The Sea-Land Patriot edged into its new berth at the Port of Tacoma filled with cargo from the Far East. Two giant cranes and smaller lifts transferred the cargo to a train just yards away. And as the train chugged away toward Chicago and the East, it was carrying more than electronics and textiles: It was helping pull Tacoma into new prominence as one of the fastest-growing and most efficient shipping centers in the world.
Two years ago, Tacoma was a depressed city of 160,000, largely dependent on the forest-products industry and two military bases for its economic well-being. Its port, while situated on one of the deepest harbors in the world, was underused and relatively obscure -- a vast contrast to Seattle 38 miles to the north, which had grown to the second-biggest port on the continent behind New York.
Now, the shifting tide of fate -- as well as lots of money, planning and chutzpah -- has Tacoma jubilant and challenging Seattle's dominance over the booming Asian and Alaskan trade. The turning point was the decision by Sea-Land -- the No. 1 ocean carrier and mover of containerized cargo in the United States and one of the biggest in the world -- to move its home base in the Pacific Northwest from Seattle to Tacoma.
A new $31.5 million facility built by the port for Sea-Land Services Inc. -- and dedicated last month -- has made Tacoma "a shipper's Mecca," says Larry Killeen, the port's executive director, with a touch of hyperbole.
Adds Tacoma Mayor Doug Sutherland: "Where once we were in the upper left-hand corner of the country , about as far away from anything as you can get, Tacoma is now smack dab in the middle of a global economy."
Tacoma's growth -- it is expected to jump from 16th to sixth place among North American ports by 1986 -- has come largely at the expense of Seattle. Sea-Land had been Seattle's largest customer, giving it 40 percent of the Alaska trade. That business, in turn, helped make Seattle -- with 1.05 million 20-foot containers handled last year -- the eighth-biggest container port in the world, and 10 times the size of Tacoma.
That Tacoma has bested Seattle for once -- luring away its largest client -- has been cause for celebration in this city, which nurses a decades-old inferiority complex to its neighbor to the north on the Puget Sound. Killeen's view is typical: "Seattle is starting to get nervous," he contends. "I think people are starting to notice that we can play in the big leagues."
But Seattle port officials play down the rivalry, warning against "parochial pride." They say Tacoma's growth is good for the Northwest as a whole, and that the time may be right for the creation of a regional port. Seattle "is not running scared," asserts James D. Dwyer, that port's new executive director. "I think what Tacoma is experiencing for the first time is entry into a competitive environment. They've never been in the environment before. We've been in it since the mid-'60s."
Shipping officials say Tacoma's emergence is noteworthy because it signals a number of important trends in the industry.
The most noticeable, perhaps, is the growth of trade with the Far East. In 1980, for the first time, the volume of trade between the United States and Asia surpassed that of the United States and Europe, and by 1983 that margin had grown to 24 percent, according to Commerce Department figures.
A second factor is "intermodality," the ability to transfer cargo from ships to trains as quickly as possible -- a key to success for modern shippers, who count profits with a minute and hour hand instead of a calculator.
Tacoma's two new intermodal rail yards -- one specially built for Sea-Land, the other a recently expanded smaller facility that the port operates -- are among the most advanced in North America because train tracks come up almost to the docks themselves, industry officials agree. The new tracks also can accommodate ultramodern double-stack trains, in which 40-foot containers ride piggyback, one atop another, providing twice the capacity of older, single-stack cars. Finally, Tacoma has installed huge cranes capable of unloading larger ships more quickly than older equipment and giant "parking lots" for the metal boxes. Tacoma spent about $50 million in port-generated revenue over two years to make these and other improvements.
By comparison, at most ports containerized cargo must be hauled by tractor-trailer over major roads to train yards, often miles away. At Los Angeles-Long Beach, train yards are more than 25 miles from the docks, and until very recently Seattle's main rail facilities were about 10 miles south of the port, in the town of Tukwila near the Seattle-Tacoma International Airport. (Los Angeles-Long Beach and Seattle are modernizing their intermodal yards in line with Tacoma. Seattle's new $32 million Burlington Northern line will be just 200 to 300 yards from some docks.)
Advanced intermodal facilities have become increasingly vital since the deregulation of the shipping, trucking and rail industries. To cut costs, the bigger ships of today make fewer stops than vessels did a decade ago, and the major ports have become "load centers" at which cargo is unloaded and then transferred inland, or to other ports.
With the new intermodal yards and double-stack trains, "we have become a major load center" for the Midwest and the East "literally overnight," says Blaine Johnson, director of port relations for the Port of Tacoma.
Until Sea-Land came to Tacoma, the port's containerized cargo facilities were quite limited, Johnson says. "Sea-Land gave us the nudge we needed," he says.
Port officials estimate that Tacoma will handle 570,000 20-foot containers a year from the Orient by 1986, up from 150,293 in 1984. Eighty percent of that cargo -- including electronics, automobiles, toys, grain and crude rubber -- will move inland, and much of the rest to Alaska. According to shipping industry figures, the new business will push Tacoma past Baltimore as the sixth-biggest port on the continent in terms of number of containers handled, and well ahead of No. 13 Norfolk-Hampton Roads.
(In fact, industry observers say the new intermodal yards and double-stack trains probably will help Tacoma and Seattle divert business from eastern ports, including Baltimore, as it becomes more economical to ship cargo by train from the West than to make additional port calls in the East. The U.S. Maritime Administration reports that the piggyback trains allow steamship lines to move twice the cargo at two-thirds the cost of single-stack trains.)
But Johnson says "Sea-Land might have remained a fluke", were it not for Maersk Line Ltd., a well-regarded Danish shipper that chose Tacoma over Seattle this spring as its base in the Puget Sound.
"To us, the ship has to be on time and the train has to be on time," says Jens Klinner, who oversees Maersk's Puget Sound operations. "That's what we build our reputation on for service."
At Seattle, Maersk would have had to share crane, dock and train facilities with more than 20 other companies that regularly use the port, whereas Tacoma officials helped Maersk find and lease their own 25-acre site. The port spent about $1.35 million to enlarge a dockside intermodal yard that Maersk uses. "Would you rather have an exclusive rail spur or one you share with many other lines?" Klinner asks. In Tacoma, he adds, "We can maintain our schedules." Maersk plans to ship 40,000 to 60,000 20-foot containers through Tacoma this year.
Tacoma's emergence is largely a matter of luck and timing, observers agree. The growth of trade with the Far East, for example, means more shipping companies are looking for facilities in West Coast ports. Puget Sound ports have a day's advantage in distance to Asian ports over San Francisco and Oakland, and one and a half days' advantage over Los Angeles and Long Beach, Calif., according to industry figures.
The port authority also is fortunate to own about 2,400 acres -- one-third undeveloped -- adjacent to Commencement Bay. "The real estate here is a dream," says Killeen, who was the Port of Seattle's real estate director before coming to Tacoma last year.
In April, the Commerce Department approved Tacoma's application to designate a total of 638 of those acres as a foreign trade zone, the largest in the West. (The designation means importers can bring in materials or subassemblies from overseas, make them into other products here and not pay customs duties until they leave the zones.)
The land and foreign trade zone give the port the flexibility to tailor facilities to carriers' needs. Sea-Land, for example, already has asked to grow from 76 to 86 acres by Sept. 1 and to 150 acres by next year.
"Seattle owns lots of real estate, and the Port of Seattle also controls the airport, but there is not a lot of vacant land," Killeen says. In Seattle, "a water-front hotel on a square-foot basis would be much more valuable than a warehouse."
Finally, Tacoma has suffered a number of plant closings in recent years and is desperate for jobs in "clean" industries -- which Sutherland says makes the city "willing to be entrepreneurial" and "particularly friendly to new businesses." In 1981, when the Port of Seattle said it planned to double the rent on Sea-Land's facilities there, Tacoma officials say they began wooing the carrier, offering to build it the most sophisticated intermodal yard on the West Coast for about the same rent it was paying in Seattle. (Sea-Land says its move will bring about 2,000 jobs to Tacoma.)
However, Jack Helton, vice president of Alaska operations for Sea-Land in Tacoma, denies that Tacoma "stole" his company's business from Seattle. "The aggressiveness was totally on our part," he says. "We decided we wanted to go with intermodality in a big way, and we asked them to submit a proposal . . . " Tacoma's huge land base was the key attraction, he adds. "Had we stayed in Seattle, we could have accomplished our acreage needs, but the yard couldn't have been designed as well because of the rail restrictions," he says.
Seattle officials point out that since Sea-Land set its deal with Tacoma in 1982, Seattle has signed four new big companies of its own, including Evergreen Marine Corp. Ltd. and, earlier this month, the China Ocean Shipping Co.
"Yes, Tacoma is one of the fastest-growing ports in the land, by virtue of Sea-Land alone, but we're still twice as big," says Bill Anschuetz, a Port of Seattle spokesman. "Yes, they have 800 acres of land, but that doesn't mean Seattle doesn't have lots of land it can develop, too."
Seattle officials say companies are attracted by the kinds of services the Port of Seattle has long offered -- including highly sophisticated data processing and computer services that allow companies to track cargo instantaneously, consolidation services that let small shippers and importers take advantage of volume discounts, and a $20-million-a-year prepayment program that essentially lets shippers borrow money from the port.
Dwyer agrees that Tacoma's undeveloped land is an important plus, but points out that much of it is tied up in title claims with native Indians. The Puyallup Indian tribe last fall filed suit in federal court against Tacoma, laying claim to much of the land in the downtown redevelopment area, including some of the Port of Tacoma's land and part of the property onto which Sea-Land would like to expand. City officials say the settlement, expected soon, probably will exceed $40 million.
Tacoma port officials, furthermore, concede that environmental issues involved with dredging Commencement Bay could create another serious impediment to growth.
The attitude of Tacoma port officials has galled Seattle executives, who say their rivals are not playing fair, trying to lure away other Seattle customers besides Sea-Land.
Dwyer insists Tacoma is focusing on the wrong issue -- that instead of competing with Seattle, the two ports should be banding together under a regional pact to compete with California ports, which soon will have their own improved intermodal yards. Those ports still have an edge over ones in the Puget Sound because of their much larger populations nearby that can consume goods shipped back from the East and Midwest. Containers shipped back to Seattle or Tacoma, by contrast, often are empty.
"I think we ought to be a regional port," Dwyer says, "but every time I open my mouth, it sets it back a year." Tacoma officials, feeling their new power, refuse to discuss the concept. Competition "keeps the pencils sharp in both areas," Sutherland says. CAPTION: Picture 1, Sea-Land's new $3 million terminal opened at the Port of Tacoma on May 12. Adjacent to it is the intermodal yard. PORT OF TACOMA; Picture 2, A mixture of old and new dock equipment crowds the rapidly expanding Tacoma facility. BY JERRY GAY FOR THE WASHINGTON POST; Map, Seattle-Tacoma. By Brad Wye -- The Washington Post