Legislation being introduced by Washington state’s two U.S. senators to replace the Harbor Maintenance Tax with a new levy on U.S. containerized imports reflects a stark reality: Washington’s two container ports, Seattle and Tacoma, have for years been individually and collectively losing market share — mostly to Canadian west coast ports, where U.S.-bound containers aren’t assessed the HMT.
Port data collected by The Journal of Commerce shows clearly that while Seattle and Tacoma have lost no market share relative to U.S. West Coast ports, their market share in the Pacific Northwest, a region that includes the Canadian ports of Vancouver and Prince Rupert, has slipped significantly in recent years.
Seattle and Tacoma’s combined container market share of the region — which includes Seattle, Tacoma, Vancouver and Prince Rupert — slipped from 62.7 percent in 2007 to 52.2 percent in 2012. However, Seattle and Tacoma’s combined market share in relation just to U.S. West Coast ports — including Seattle, Tacoma, Portland, Oakland, Los Angles and Long Beach — was relatively steady, indeed actually growing slightly from 17.5 to 17.7 percent during the period from 2007 to 2012. That shows how the Canadian ports, particularly Prince Rupert, where 70 percent of imports are bound for U.S. destinations, are making significant inroads into the Pacific Northwest container import market. During this period, the total West Coast share of the Canadian west coast ports climbed from 9.5 percent to 13.9 percent.
The Maritime Goods Movement Act for the 21st Century would assess a fee on all containers that originate internationally, including those that arrive by rail or enter the country by truck, whether through Canada or Mexico. That would prevent importers from circumventing the Harbor Maintenance Tax, which is 0.125 percent of the value of the commercial cargo and is assessed directly on the cargo owner. The HMT is considered one factor, but not the only one, that has attracted shippers to use Prince Rupert. Others are transit time, given the Canadian port’s closer proximity to Asia along the Great Circle route traversed by ships en route to North America from Asia.