How the Port of Seattle is whittling away at supply chain backlogs

The Port of Seattle started unloading cargo ships at a brand new terminal this week. That will help with some of the region's current supply chain issues. But it won’t solve the whole problem.

The new Terminal 5 includes the biggest cranes on the West Coast. It’s capable of unloading the biggest ships.

“In the Port of Seattle, it’ll probably increase our total capacity by about 40%. So, yeah. It’s enormous,” says Port Commission President Ryan Calkins.

Terminal 5 is half open now, and will be fully open in two years.

People on the shores of Puget Sound may have noticed a decline in the number of cargo ships idling while they wait for a berth to unload at the port. At one point last year, as many as 12 were lined up. At time of publication, that number was down to three.

However, Port officials say it's an illusion to think that means the backup has gone away. Container ships have slowed their journey across the Pacific in order to spend less time waiting for a berth in the sound. So in a sense, the line now extends across the ocean.

Seattle’s port unloads over a million containers annually. The number's three million, when combined with the Port of Tacoma.

But the stores that order those goods are short on warehouse space. That's because they're having to order so far ahead of time now, to deal with the uncertainty of shipping times.

Even if they had space for them, once the containers arrive, stores are short on drivers and truck chassis to haul them away.

And so, containers full of goods, having crossed the ocean to reach consumers, have been piling up at the port, unable to make it the last few miles to the stores where they’ll be sold.

Also piling up are empty containers. Before the pandemic, imports and exports were balanced. TVs and furniture came in, agricultural products went out. But during the pandemic, Washington state is importing far more than it's exporting, so empty containers are piling up on this side of the ocean.

Cruise is out, cargo is in

One of the places full and empty containers are piling up is Terminal 46.

Before the pandemic, the port had big plans for T46, just south of downtown Seattle. The dream the Port Commission had at the time was for a new cruise terminal there that would drop visitors off near Pioneer Square.

The idea was controversial. Activists mobilized against it, drawing attention to the greenhouse gas emissions and other pollutants released by cruise ships. Businesses downtown spoke of how important cruise ship visitors are to their bottom line.

In the end, interest from cruise lines in building the cruise terminal was lower than expected, Calkins says. When cruises shut down in 2020 due to the pandemic, the T46 cruise terminal project was shelved indefinitely.

But official statements at the time left open the possibility that the idea could be revived when cruises returned.

Now, that door has been closed with more certainty. Calkins says in 2022, a new cruise terminal is no longer on the table.

Calkins explains how much the economics have changed. Before the pandemic, cruises were hot and cargo traffic was down.

“And so something like cruise looked promising because it would at least backfill some of the lost revenue from an empty terminal.”

But now, supply chain problems have made places to unload ships extremely valuable.

So, the port is giving the site of the proposed cruise terminal another look this year. By 2023, Calkins says cranes could be unloading cargo at the spot where the cruise terminal was once planned.

The Port of Seattle leases land to shipping companies, which bring cranes and other upgrades to its sites. Right now, Calkins says the port's negotiating with larger shipping lines, and also smaller independent lines, to see who wants to set up at T46. Until then, it makes a convenient dumping ground for full and empty shipping containers so the port doesn't get buried alive in them.

The Coast Guard is also looking at using part of it T46 to dock and service two new ice breakers.