Seattle's Port Loses Biggest Customer -- Blow Called More Symbolic Than Economic
Seattle Times Business Reporter
The Port of Seattle was dealt a blow yesterday when its biggest customer, Hyundai Merchant Marine, announced it intends to jump ship to the rival Port of Tacoma.
The loss of Hyundai, the Port of Seattle's largest container shipping line, means the two Puget Sound ports will handle virtually the same number of shipping containers. Hyundai moved about 200,000 of the 1.5 million containers that came through Seattle last year.
"It's a significant portion of our business," said Steve Sewell, marine-division operator for the Port of Seattle. Container business brings in about one-third of the revenue of the Port's marine division.
But the move itself is more a symbolic blow to Seattle than a financial one, port officials in both cities said.
The move will not take place for at least 18 months, since the Port of Tacoma has not completed construction of its new $65 million West Blair terminal. By that time, the Port of Seattle expects to have attracted an additional 150,000 container units, which will soften the blow from this loss, Port officials said.
The Port of Seattle also will not lose any lease revenue, Sewell said. That's because the Port has not been leasing the 40-acre site directly to Hyundai but to Stevedoring Services of America, whose lease runs through 2004.
"(Hyundai) is a tenant of a tenant, and we will continue to have a lease with Stevedoring," Sewell said.
For Hyundai, the biggest attraction of Tacoma was more space. The 50-acre West Blair terminal can be expanded to 100 acres, and it has important railway connections at the site. Hyundai will also hold a direct lease on the property, unlike at its 40-acre site at Harbor Island's Terminal 18.
The Port of Tacoma lured its largest container shipping line, Sea-Land, from Seattle in 1985. Evergreen and "K" Line, two more shippers, followed over the next six years.
But Pat O'Malley, a Port of Tacoma commissioner, said Hyundai's move should not be seen as a rival's victory.
"Unfortunately, in some of the deals that have been done, it becomes a matter of local pride, (when) the first thing that (truly) matters is return on investment," O'Malley said.
John Terpstra, Port of Tacoma executive director, agreed.
"This is not a win-lose situation," he said. "I think it's good news for Puget Sound."
Hyundai's move will bring 425 maritime jobs to Tacoma.
Information from Seattle Times business reporters Leyla Kokmen and Paul Lim is included in this report.
Copyright (c) 1996 Seattle Times Company, All Rights Reserved.