Navigating the Future of PacNW Maritime

Pacific NW Maritime industry

In case you missed it, the Marine Exchange had a fantastic turnout for a software demo.

If you’re rolling your eyes right now (oh boy, more software), I’ll start by acknowledging that software may be eating the world, but this was much more valuable as a gathering to talk about what drives us and what problems we need to solve. It was the most candid conversation I’ve witnessed since starting with the Marine Exchange almost three years ago. Because of this, I am grateful, energized, and genuinely inspired. I want to extend a heartful thank you to everyone who gathered in our conference room and later on our rooftop. For everyone who followed up with me, I want to tell you that your message is loud and clear.

It does not serve us to shield the fact that the maritime industry in Washington state is struggling. The ship count is down, cargo loads have not recovered like nearly every other port in the US, and we’ve been experiencing a long slide downward for thirty years as we’ve voluntarily donned the yoke of fearful bureaucracy, stagnation, and under-investment. The Northwest Seaport Alliance is trailing with a negative 27% growth rate since 2006, measuring year-on-year container volume growth. Some lines of business are doing fine (cruise, RO/RO), but I look at the aggregate activity, and it’s clear that we’re in decline and lacking deep, sustaining investment.

Northwest Seaport Alliance growth chart
Source: Pacific Merchant Shipping Association. My goal is to help invert this graph.

The question is, what do we do about it? I think we start by acknowledging that we have entered silos that tend to ossify slowly amidst retraction almost without notice. There are systemic problems here that I believe are untangled only with collaboration and trust – so easy, right? Imagine going to work on Monday and having someone tell you our new strategy is collaboration and trust when what you really need is a bunch of trucks. Inverting this graph is a decision made by people energized by a mission. I believe in this.

No software can solve this unless the people involved are committed to sharing ideas and information vital to telling the whole story. What bothers me is that I genuinely believe that we’re best at this. I say this because I’ve been stationed in many places and seen many ports operate around the country, so I approach this as a relatively objective outsider.

Follow-up question: Do we want to do anything about it? If Harbor Island becomes a theme park in the next 20 years, we’ll have our answer. However, it’s a valid question.

Our geography should be a significant selling point, as should our access to innovation, abundant clean energy, and incredible safety record. We know how to do this right, yet the narrative seems to be that we need more regulation, restrictions, and oversight by people who lack a basic understanding of what it takes to bring a ship across an ocean and into port. I have been shocked by the power and influence of industry consultants and overseers who couldn’t tell me the difference between a dead cat and a dead reckoning.

Author, exuding maritime dominance.

I am desperate for us to be heard. We have a world-class story, and I don’t think it’s getting out comprehensively. The truth is that PacNW Maritime is the jewel of the industry. That may sound corny, but I believe it. It’s hard to watch it struggle when it could be such a potent driver of the future and provide so much for so many people, including jobs with purpose and dignity, while we fulfill the most pressing needs of our civilization.

I could continue, but I will stop as I risk waxing overly saccharine. Please know that the Marine Exchange is intimately connected to the success of this industry in a way that I don’t believe any other organization is. We’re not a national association – we live and die with WA Maritime. We’re not eyeing global moonshot schemes – we’re looking to our backyard for opportunity and incremental improvement. We’re not disruptors looking to pick through bones – we’re committed to growing the corpus for future generations. Our core is to make all of Washington state a maritime leader in the United States, believing that if we become more competitive, the entire world will benefit.

Here’s what I’m reading:

  1. Maritime Administration Strategic Plan 2022-2026. MARAD has an undeniably massive responsibility in the future of US Maritime. I hope that their modest near-term vision is fully supported.
  2. PMSA West Coast Trade Report, April 2024.The numbers don’t lie. Jordan Royer’s opinion piece in April’s Trade Report partially inspired this blog post.
  3. The Algebra of Wealth. Professor Scott Galloway’s new bestseller is accessible and personal but doesn’t shy away from more complex macroeconomic concepts that contextualize capitalism for a mass audience. Although it is intended for young people, my kids at home just rolled their eyes when they saw me reading it.

Here’s what I’m interested in right now:

  1. I’m figuring out how this differs from chatgpt and which Artificial Intelligence overlord I will eventually serve.
  2. Franklin on Apple TV. I watched the first episode using someone else’s login, which I’m sure Apple already knows. I like this trend of dramatic history — especially as Benjamin Franklin’s plight is essentially for maritime dominance.
  3. Midst Podcast. This podcast is a captivating space western (yes, that’s a thing) that hooked me almost immediately. I’m listening to the final season with my daughter and trying not to ruin it by pointing out how important reliable supply lines are within this intriguing science fiction realm.

Here’s what I’m doing:

  1. Planting tomatoes. Do I need more evidence that the PacNW sucks for growing tomatoes? We shall see. Also, the USDA zone map changed… thanks, climate change.
  2. Shopping for a mid-life crisis car. I’ve got it down to a Mercedes SL55 AMG or any affordable Porsche (yeah, right). I was initially gunning for a 1964 Ford Galaxie 500XL like I drove when I was 30, but is that too overtly midlife?
image credit: pinterest

I’m wishing you the very best and safest May ever.

— Patrick Gallagher

Build vs Buy, Decarbonization, and Maritime Day 2024

WA state ferry being towed

*This photo has been generated using artificial intelligence. While it may appear realistic, it is important to note that it was not captured by a human photographer.*

Buying Ships

Washington State Ferries should follow the Coast Guard’s lead and just buy a ferry (or 5). I’m referring to the Coast Guard’s plea to buy a commercially available icebreaker for $150 million. If it were up to the Coast Guard, this would’ve happened years ago as we’ve watched the heavy icebreaking capability erode slowly over time down at Pier 36. 

The level of urgency surrounding our lack of presence in the receding ice of the Arctic is now surpassing our level of commitment to lobbying for ship design and manufacturing dollars. Still, where there’s billions at stake, there’s a fight

But, alas — Politics. It’s not until we’re out of options that we loosen protectionist legislation. Looking at you, Jones Act.

  • PMSA West Coast Trade Report is out. Read the section on the export of recycled material. This is a “must read” for me and I always plan on at least an hour to absorb it. The short version for us is that the containerized cargo trade for the NW Seaport Alliance is down from 3.1 million TEUs a year ago to 2.7 million TEUs in November. This is below COVID numbers.
  • Port decarbonization buzz is everywhere. I attended 3 different discussions in the past week where this was a primary talking point.
  • Tug Escort Rulemaking workshop wrapped another session last week. I missed the last workshop but reviewed their timeline and finally read their public comments which closed last April. This isn’t over, but the major rub seems to be whether the increased tug traffic (emissions, noise, congestion) is worth the risk being bought down by the increased tug presence. Stay tuned.
  • Maritime Day is today! Members of the WA Maritime Federation will be engaging state legislators on a full spectrum of maritime-related policy and funding issues.
This is my first blog post, but it’s really just a way for me to keep track of top issues and what I’ve been paying attention to over the past two weeks. I realize some of my opinions or thoughts may not completely align with yours or your organization, but my goal is to simply provide some fact-based commentary and awareness that you may not get anywhere else.