Tacoma fears death by Panama and useless bond issue

THERE are fears the US$5.25 billion Panama Canal project scheduled for completion in 2014 will take business away from US west coast ports and the Burlington Northern Santa Fe (BNSF) railway the Port of Tacoma depend on.

This is because it costs up to $1,000 more per container to use trains rather than ships to ship cargo east where consumers live in great numbers, according to Lee Sokje, a shipbuilding analyst at Mirae Asset Securities in Seoul, reported the Tacoma News Tribune.


But times are changing after logistics company American Fast Freight, which opened a new 7,400-square-metres building in January and moves cargo to Alaska, Hawaii, Guam and Puerto Rico, had leased property in the Tideflats from the Port of Tacoma, but moved to make way for the port`s plans to build container terminals on the Blair Waterway, plans which have since been cancelled.


As it stands, unless officials can reach agreement with banks to do otherwise, the port faces the prospect of issuing $230 million worth to finance a container terminal no one plans to build. As a result, the port is looking at the bleak prospect of paying banks more than $24 million to extricate itself from the soured deal.


The port is forecasting a net income of $20.7 million for 2010, according to David Morrison, the port`s director of financial planning and treasurer. That is $200,000 less than the 2010 budget projected, but a huge improvement on its 2009 loss of $23.2 million.


That red ink was attributed to a $22.3 million write down for development and planning costs for a terminal project that the port cancelled. The terminal project on the Blair Hylebos Peninsula was halted partway through development, when trade volumes plummeted worldwide.


The port`s "once white-hot container import business has cooled to tepid," the report said, pointing out that NYK Line, the carrier that spurred the port`s land acquisitions, has backed out of a contract to lease a terminal on the Blair-Hylebos Peninsula and decided to load its ships at a vacant one.