Puget Sound feels Alaska trade pinch

TACOMA – Trade with Alaska has always been steady and predictable business for Puget Sound ports and companies specializing in sending cargo to the 49th state. While international imports and exports have been more prone to dramatic ups and downs, the Alaska trade has chugged along, typically growing by a few percentage points each year.

But in this recession, even the reliable is vulnerable.

The ports of Seattle and Tacoma both reported drops in their Alaska business this year and local trucking companies, shipping lines and freight forwarders are also reporting declining volumes.

Trade with Alaska is big business in the Puget Sound.

The state is the Port of Tacoma’s third largest trading partner behind China and Japan, with $3.5 billion worth of mostly northbound goods shipped out of the port last year. Most of those goods are consumable items – everything from groceries to lumber – headed for store shelves in Anchorage and beyond.

Because much of the trade revolves around consumer necessities, business is fairly stable. In the past decade, the biggest spike in Alaska cargo volume going through the Port of Tacoma was 4 percent and the largest drop was just more than 2 percent.

But this year the port is reporting a 9 percent drop in its domestic container volume, which represents Alaska cargo, though includes a small volume of containers headed to Hawaii. The Port of Seattle domestic container volume is down 10.5 percent

Bill Deaver, president of Totem Ocean Trailer Express, said his company is feeling the effects of the softening Alaska market. The Federal Way-based shipping company known as TOTE sends cargo to Alaska from its terminal in Tacoma’s Tideflats.

“The state of Alaska has taken a downturn and northbound volumes are off by (12 percent),” Deaver said. “That’s unprecedented for us.”

Two TOTE ships leave Tacoma each week. Their cargo includes trailers loaded with items for Alaska’s retailers and cars and trucks destined for the state’s auto dealerships.

The latter has taken an especially large dip, with the number of vehicles headed to Alaska on TOTE boats down by about 35 percent from an annual average of 25,000, Deaver said.

The business decline has TOTE cutting back on expenses, though the company hasn’t laid off any of 140 employees and has no plans to scale back its services.

“We can’t cut back on service levels because the state depends on us,” Deaver said.