Port trying to lure new customers, appease old

10/02/2000

Al Gibbs; The News Tribune

Keeping existing customers happy while ardently wooing new ones isn't exactly a revolutionary business model. But it's clearly the plan the Port of Tacoma intends to follow next year.

From its biggest container terminal customers to its least significant industrial tenants, the port hopes to do everything it needs to do to keep from losing any customers.

At the same time, preparing to handle anybody new who might come along is nearly as high a priority - maybe higher - based on 2001 business strategies the heads of its various areas of interest have devised.

It won't be particularly easy for officials to achieve their goals, because many of the strategies contain interrelated influences, and because ocean shipping - the port's major source of revenue - is in a period of unprecedented growth and change.

And in some critical areas, the port doesn't control its own destiny.

Take the rail lines that run all over Tacoma's Tideflats, then head out for Chicago and other Midwest and East Coast markets, for example.

That's not as sexy a subject as landing a new container shipping line, but surely it's the object of intense focus because so much of the port's business depends on getting containerized cargo out of port terminals and headed east as rapidly as possible.

"There's about 30 percent excess capacity on the Northern Tier rail lines," said Jeannie Beckett, who's prepping to become the port's expert on intermodal transportation.

That's good news, because it means that once cargo gets to the main rail lines there's plenty of room to move.

Getting there, however, now there's the rub.

The port is spending millions of dollars to add track on the Tideflats, where congestion has been rampant.

"If we can move (trains) out of here, there is capacity," Beckett said.

There's also a bottleneck about 2,000 miles east of here - the switching yards of Chicago - and the port has no role in fixing that major problem in maintaining speedy transport of time-sensitive cargo.

The two main Northern Tier railroads, Burlington Northern Santa Fe and Union Pacific, are looking for some way to ease the congestion, but a cure probably won't happen soon.

Then there's the question of shipping lines and customers who use rail.

"K" Line and its partner, Cho Yang, have now ordered 19 new large containerships. Those ships will cause a traffic jam at the entrance to Sitcum Waterway once they begin arriving. And the terminal where they call is becoming too small for the volume of containers it must handle.

But across the port's central peninsula lies the Evergreen America Inc. terminal, and it's expanding, too.

On the other side of the Sitcum, Maersk, the Danish container line, is in growth mode with some of the biggest containerships in the world.

Maersk's terminal also serves CSX Lines' domestic fleet that moves cargo to Alaska, at least for about the next four years, the term of its contract with Maersk.

Could the port develop Pierce County Terminal as a multiuser facility for both CSX and "K" Line? The port really, really, really wants to get containers into the terminal.

That's certainly under study, but the possibility's only a possibility until the lines start thinking out loud about their plans and desires, and shipping lines are notoriously close-mouthed. Also, the types of cargo shipped by "K" Line and CSX aren't particularly compatible.

Then there's the question of where to put car importer Auto Warehousing if Pierce County Terminal becomes a container terminal. Cars are a fair chunk of the port's revenues, and worth keeping around.

The port is also looking for land to purchase and develop for industrial as well as waterfront purposes.

Well, gosh, look at that mostly shut-down aluminum mill just across the road from the end of Blair Waterway and Pierce County Terminal.

The 100-acre plant is just about the oldest and least productive mill that Kaiser Aluminum and Chemical Corp. owns. Its production costs, mostly electricity, are high.

Kaiser can operate it profitably when electricity costs $20 or $25 a megawatt-hour, according to Pete Forsyth, Kaiser's Northwest vice president for external affairs. These days, however, even year-ahead contract power costs more than $90.

Forsyth won't say whether Kaiser might be willing to sell, but Bob DeWald, the port's senior director of industrial development and real estate, plans a visit to Kaiser headquarters in the coming weeks.

Those are just a few of the development issues the port faces next year. Most probably won't be solved during the 12 months of 2001. Studying some may even lead to other complications.

Illustrating once again that while the theory of keeping today's customers happy while seeking tomorrow's is simple, the practice is far harder.