After years of debate on whether the ports of Seattle and Tacoma should merge, port officials announced today they have formed a single Seaport Alliance. According to the Seattle Post Intelligencer, “The Seaport Alliance will manage marine cargo terminal investments plus marketing, planning and operations, while existing government structures, taxing authority and ownership of assets remain in place.”
The merger should make the ports more competitive. Over the past few decades, Puget Sound ports have continued to lose market share.
In 1990, Puget Sound ports processed about 26% of all container traffic on the West Coast of the United States. In 2013, their market share has fallen to 15%. In 1990, Puget Sound ports processed about 24% of all container traffic on the Pacific Coast of North America. In 2013, their market share has fallen to 12%.
Washington Policy Center made the case for a single port authority back in 2009. In the private sector, competing companies will often merge to take advantage of lower costs and to improve market share. This allows the larger, merged company to become much more competitive. With the new Seaport Alliance, the ports could take advantage of economies of scale to reduce costs and make the Puget Sound more attractive to shippers.