MOL set to switch from Seattle to Tacoma
The friendly green alligator is packing up its bags in Seattle and moving across Puget Sound to Tacoma.
Japanese ocean carrier Mitsui O.S.K. Lines, one of Seattle's oldest container handling tenants, announced earlier this week that it would begin sending its alligator emblazoned containers through the nearby Port of Tacoma starting next month.
MOL traffic, currently about 4,000 TEU a week, now makes up about half of the volume moving through the Port of Seattle's Terminal 5, currently leased to an Eagle Marine Services, a subsidiary of Singapore-based ocean carrier APL.
Despite denials by the Port of Seattle and local labor officials, the move was reportedly prompted by MOL's frustration over delays in expansion of Seattle's Terminal 5 including the addition of an another berth and additional gantry cranes. Seattle officials spent more than $270 million expanding and renovating the 182-acre three-berth Terminal 5 in the late 1990s.
The move comes less than six months after Tacoma announced that it would be building a massive new facility for current Seattle tenant NYK Line. The $300 million 168-acre Tacoma terminal is set to be completed by 2012.
Labor officials in Puget Sound denied that expansion delays were the reason for the MOL move. International Longshore and Warehouse Union Local 19 President Herald Ugles told the Seattle Press-Intelligencer that the real reason for MOL's move was a matter of economics'the operator of the Tacoma terminal that lured MOL away, Washington United Terminals, simply undercut the rates of the Seattle APL terminal's operator Eagle Marine.
Ugles described the undercutting to the P-I as a 'race to the bottom,' adding that if Tacoma's WUT, run by Seoul, Korea-based Hyundai Merchant Marine, 'is going to be that cutthroat, how can we compete with that?'
Ironically, MOL is part of the New World Alliance, which includes both Hyundai and APL. Vessels from APL and Hyundai will still make regular weekly calls at Seattle's Terminal 5 carrying alliance containers including MOL's.
Port of Tacoma Commission President Dick Marzano admitted to the P-I that financial competition for the lowest rates is 'the nature of the business.'
However, Marzano added that it would make no sense for Tacoma facilities to undercut to such a point that it affected the bottom line. 'If we were not making a profit,' said Marzano, 'and undercutting rates to the point where we were not making a profit, then we would be out of a job.'
Tacoma officials said that they did not court MOL, but that the deal was directly negotiated between the ocean carrier and WUT. When it announced it's deal to move last summer, NYK Line said that it had planned to leave Puget Sound altogether if it had not been able to cut a deal with Tacoma.
MOL and NYK Line, along with Japanese ocean carrier 'K' Line, have all recently found a home at Tacoma after being early tenants of Seattle's burgeoning containerized facility developments in the 1960s.
Attracting additional business to backfill the losses to Tacoma will be a major focus for Seattle port officials during the coming year.
Port of Seattle President John Creighton hinted to the P-I that two major shipping lines may soon announce Seattle calls.