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Tariffs start to bite in the pacific northwest

Terminal 18 in Seattle has abandoned night gates as export container volumes plummet.

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Tariffs start to bite in the pacific northwest

The Northwest Seaport Alliance (NWSA) is planning to suspend the night gate funding scheme at Terminal 18 in Seattle after SSA Terminals stopped running the service in response to falling demand.

 

Truck turn times are closely watched at US West Coast ports, where terminal operators regularly come under pressure to extend gate hours in peak periods. Predicting demand for off-peak gate hours is, however, a difficult process.

 

The NWSA notes that in peak season planing for 2019, BCOs representing both importers and exporters forecasted 3-5% growth in box volume for the upcoming peak season and “insisted on extended service hours at the international container terminal gates to ensure smooth, reliable service to the trucking community”

 

Off-peak shifts are expensive, and terminal operators typically request financial assistance from their port authority, or through an emissions reduction scheme, to operate extended hours. For Tacoma and Seattle the NWSA runs a “Gate Efficiency Program (GEP)” that provides up to US$2M to offset some of the cost of extended gate hours.

 

For 2019 SSAT Terminal 18 and Everport enrolled in the programme, but SSAT has now ceased operating night gates and wants to exit the GEP. A report to the NWSA stated: “Although volumes were anticipated to grow during the peak shipping season the ongoing tariff situation has impacted international trade. Year-over-year (YOY) loaded container volumes have declined in June and continue in July. Washington exports have been the hardest hit by the tariff battle. Full international exports declined YOY by 12.5% in June 2019 as compared to June 2018”.

 

The night gate operations at T-18 have been worse affected by the decline. “During the first three weeks of the programme daily gate transactions have averaged 116 during the off-hour gates. In comparison, an average of 3,500 transactions occurred each day on the regular day shift. Only 3.2% of the total daily transactions are occurring on the nightside. What is even more troubling is that of the 116 average night gate transactions, only 25% of those are full export loads, whilst the remaining 75% are empties. The night gates are wildly underutilised and are not being supported by the industry,” the NWSA report stated.

 

In response to the situation NWSA staff are seeking approval from the joint commission that manages the NWSA to suspend the night gate funding scheme at Terminal 18 until volume improves.

 

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