$10 Million Complaint Says Port `Forced Out' Competition

The Port of Seattle and Stevedoring Services of America together eliminated SSA's only marine terminal competitor from the waterfront, according to a $10 million complaint.

The competitor, Seacon Terminals Inc., has filed a complaint with the Federal Maritime Commission, charging the port with various violations of the 1984 Shipping Act.

The complaint asks the commission to order the port to pay damages to Seacon, which described the port as acting ``so that SSA increased its monopoly and dominance'' on Seattle's waterfront. The complaint does not ask for damages from SSA.

The complaint says the departure of Seacon left SSA as ``the only independent public container terminal operator remaining in the Port of Seattle. That is to say, its terminal is open to any vessel requiring vessel stevedoring services . . . (SSA) dominates and monopolizes terminal, stevedoring and other maritime activities in the Port of Seattle.'' Many ocean carriers operate their own terminals.

The port's lawyer could not be reached for comment on the case.

Jon Hemingway, SSA's senior vice president, reviewed the complaint and declined to discuss charges made by Seacon.

``About the only comment we can make at this time is, we do not agree with the assertions contained in the complaint,'' Hemingway said. Mel Barkan, an attorney with the New York law firm representing Seacon, said he would not comment.

No hearing has been set in the case.

SSA, a private company, is a major employer of Seattle longshoremen and is a lessee or operator of four container terminals, according to port records. SSA is a major contributor to port commission candidates and at times employs Commissioner Jack Block, a longshoreman. SSA is said to control about 30 percent of the West Coast market at 42 ports; the company last year purchased Carolina Shipping Co., which serves six Southwest cities.

According to the complaint, Seacon's predecessor corporation, Seattle Terminals Division of Kerr Steamship Co. Inc., obtained a lease from the port to operate Terminal 46/47 in 1971.

In 1981, the port requested that Seacon move operations south to Terminal 25, which is across the East Waterway from Terminal 18, SSA's primary location. The port and Seacon signed a lease for 23 acres of the terminal's 41 acres and for berths and cranes, the complaint says.

Under the lease, the port promised that Seacon's rates would be at least as favorable as those for all other terminal tenants; the port agreed to notify Seacon if it was entering into any leases that were better than Seacon's terms, the complaint says.

Seacon bid against SSA and was able to serve some of the harbor's biggest shipping lines, including K-Line, Evergreen, Mitsui and others. Evergreen shifted from Seacon to SSA in 1983.

During 1986 and 1987, as Seacon continued to negotiate a new lease for Terminal 25, Seacon obtained a commitment from Neptune Orient Lines (NOL) of Singapore to use the terminal. But the port and SSA ``sought to dissuade NOL from entering into the proposed arrangement with Seacon,'' the complaint says, adding that the port told Seacon customers that the company would lose its lease at Terminal 25, the complaint says.

According to the complaint, the port told Seacon that it was assigning the terminal to Matson Lines although Matson had not yet agreed to the move and later had to be compensated for its move from Terminal 18. SSA wanted to expand at Terminal 18 and ``SSA's alleged need for space was the pretext for relocation of Matson to T-25 and the exclusion of Seacon from the Port of Seattle.''

The complaint also says that in 1987 the port built at Terminal 18 an on-dock rail facility. The stated rationale was that no railroad was closer than 1.5 miles from any port terminal. The port disregarded the fact that Terminal 25 was 600 yards from the Union Pacific Railroad and 300 yards from the Burlington Northern Railroad, the complaint says. Seacon's close access to railroads had been a major selling point in bringing customers to Terminal 25.

During Seacon's tenancy at Terminal 25, SSA was able to get discounted rates at Terminal 18 that were below what Seacon was paying, the complaint says.

The port refused to continue leasing Terminal 25 or any other terminal to Seacon and refused to provide NOL with space for its own terminal, thus ``forcing it to remain as SSA's customer,'' the complaint said.

Following a notice from the port to vacate the premises, Seacon left Terminal 25 in August of 1988 and ``for all practical purposes was forced out of business,'' it said.