With the approval of the Federal Maritime Commission (FMC), several ports that previously competed for market share are now working cooperatively—exploring opportunities, sharing data, promoting cargo-handling efficiencies, expanding infrastructure. This trend among ports to form alliances with other ports in the same geographic region has come in response to the recent alliances formed by shipping companies.
As Mario Cordero, FMC chairman and a former port commissioner, put it, “In my view, the close proximity of some major ports requires they work together for the greater good: the economy of that particular region.”
The reality of change
Last year saw the consolidation of eleven of the world’s largest container-shipping lines into three east-west alliances: Ocean Alliance, THE Alliance, and 2M. Taking effect as of April 1, these alliances will control s much as 90% of shipments on major global trade routes. When their shipping routes were revealed, it became clear that they were looking to transport as much capacity in as few vessels as possible—which would logically mean more mega-ships in the mix.
It also follows that smaller ports, unable to accommodate those ships, could—and probably would—be at a severe disadvantage. Regional port alliances offer ways to band together to meet that challenge.
According to Steve Fisher, executive director of the American Great Lakes Ports Association, the key to productive port collaborations depends on each port articulating success in its own way. Factors in measuring port success include things like:
- Economic impacts (especially jobs)
- Return on investment
- Serving community needs
To capture cargo in the changing world of shipping, it appears that ports will increasingly need to look at the Big Picture of Things, and work together as part of a complete supply chain.
Success stories in the making
Among the existing and evolving port partnerships—Los Angeles/Long Beach, Georgia/Virginia, Port of Miami Terminal Operating Company (Pomtoc)/South Florida Container Terminal (SFCT), to name a few—the Northwest Seaport Alliance, formed by the ports of Seattle and Tacoma, offers a good example of the possible advantages of such a union.
The two ports, located 30 miles apart, worked to strengthen the Puget Sound gateway and attract more cargo by unifying their marine cargo terminal investments, operations, planning and marketing. They had been losing trade to ports in Mexico and Canada, but through their cooperative efforts, they’ve been able to turn that around. In fact, the combined ports now form the fourth-largest container gateway between Asia and several major distribution points in the U.S.
“The alliance allows us to leverage the strategic investments we make,” said Tara Mattina, communications director for the alliance.
Becoming port partners isn’t without stumbling blocks that include issues related to governance, stakeholder concerns, and anti-trust. But the success of the Northwest Seaport Alliance illustrates potential advantages for an industry that, due to new shipping alliances, finds itself in the midst of a sea change.