Truck and rail alternatives give ship operators more leverage in bargaining with ports. Resnick of the Los Angeles port said: "Steamship lines now find themselves in a very strong position vis-a-vis ports. Ports now have to solicit that business very strongly and compete for that business. You have to ensure that a steamship line is very happy and comfortable in your port because it has many opportunities . . . (that it) didn't have five years ago."
One of the most significant signs of increased competition among ports is the relocation of steamship lines from one port to another. "That has real monetary impact on a port," said Anthony E. Shotwell, manager of market research at the Port of Long Beach. "In Long Beach, we've seen a few of our lines move to L.A., in part because we were unable to accommodate their growth. They have more land there."
Not surprisingly, West Coast ports are evolving into aggressive marketers. They are all expected to continue to grow, but Los Angeles, Long Beach and the ports of Seattle and Portland are expected to flourish at the expense of Oakland and San Francisco.
In short, ports are going after each other's business in a way they never have before.
Seek to Siphon Business
For example, Los Angeles and Long Beach, where imports have been emphasized because of Southern California's huge consumer base, hope to enlarge that side of the trade even further by siphoning off some of the Northwest's business on imports bound for the Midwest and East. And they are out to capture some of Oakland's traditional export business.
Meanwhile, Seattle is undaunted by the Southern California competition. "Not until two years ago did Los Angeles and Long Beach begin to look at Midwest and Eastern business," Dwyer said. "Los Angeles' and Long Beach's success has been by default. They merely followed the growth of population."
Seattle, with a surrounding population of only 3 million, compared to 12 million in the Los Angeles-Long Beach region, has had to be more innovative to survive. It has carved a niche as a transshipment point to the East and was the first West Coast port to build a container terminal. About 80% of all cargo passing through Seattle and Tacoma ends up east of the Rockies.
Seattle also has developed some innovative marketing packages, including an annual $30-million advance payment program that prepays freight charges for small Midwestern shippers who consolidate shipments in containers that go through Seattle's port.
Oakland may stand to lose the most in terms of future growth. With ships cutting back on port calls, and the Northwest and Southern California ports aggressively going after its export business, Oakland is vulnerable.
Already, Seattle officials proudly boast of having wooed away much of Oakland's exports of Tennessee cotton. But Oakland port officials, responding to the new era's heightened competition, say they plan to try to recapture lost business and to seek new shipping by developing warehousing facilities nearby and further developing its regional markets.