Chairman Cordero Addresses the Ocean Shipping & Trade Summit

Chairman Cordero delivered the keynote address at the annual Ocean Shipping & Trade Summit, co-sponsored by the Washington Council on International Trade and the Foster Pepper law firm, in Seattle, Washington, May 28, 2015.

The Summit focused on key issues in ocean shipping and international trade policy, and included discussion on an anticipated new agreement between the ports of Seattle and Tacoma – the so called “Northwest Seaport Alliance.”, This new agreement would represent a further commitment by the Ports of Seattle and Tacoma to maximize collaboration to address competitive challenges and further economic opportunities for the Pacific Northwest gateway. Under the contemplated agreement, the port commissions plan to unify management of the two ports’ marine cargo terminals and related functions, combining their respective strengths to address competitive challenges and create new economic opportunities. The Chairman also noted that the Alliance has the potential to address the rapidly increasing competitiveness of the Ports of Vancouver and Prince Rupert in British Columbia, Canada.

In early 2014, the Ports of Seattle and Tacoma also filed the Port of Seattle/Port of Tacoma Discussion Agreement. This Agreement provided a pathway for the ports to engage in formal collaboration to improve port productivity and the competitiveness of the Northwest region. The Chairman noted among the challenges faced by the ports, increased competition from ports across North America; congestion caused by shipping alliances; and addressing the needs of larger container ships were noteworthy. Chairman Cordero acknowledged the importance of the Puget Sound gateway as the third largest container gateway in North America and its economic significance to the Northwest region. The Agreement creates a joint effort between the Ports to address management/operational efficiencies, as well as costs at port container facilities to serve as a model for regional ports to explore opportunities for creative collaboration between normally competitive ports. He commended the Ports for taking the bold step towards working together for the greater good of the region.

Chairman Cordero noted that in Southern California, the Ports of Long Beach and Los Angeles recently moved forward with their own collaborative efforts. The San Pedro Bay Ports filed a similar discussion agreement in order to address operational related questions and maximize their joint efforts in the management of the Southern California port complex.

Chairman Cordero commented on the serious concern related to demurrage and other costs that negatively impact the American shipping community as a result of marine terminal congestion. On this note, the Chairman shared that the FMC continues to address the issue of congestion at our nation’s ports. During the fall of 2014, the Commission held a series of regional public forums in four regional gateways in the U.S. Last month, the FMC released the report on detention and demurrage: Rules, Rates, and Practices Relating to Detention, Demurrage, and Free Time for Containerized Imports and Exports Moving through Selected United States Ports, and is currently working on the next phase of the congestion study. The Chairman acknowledged that that American shippers have expressed their interest in the FMC taking action to address the claimed unfair and unreasonable costs incurred by importers and exporters as a result of congestion. The Chairman noted the Commission will consider all options moving forward.