systems.
Finally, commercial fishing remains important to the Port of Seattle. This historic sector remains strong here, but the port must protect and continue to invest in Fisherman’s Terminal. That might not be enough. The Pacific faces overfishing, a huge trash vortex and species killed or diminished as a result of climate change.
The ports are everybody’s business, not least because they are major economic engines for the region.
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Today’s Econ Haiku:
Seattle sun break
If they build all those towers
Shadow breaks will rise