Rail investments keep cargo on track

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1 Port of Tacoma FALL 2013 portoftacoma.com Rail investments keep cargo on track Building the future IN THIS ISSUE Expanding trade connections Honoring peak performers Pacific Gateway FALL 2013 portoftacoma.com i

2 FROM THE COMMISSION Don Meyer, President, Port of Tacoma Commission Our focus remains sharp on improving our infrastructure and operations. We have been referred to as the Port of Chicago at times because of our deep and direct connections to the U.S. Midwest. Rail service is a key component of those connections. We work closely with the Class 1 railroads, BNSF Railway and Union Pacific Railroad, and Tacoma Rail, our switching service partner, to make sure the system can accommodate increasing cargo traveling between Tacoma and the Midwest. Learn more in this issue of the Pacific Gateway about what we re doing to improve capacity and operational efficiency in the Port industrial area. You ll also read about how we re staying ready for the larger ships entering the trans-pacific trade, as well as our expanded services to Australia, which cracked our top 10 trading partners last year. In this issue, we continue to introduce you to some of the people and customers who contribute to the state s economic and environmental sustainability. You ll hear about the investments customers and tenants made to earn a Port 2013 Summit Award at the Annual Breakfast. You ll also meet REI and Lineage Logistics, local businesses with a global reach just like your port. Finally, we have included a directory of transload warehouses and logistics service providers near our terminals that make the Kent and Puyallup valleys the secondlargest concentration of distribution centers on the West Coast, a strong competitive advantage for our region. As you can see, we continue to focus on the infrastructure and operations that will maintain our competitiveness in this challenging marketplace. Stay tuned for more to come. Don Meyer President, Port of Tacoma Commission

3 Port of Tacoma FALL News briefs 4 Strategic investments keep Tacoma big-ship ready The Port is prepared to handle the larger vessels and associated additional cargo being introduced into the trans-pacific trade. 6 Transforming the tideflats: Trevor Thornsley Meet the senior project manager who s led major redevelopment projects at the Port, including this fall s upgrade of Pier 3. 8 Full speed ahead Rail investments keep cargo on track, both through the Port industrial area and the broader regional system. 12 Summit Awards recognize outstanding customers, tenants Four companies were honored with the second annual awards at our Annual Breakfast. 14 Trade connections Lineage Logistics and REI are local, trade-related businesses that bring jobs to our community. 16 Stretching to meet customer needs Creative solutions devised by our maintenance team save money and keep our equipment and facilities running smoothly. 18 Expanded connections to Oceania New container services complement existing breakbulk services and strengthen our connection with Oceania. 19 Transload Warehouse and Distribution Center Guide 21 Port Calendar page 8 Commission Connie Bacon Don Johnson Dick Marzano Don Meyer Clare Petrich Chief executive officer John Wolfe Subscriptions and information Pacific Gateway is produced by the Port of Tacoma. Subscriptions are free by visiting com/publications. For information about articles in this edition or for permission to reproduce any portion of it, contact the Communications Department. Pacific Gateway 2013 Port of Tacoma Port of Tacoma P.O. Box 1837 Tacoma, WA Phone: portinfo@portoftacoma.com Like us on Facebook facebook.com/portoftacoma Follow us on Twitter twitter.com/portoftacoma On the cover Norm Kruse is a 36-year veteran of Tacoma Rail. The City of Tacoma-owned railroad provides switching and terminal service in the Port industrial area. photo by Brian DalBalcon 8M/9-13 Pacific Gateway FALL 2013 portoftacoma.com 1

4 NEWS BRIEFS K Line, with its distinctive red containers, celebrated its 25th anniversary at the Port of Tacoma in July. K Line marks 25 years calling Tacoma Japan-based Kawasaki Kisen Kaisha, Ltd. ( K Line) marked its 25th year of calling at Tacoma in July, making it our longest-calling international shipping line. The ocean carrier first berthed its ships at a 37-acre terminal on the Sitcum Waterway in It moved in 2005 to its present location, the 93-acre Husky Terminal on the Blair Waterway. While K Line originally sent two outbound trains of 40-plus rail cars each week to the Midwest and East Coast, it now departs six trains of 100 cars each week, plus an additional 125 or more to and from Portland, Ore. Tacoma reps to visit Alaska in October Given our strong business ties to Alaska, we plan again to join a delegation of Tacoma-Pierce County Chamber representatives and customers at the Alaska Chamber s Annual Fall Conference. The Oct. 15 conference will bring together business and political leaders to discuss issues of statewide importance to Alaska business. This trip complements a visit by the Alaska Chamber in May that included a tour of the Port of Tacoma and Alaska-related businesses, as well as a welcome address from Tacoma Mayor Marilyn Strickland. These regular contacts help strengthen the connections that have led to an estimated $3 billion a year in trade. Read more about our relationship with Alaska at Connie Bacon receives lifetime achievement award The World Trade Center (WTC) Tacoma honored Commissioner Connie Bacon with the Globe Award for Lifetime Achievement at the annual event Sept. 19. Bacon is only the second recipient of the lifetime achievement award; Washington Secretary of State Sam Reed received the first one last year. Port ranked highest on West Coast for ease of doing business The Port ranked second highest among West Coast ports for ease of doing business in Logistics Management s 2013 Quest for Quality Awards. Winners were selected by the magazine s readers the buyers of logistics and transportation services. The awards recognized 129 carriers, third-party logistic providers and ports. Readers evaluated ports using five criteria: ease of doing business, value, ocean carrier network, intermodal network, and equipment and operations. Tacoma ranked second in the West Coast port category and fifth overall among the 14 recognized North American ports. Port earns green supply chain honors for the fourth year in a row The Port s sustainability commitment earned us an Inbound Logistics Green Supply Chain Partner honor for the fourth year running. A member of the Port commission since 1997, Bacon is the former executive director of the WTC Tacoma and helped establish the prestigious awards program 20 years ago. She also served eight years as special assistant to former Washington Gov. Booth Gardner. 2 Pacific Gateway FALL 2013 portoftacoma.com

5 One of five U.S. ports selected, Tacoma was recognized for its efforts to reduce seaport-related air emissions through the Northwest Ports Clean Air Strategy, retrofit lighting to save energy, and find innovative solutions to manage stormwater runoff. The trade magazine honored 75 organizations from various sectors, including ports, trucking companies, railroads, shipping lines, freight forwarders and air cargo carriers. Foreign-Trade Zone #86 celebrates 30 years For more than 30 years, cargo owners have realized the benefits and costsavings provided through the Port s Foreign-Trade Zone #86 (FTZ), one of the largest and most successful on the U.S. West Coast. More than $2.1 billion in trade moved through the zone last year. Considered legally outside of the U.S. Customs territory, the zone allows importers and exporters a flexible way to ship, store and add value to goods while delaying, reducing or eliminating payment of Customs duties. FTZ #86 is structured under the Alternative Site Framework (ASF), which simplifies the process, reduces paperwork and allows any property located within Pierce County to be designated within 30 days. Learn more at Accolades Port-owned land FTZ Foreign-Trade Zone #86 (FTZ) includes parcels in the Port industrial area, near-terminal sites in neighboring cities and sub-zones in locations around the state. Totem Ocean Trailer Express, Inc. (TOTE) became the first U.S. company to take home Nor-Shipping s Next Generation Shipping Award for its Marlin Class of 3,100 TEU LNG-powered container ships. When completed in 2015, the vessels will be the world s first LNG-powered container ships. The Agriculture Transportation Coalition (AgTC) named APL the overall top-ranked ocean carrier for 2013 and recognized Orient Overseas Container Line (OOCL) for superior performance through the coalition s annual ocean carrier performance survey of agriculture and forest product shippers. The Horizon Lines vessel received the IHS Safety at Northwest ports set further diesel emission goals The ports of Tacoma, Seattle and Metro Vancouver, B.C., aim to reduce maritime-related diesel emissions 75 percent per ton of cargo by 2015 and 80 percent by The new goals are part of the 2013 update to the Northwest Ports Clean Air Strategy, a collaborative effort the three ports launched in 2007 to improve the region s air quality. The goals were developed based on the results of the 2011 Puget Sound Maritime Air Emissions Inventory released last fall. The inventory found maritimerelated air pollution has decreased since 2005, with much of the progress due to significant, voluntary investments of the maritime industry and government agencies in cleaner technology, cleaner fuels and more efficient systems of operation. Sea AMVER Award for the rescue of three sailors from a drifting yacht amid difficult conditions in February The Navy League of the United States honored Anthony Chiarello, president and CEO of TOTE, with the Vincent T. Hirsch Maritime Award for achievement in his more than 30-year career with maritime organizations and contributions to protecting and growing domestic trade. John Deere & Company recognized Wallenius Wilhelmsen Logistics as a 2012 partner-level supplier and inducted the carrier into its Achieving Excellence Program s Supplier Hall of Fame, an honor reserved for suppliers who attain a partner-level rating for five consecutive years. Pacific Gateway FALL 2013 portoftacoma.com 3

6 Strategic investments keep Tacoma big-ship ready Dominating the skyline over Commencement Bay, the ZIM Djibouti attracted attention from neighborhoods above the harbor. Even before it docked, it was obvious this ship was a bit different than others that call regularly at the Port of Tacoma. Heralding the larger ships cascading into service from the Asia-Europe trades to the trans-pacific, the ZIM Djibouti is the largest container ship ever to call at Tacoma. With a capacity of 10, foot equivalent container units (TEUs), the ZIM Djibouti is 1,145 feet long and 150 feet wide. Its length stretches almost twice the height of the Space Needle. It holds about 40 percent more cargo than most of the container ships that call at the Port. ZIM Integrated Shipping, based in Israel, began calling in Tacoma last July, when the Grand Alliance, a consortium of three of the world s largest shipping lines that includes Hapag-Lloyd (Germany), Orient Overseas Container Line (Hong Kong) and NYK Line ( Japan), relocated to Washington United Terminals. Washington United Terminals is a 110-acre container terminal on the Blair Waterway. The marine terminal features four post-panamax and two super-post-panamax cranes capable of handling the largest ships in the world, 51-foot water depth, on-dock rail and a berth measuring 2,600 feet. Ships continue to get larger, and we are ready for them, said John Wolfe, the Port s chief executive officer. We are fortunate to have naturally deep water, and we are investing in our terminals and road and rail infrastructure to handle more cargo and the associated super-post- Panamax ships and cranes. While most of the container ships that call in Tacoma remain in the 6,000- to 6,500-TEU range, shipping lines are introducing larger vessels into their service strings. Several 8,500-TEU ships call at Washington United Terminals, and the ZIM Ready to serve larger vessels At 1,145 feet long, the ZIM Djibouti is the largest container ship ever to call at Tacoma. Post Panamax (6,000 to 8,000 TEUs) Most ships calling Tacoma remain in the 6,000- to 6,500-TEU range, though several 8,500-TEU ships call at Washington United Terminals. Largest ship to call Tacoma slightly smaller than the New Panamax (1,200 feet). Maersk Triple E (18,000 TEUs) These vessels are currently too large for all U.S. ports and will serve the Asia to Europe trade. 4 Pacific Gateway FALL 2013 portoftacoma.com

7 Djibouti is expected to be a regular addition to the PNX trans-pacific service calling there. These larger ships reflect the trend of ocean carriers seeking further economies of scale. Maersk Line launched the first of its Triple E container ships from Asia to Europe in July. The Maersk Mc-Kinney Møller carries 18,000 container units. The Triple E ships are 1,312 feet long and 194 feet wide. China Shipping Container Lines announced this spring it has ordered five container ships with a capacity of 400 more containers than the Maersk ships. These mega-ships are expected to operate in the Asia-Europe trade, but the large ships currently in service there will cascade into the trans- Pacific trade over time. That s why the Port launched an ambitious strategic plan in 2012, calling for strategic investments in current facilities. Projects underway now to accommodate those larger ships when they arrive include: Adding 100-gauge crane rail to a pier at Husky Terminal to accommodate larger cranes. Redesigning the adjacent pier to align them so two of the world s largest ships can berth simultaneously. Designing rail improvements to add capacity to the Port industrial area and serve potential new facilities. Continuing work with a broad coalition of business, labor and environmental interests to complete State Route 167, which would provide the first/last mile between the Port and Kent and Puyallup valleys, home to the second-largest concentration of distribution centers on the West Coast. This summer, the Port also embarked on a simulation of piloting a 13,000-TEU ship through the Blair Waterway. During the simulation, pilots transited the ship through the waterway under a number of scenarios including such lessthan-ideal conditions as high winds, reduced visibility and system failures to assess the environmental conditions and resources needed to safely transit a vessel that size. The conclusion was that the Blair Waterway is ready to handle 13,000- TEU ships. The Port, pilots and tug and terminal operators will continue to work together to prepare for their arrival. We recognize how the industry is changing, and we focus on continual improvement to remain ahead of the trends, said Tong Zhu, the Port s chief commercial officer. We are committed to staying close to our customers to make sure we can provide them with the facilities and services they need to stay competitive. PG Members of International Longshore and Warehouse Union Local 23 tie up the at Washington United Terminals. Pacific Gateway FALL 2013 portoftacoma.com 5

8 Transforming the tideflats: Trevor Thornsley Through investments in our infrastructure, we ve reshaped our land and waterways of the Port industrial area over our 95-year history to meet the needs of a growing port. Our ambitious 10-year strategic plan sets the stage for further transformation. Trevor Thornsley and Stan Ryter are managing the $22.5 million upgrade to Pier 3. Much of the responsibility to bring those transformations to life falls to our 15-member engineering department. It s an exciting time to be at the Port because there is so much construction getting started, said Dakota Chamberlain, director of engineering. There s a tremendous amount of opportunity for the Port and for those of us who build things. Trevor Thornsley, senior project manager, definitely likes to build things. With nearly 14 years at the Port, he s one of the longest-standing members of our engineering staff, with extensive knowledge about designing and building port facilities. Chamberlain calls him 6 Pacific Gateway FALL 2013 portoftacoma.com

9 the department s encyclopedia. Thornsley is humble, with a good eye for detail and willingness to take on extra responsibilities, Chamberlain added. Thornsley joined the Port in 1999 following 13 years as a civil engineer designing sites for land developers. One of his first major Port projects was building the $40 million, 144-acre Marshall Avenue Auto Facility that opened in 2003, and the accompanying dedicated bridge over Port of Tacoma Road, completed in 2004, to link the Blair Terminal and auto facility. One of our core values at the Port is to be customer focused. When I m building something for a tenant, I keep them involved and engaged to make sure we give them what they want, he explained. Thornsley also managed the record four-month redevelopment of Terminal 4 for Husky Terminal in 2005 and led the engineering team in the eight-year project to complete the 2,200-foot Lincoln Avenue overpass. Opened in 2011, the bridge removed the at-grade conflict between road and rail. The Lincoln Avenue overpass means a lot to me because I stayed with the project through the whole process, he said. All projects are challenging, but the overpass was definitely rewarding to complete. It felt like we were accomplishing something significant for the Port. This fall, he ll mentor a newly hired project manager, Stan Ryter, through the $22.5 million upgrade to Pier 3 at Husky Terminal. Pier 3 upgrade at a glance Project: Upgrade pier to support 100-gauge container cranes Cost: $22.5 million Contractor: Orion Marine Contractors Start date: Fall 2013 Expected completion date: Fall 2014 The project is part of the larger vision to redevelop and expand the peninsula bounded by the Blair and Sitcum waterways into a highly efficient container terminal capable of handling the world s largest ships. Transforming the approximately 200 acres currently occupied by two container terminals, an intermodal rail yard and the Port s maintenance shop will take time and careful planning. The first phase will upgrade Pier 3 to support 100-gauge cranes capable of serving the larger vessels Tacoma expects to see in the future. We re doing the Pier 3 upgrade of our own accord, Thornsley said. It s not a lease commitment. There s no additional revenue generated as a result of it. It s just smart business to get ourselves ready for the future. Construction is set to begin this fall by removing about 15 feet of existing pier. Additional pilings will be placed along the pier s length to support heavier cranes, and 100-gauge crane rail will be installed on the rebuilt structure. A new electrical substation will be constructed to support the increased power demand of larger cranes. Construction is expected to be completed in fall of A completed Pier 3 prepares the Port to move forward with the reconfiguration of Pier 4. That project will take more time and money, as it requires demolishing most of the existing pier, cutting back the bank and constructing more than 1,700 feet of new pier. The redevelopment of the whole peninsula isn t going to be done overnight, Thornsley said. The trick is to figure out what we ultimately want the peninsula to look like so we build it smart. The investments we re making today will prepare the Port for the next 20 to 30 years and contribute to the continuing evolution of the Port industrial area. I m sure that five, 10 years after I ve left the Port, things that I ve built are going to be changed and it s going to look different down here, Thornsley said. But it s pretty cool to be part of the history of this place, and I m proud to be part of our continued progress. PG Pacific Gateway FALL 2013 portoftacoma.com 7

10 Full speed ahead Rail investments keep cargo on track Rail is an essential part of the journey for nearly all cargo traveling between the Pacific Northwest and markets around the globe. At the Port of Tacoma, about half of our cargo travels by rail to and from inland destinations. A container packed with Idahogrown lentils destined for Asia might float down the Columbia River on a barge to Portland, Ore. There, it s transferred to a heavy-duty rail car and moved overnight by Northwest Container Services to the Port and lifted onto a container ship. A tank car of crude oil pumped from the Bakken Formation in North Dakota may travel via BNSF Railway (BNSF) through Oregon to Tacoma, where it s received by U.S. Oil and Refining for use in the Puget Sound area. Or a load of auto parts from Chicago could journey from the U.S. Midwest via Union Pacific Railroad (UP). Upon arrival in Tacoma, the cargo might be interchanged to Tacoma Rail, our short line provider, and delivered to on-dock intermodal ramps at container terminals for loading on ships bound for Asia. In these examples and millions more, moving containers and freight cars from origin to destination over rail requires complex orchestration and constant communication among many players. Through Tacoma, BNSF and UP railroads provide connections to distribution points across North America. By partnering with regional and long-haul rail carriers, steamship lines, the trucking community and cargo owners, we move cargo efficiently and safely. We are planning strategic investments in the Port industrial area to meet growing cargo volumes, as well as collaborating with stakeholders to enhance the broader rail system serving the Puget Sound region and the nation. Close to home Rail, deeply rooted in Tacoma s past, remains integral to our current and future competitive and environmental advantages. Our rail infrastructure includes three arrival and departure tracks and four on- or near-dock intermodal yards for efficient transfer of containers between rail and marine terminals. One of the many advantages of on-dock rail, for example, is that heavyweight cargo leaving Portland moves by rail and never touches the road, said Mike Reilly, the Port s director of intermodal business development. By working with Northwest Container Services and the steamship lines that use their service, we have taken approximately 25,000 trucks off Interstate 5 and converted them to all-rail. Environmentally, it s the correct thing to do. And it saves the taxpayer money because it reduces wear and tear on the highway. 8 Pacific Gateway FALL 2013 portoftacoma.com

11 Improvements to freight rail infrastructure are generally designed to relieve bottlenecks and allow for longer trains. That s true of the investments planned for the 66 miles of Port-owned track. While we use only 50 percent of our rail capacity, we continue to plan for improvements to accommodate future demand. In the last few years, the Port has invested just over $12 million in our rail corridor. A third set of tracks was added at Bullfrog Junction, the Port s front door, to increase rail capacity and allow track maintenance work without impacting rail movements to and from Tacoma. This track is aligned for the planned construction of the north leg of the wye, a new set of tracks expected to save BNSF up to three hours for every train departing northbound. Investments have also been made at Chilcote Tacoma Rail s Scott Gordon throws a rail switch as his crew prepares to pull a train from the Port s North Intermodal Yard. Continued on page 10 Junction, allowing the Port to handle more trains with greater efficiency. Electronic rail switches were installed in 2011, saving westbound trains entering the Port 20 minutes and improving the velocity of the mainline. Paid for by the state, the Port, Tacoma Rail and the two major railroads, the electronic switches eliminate the need for a conductor to stop and get off the train 15 times to throw the switches manually. Looking to the future, two additional arrival and departure tracks are planned. The current arrival and departure tracks allow for trains up to 7,700 feet long. The new tracks currently in design will be the same length with the option of extending up to 10,000 feet to meet future needs. The Port is also designing two mile-long lead tracks to serve future developments on the Blair-Hylebos Peninsula. Pacific Gateway FALL 2013 portoftacoma.com 9

12 Continued from page 9 Facts & stats: Port of Tacoma rail facilities A heightened focus on passenger rail travel and its associated federal funding was the clear impetus for several rail infrastructure projects in the state. The Washington State Department of Transportation (WSDOT) coordinates with the region s passenger rail services and received federal grants for $800 million to invest in key projects benefiting both freight and passenger rail. A project on the corridor between Eugene, Ore., and Vancouver, B.C., aims to better adapt the BNSF-owned north-south tracks to safely handle high-speed passenger trains and add capacity to the route. Rail ties and rails are being upgraded or replaced to handle the faster, lighter passenger Three arrival and departure tracks Served by BNSF Railway and Union Pacific Railroad Tacoma Rail provides switching and terminal services Northwest Container Services offers short-haul between Portland and Seattle Union Pacific domestic intermodal service offers daily inbound and outbound trains trains (compared with freight), and a third main track will be added near Kelso, Wash. While the goal is to minimize delays for the faster-moving passenger trains, there are also direct benefits for freight, said Chris Herman, WSDOT freight rail policy and program manager. As an example, we don t have any passenger service in the overnight hours, so all of that capacity is then available to operate freight trains during that time, he explained. Another WSDOT project will allow passenger trains to bypass the BNSF mainline between Point Defiance in Tacoma and Nisqually near Olympia, Wash., again removing the conflict between passenger and freight rail and freeing freight capacity. The big picture When working with WSDOT to allocate federal funds, the Port and other regional stakeholders identified a chokepoint near the Port of Vancouver as one of their top New arrival and departure tracks North lead tracks 10 Pacific Gateway FALL portoftacoma.com SITE PLAN ALEX 1 PORT OF TACOMA NORTH LEAD RAIL IMPROVEMENTS Planned rail investments in the Port industrial area THIS DRAWING IS THE PROPERTY OF THE PORT OF TACOMA AND SHALL NOT BE USED ON OTHER WORK, DISCLOSED, COPIED, IN WHOLE OR IN PART, WITHOUT WRITTEN PERMISSION People power Four on- or near-dock rail yards PORT OF TACOMA P.O. BOX 1837 TACOMA, WA (253) Additionally, changes by BNSF will smooth the flow of rail traffic south of Tacoma. New sidings that allow a train to pull over temporarily so that a faster or higher-priority train can pass are in the process of being installed at key locations.

13 Ship domestic by rail through Tacoma The Port of Tacoma also offers domestic and short-haul rail service for shipping within the continental U.S. Union Pacific Railroad moved its domestic intermodal business to our South Intermodal Yard in Today, daily inbound and outbound trains connect Tacoma to the U.S. East Coast, Midwest and California. Straddle carriers move containers directly from vessel to rail in the Port s North Intermodal Yard, one of our four on- and near-dock yards. priorities. That project will build a set of bypass tracks to allow passenger trains to avoid the main line and reduce delays for freight traffic. We have to look at it as a rail system, not specifically rail for the Port of Tacoma or rail for the Port of Portland, Reilly said. And if you look at it from a system viewpoint, there are issues or impacts of a derailment or a slowdown of something outside of Montana that may negatively impact business coming in and out of the Port of Tacoma. It s a philosophy shared by WSDOT. Our goal when it comes to freight rail transportation within the state is really to ensure that we have capacity to manage the kind of growth that the state is looking for, Herman said. When Port of Tacoma is looking to grow and add jobs, and a lot of that growth may incorporate the need for rail transportation to and from the port, it s really in our best interest to ensure that we re looking at the transportation system as a whole, and that s inclusive of rail. The shared awareness that a transportation system is only as good as its weakest connection spurred the recent development of the Great Northern Corridor Coalition. This federally-funded collaboration includes the BNSF and other rail providers, ports and state and local governments from Washington and all along the route to Chicago. This group is going to look at that entire corridor to identify projects that will have similar impact as far as speeding freight, Herman said. A lot of the containers going inbound and outbound from our ports ultimately are destined on rail to Chicago.... Identifying any bottlenecks or areas where increased capacity is needed is important so that the ports ultimately can stay competitive in reaching the Chicago market. PG About 20 percent of import containers are transloaded into 53-foot domestic boxes for rail shipment to points inland. The inbound service brings products for consumption in the Pacific Northwest or transload and export to Asia. A plethora of transload service providers located near our terminals give cargo owners a variety of options. (Find a directory on page 19.) Meanwhile, short-haul rail provider Northwest Container Services (NWCS) transports 75,000 to 80,000 containers annually along the Portland-Tacoma-Seattle corridor overnight three times a week. The company s fleet of doublestack cars offers added security and scheduling flexibility. Containers move directly from train to vessel in Tacoma, saving money and creating efficiencies, said Art Scheunemann, senior vice president of business development at NWCS. The Port of Tacoma s been blessed with a lot of land, the support of the business community and local community in terms of the investments they ve made to create a bigger footprint for their business objectives, Scheunemann said. We re always pleased if the Port of Tacoma is successful because then we re successful. Pacific Gateway FALL 2013 portoftacoma.com 11

14 Summit Awards: Recognizing outstanding We honored our strong, supportive relationships with customers and tenants by recognizing four with the second annual Summit Awards for their contributions to Port business and the Pierce County community. Presented May 23 at our Annual Breakfast, the 2013 awards recognized three categories of leadership: Business Magnet for efforts and investments that led to a recognizable increase in business volume or new business opportunities, and have a positive economic effect for the citizens of Pierce County. Environmental Stewardship for a project, program or initiative that supported Pierce County s sustainability and honors biodiversity and the interconnected nature of industry, people, wildlife and natural systems. Livable Community for a project, program or initiative that demonstrated the business community s positive contribution to Pierce County through social responsibility. This year s nominees in the Business Magnet category were so strong, the selection committee decided to honor another nominee with a special fourth Business Investment award. We are so proud of the Port s many customers and tenants who understand that business, environmental stewardship and livable communities go hand in hand, said Commission President Don Meyer. Recipients were selected by a panel of community and business leaders led by Meyer. The panel included Tacoma Mayor Marilyn Strickland and Debbie Fischer of the Customs Brokers & International Freight Forwarders Association of Washington State. Nominate 2014 Summit Award recipients Submit your nominations for our 2014 Summit Awards by Feb. 13, Self nominations are welcome and encouraged. Find nomination forms online at Targa Sound Terminal Livable Community Targa Sound Terminal operates the largest renewable fuel facility in Washington state and plans to expand its operations to the former Kaiser Aluminum site on the east side of the Blair Waterway. Targa received the Livable Community Summit Award for its work with a variety of nonprofit organizations and commitment to the community. The company focuses its efforts on two main areas: Rebuilding Together South Sound and Tree House. Rebuilding Together South Sound helps elderly, disabled, military and low-income families stay in their homes by providing necessary home repairs at no cost. Tree House is MultiCare Health System s temporary housing complex designed to offer a place to stay for parents whose children are being treated at Mary Bridge Children s Hospital. In 2012, Targa s 47 employees donated nearly 1,000 hours in support of local charities, raising more than $100,000. Learn more about Targa at 12 Pacific Gateway FALL 2013 portoftacoma.com

15 customers and tenants Trident Seafoods Environmental Stewardship Trident Seafoods is an Alaska seafood harvester and processor with facilities throughout Washington, Oregon and Alaska. Trident Seafoods won the Environmental Stewardship Summit Award for installing an advanced stormwater treatment system to improve water quality in Commencement Bay. In developed areas like the Port, rainwater picks up soil, chemicals and other pollutants. If left untreated, these pollutants flow into our waterways. In Washington state, industrial facilities are required to meet stringent water quality benchmarks. Trident s system filters out particulates and such pollutants as zinc and copper without using chemicals. The above-ground system required limited construction at the company s facility in the Port industrial area. Learn more about Trident at Washington United Terminals Business Magnet Tacoma terminal operator Washington United Terminals (WUT) received the Business Magnet Summit Award for successfully attracting the business of the Grand Alliance shipping consortium in The alliance is made up of Hapag-Lloyd, Orient Overseas Container Line and NYK Line. ZIM, Hamburg Süd and U.S. Lines also call Tacoma through joint service agreements with carriers in the alliance. The new business has generated more than 1,000 direct new family-wage jobs and increased economic activity in our community. Increases have been notable in trucking, distribution and third-party supply chain services. The terminal also has increased rail volume by about 50,000 lifts, which helped support greater rail efficiency and intermodal yard use for all rail users in the Port industrial area. WUT invested more than $20 million in new and upgraded equipment to better serve the additional business. Learn more about the terminal at SAFE Boats Business Investment When it received a contract to build large patrol boats for the U.S. Navy, aluminum boat manufacturer SAFE Boats expanded to a larger facility at our Earley Business Center. SAFE Boats won the Business Investment Summit Award for investing its own money to upgrade the high-bay building. Investments included re-siding part of the building, installing gas service and heating for the warehouse, repairing fencing, installing new rolling doors large enough to accommodate the finished 80-foot patrol boats and installing new energy-efficient lighting. The site of naval shipbuilding during World War II, the Earley Business Center has a rich history of boat building. SAFE Boats has brought back this important industry, creating about 100 new jobs in Tacoma. It also has provided new business for other tenants in the Earley Business Center, as well as local marine suppliers, service providers and skilled fabricators. Learn more about SAFE Boats at PG Pacific Gateway FALL 2013 portoftacoma.com 13

16 Trade connections The importers, exporters and logistics service providers located near our terminals are responsible for the majority of the 43,000 Pierce County jobs connected to Port of Tacoma activities. We d like to introduce you to two. Lineage Logistics Tacoma (formerly SCS Refrigerated Services) Established: 2013 Location: Port industrial area, less than one mile from our terminals Services: Frozen and refrigerated warehousing and logistics Lineage Logistics expanded its capabilities in the Pacific Northwest with the April purchase of SCS Refrigerated Services facilities in the Port of Tacoma and Kent Valley. The 132,400-square-foot Tacoma building and 288,000-square-foot Algona, Wash., building complement two Seattle facilities already operated by the warehousing and logistics company. Lineage operates 69 facilities in 12 states with a combined footprint of more than 13 million square feet and capacity of 290 million cubic feet. It is the second largest refrigerated warehouse company in the world, according to the International Association of Refrigerated Warehouses. Located along the heavy-haul corridor, the Tacoma facility has always been advantageous because it is served by two major railroads, explained Ericka Garosi, director of customer operations. Garosi has worked at the facility for more than two decades, from its original debut as Mountain Cold Storage in 1989 through the purchase by Lineage. About 85 percent of Lineage Tacoma is frozen storage. While food products reign at most cold storage warehouses, the carbon fiber composite used to build airplanes is one of Tacoma s top commodities. It s an interesting business because you have to learn so much about so many different commodities and how they work, said Bonnie Geise, senior director of sales and marketing. Over time, you develop that expertise. It s that experience and regional knowledge Lineage banks on when it acquires new facilities. Most are family-owned with long, successful histories in regional markets. Lineage connects these smaller warehouses to a nationwide network, opening the door to new opportunities and providing access to experts in a variety of products and services. The four Washington facilities plan to achieve level two Safe Quality Foods (SQF) certification by the end of the year. The internationally-recognized program identifies suppliers with high food safety and quality standards who continually monitor and improve their processes. This certification will drive where retailers and customers store their product because they need to ensure that the quality and safety of the food along the entire supply chain is not compromised, Garosi said. 14 Pacific Gateway FALL 2013 portoftacoma.com

17 REI Established: 1938 Location: More than 130 stores in 33 states, headquartered in Kent, Wash. Product: Gear and apparel for camping, climbing, cycling, fitness, hiking, paddling and travel National outdoor gear and apparel retailer REI grew out of the simple need for a quality, reasonably-priced ice ax. Avid mountaineer Lloyd Anderson couldn t find any in the U.S., so he imported them from Austria for the bargain price of $3.50 each, including shipping. Anderson and his wife, Mary, formed the Seattle-based cooperative in 1938 with their climbing friends, importing outdoor gear and returning the profits to members. Seventy-five years later, REI has grown to more than 130 stores across the U.S. with nearly $2 billion in annual sales. It s the largest consumer cooperative in the U.S., boasting more than 5 million active members worldwide. The retail company has skillfully adapted to changes in the industry and consumer interests. REI has expanded its offerings to include cycling, camping, fitness and hiking products, as well as classes and adventure trips to every continent. I m proud of our legacy, but more importantly, I m proud of where we re headed into the future, Brian Unmacht Interim CEO, Recreational Equipment, Inc. By embracing technology, REI reaches customers wherever they are. In its early days, sales were made through the call center or catalog. Today, more sales are made online through the Web or mobile phones, in-store or via direct sales. The company was one of the first retailers to launch an online marketplace, in Like most retailers and outdoor companies, REI imports many of its products. The company s Sumner, Wash., distribution center is located about 12 miles from Port terminals, while a second distribution center in Bedford, Penn., serves the East Coast market. Through grants, the retailer partners with local nonprofits to restore and maintain well-known trails, parks and waterways. Employees also participate in community service projects, like maintaining trails or picking up garbage along the shoreline. I m proud of our legacy, but more importantly, I m proud of where we re headed into the future, said Brian Unmacht, REI s interim CEO, in a video celebrating the company s 75th anniversary. Pacific Gateway FALL 2013 portoftacoma.com 15

18 Maintenance team stretches to meet customer needs Every workday at 7:30 a.m., about 40 maintenance employees start their day at the Port of Tacoma by gathering to do a series of stretching exercises. While the activity focuses on physical fitness, it also symbolizes what each member of the department does every day: stretch to meet the needs of the Port and our customers. The 70-member department is comprised of two divisions. The facilities team, led by Kate Deaver, includes carpenters, plumbers, electricians, track crew and environmental technicians, a master gardener and a certified horticulturist. The equipment team, led by Bruce Koch, specializes in working on the Port s container cranes, straddle carriers, vehicle fleet and managing an extensive parts inventory. All maintenance trade workers are members of International Longshore and Warehouse Union Local 22. The department is responsible for keeping all Port equipment and facilities running smoothly, along with performing maintenance at some of our leased facilities. The equipment team maintains the Port s fleet of eight container cranes and 27 straddle carriers. Keeping these monster machines running smoothly is a key factor to keep container cargo moving and customers satisfied. That s why the maintenance team has a comprehensive preventive maintenance program for every major piece of Port equipment. The program relies on an extensive parts inventory to ensure that when parts are needed, they are available. The strategy helped the Port maintain 99.6 percent uptime for our cranes last year. Five storekeepers track more than 8,000 line items and $4 million in parts inventory for equipment ranging from container cranes and straddle carriers to forklifts and air conditioners. Their attention to detail is incredible, Koch said. Part of our recipe for success is to make sure we have skilled people and the right parts on hand to get the job done. The results of this approach are impressive. If a crane goes down for any mechanical reason, the maintenance crew has it back up and running within 15 minutes 99 percent of the time. One part of our partnership with labor is to honor the expertise that our team members have, said Kevin Zinski, director of maintenance. 16 Pacific Gateway FALL 2013 portoftacoma.com

19 Our crews continually come up with creative ways to tackle problems and develop innovative and cost-effective solutions. For example, the team built a special boom to help a leased warehouse facility quickly and cost-effectively repair columns damaged by forklifts. Instead of replacing 60 breaker switches on reefer plugs at one of the Port s container terminals when they started to fail, maintenance employees worked with a local company to rebuild most of them. The project was completed for about $35,000, a fraction of the original $150,000 estimate to replace them all. At the Totem Ocean Trailer Express (TOTE) terminal, the Port maintains two floating fenders that protect the dock when vessels arrive. The two existing fenders had been in use since the mid-1970s and were nearing the end of their useful lives last year. The floats relied on an older technology of air bladders, tires and chains, so the ongoing maintenance and repair costs continued to rise. Our maintenance team explored alternative fender solutions, eventually Robert Rice and Travis Miller climb to the top of a Port-owned crane at Husky Terminal to perform routine maintenance. settling on a foam-filled model that would require less maintenance. We reached out to our customer, TOTE, as well as our Port s engineering team, to more fully discuss this option, Deaver said. Once TOTE approved the concept, our engineering team developed the specifications and purchasing ordered the new fenders. It was a real team effort. The fenders were manufactured and delivered in mid-may. The installation window was narrow given the tight schedule of TOTE s twice weekly sailings between Tacoma and Alaska. Early one Thursday morning, a TOTE ship sailed from the terminal. The new fenders were driven to Terminal 4, located directly across from the TOTE terminal, and lowered into the water by a container crane. After tethering each fender to a small motor boat, two maintenance employees guided it across the Blair Waterway and into place. Both fenders were successfully installed by early afternoon a full 24 hours before the next vessel was expected to arrive. The maintenance team s work is not limited to buildings, terminals, grounds and equipment. It also includes rail infrastructure. With more than 120 years of combined experience, the five-member track crew inspects all 66 miles of Portowned track each month to keep rail running smoothly. While the challenges the maintenance team face every day are different, their approach to tackling them is the same, Zinski said. Our people do it with skill, teamwork and pride. And a whole lot of stretching. PG Pacific Gateway FALL 2013 portoftacoma.com 17

20 Expanded connections to Oceania The Port of Tacoma s connection to Oceania strengthened last year when new container services arrived at Washington United Terminals. Grand Alliance member Hapag- Lloyd relocated the Oceania Service it jointly operates with Hamburg Süd when the shipping consortium moved to Tacoma last July. Operated in partnership with U.S. Lines and ANL, it serves the U.S. West Coast, Australia and New Zealand. The container service complements Tacoma s existing breakbulk offerings. Roll-on/roll-off carriers Wallenius Wilhelmsen Logistics and World Logistics have provided access to Oceania for several years. Two-way trade between Tacoma and Oceania grew to nearly $507 million in 2012, an increase of 350 percent from the previous year. Australia accounted for $412 million, propelling it into the eighth spot on our list of largest international trading partners. This year is shaping up to be even better. Through the first five months of 2013 (the latest date for which information was available), two-way trade sits at $375 million. Exports accounted for 53 percent of total trade, with imports at 47 percent. Top containerized exports include vehicle parts, forest and agricultural products and meat, while top imports feature meat, wine, beer and aircraft parts. Several of the top commodities are a direct result of the Oceania Service. Take, for example, meat and seafood. Through the first five months of 2012 before the Oceania Service moved to the Port these commodities were not traded between Tacoma and Oceania. Through May 2013, nearly $55 million in imported beef has arrived, making it our top import commodity from the region. Meanwhile, exports of Pacific Northwest pickled and preserved salmon products have reached nearly $17 million. We re proud to provide our customers with expanded access to global markets through the Port of Tacoma, and look forward to continuing to grow the Oceania market, said Tom Bellerud, director of business development for container services. PG Growth in two-way trade between Tacoma and Oceania $500 $400 $300 $200 $100 $0 The value of two-way trade spiked in 2011 and 2012, propelled by strong exports of industrial machinery to support Australia s mining and agricultural industries. This year is on track to exceed previous years, driven by the added container services. 18 Pacific Gateway FALL 2013 portoftacoma.com

21 Port of Tacoma Transload Warehouse & Distribution Center Guide The Port of Tacoma is at the heart of transload activity in the Pacific Northwest. This guide lists more than 40 of the transload warehouses located within 20 minutes of Port terminals. Each facility offers a unique mix of capabilities and value-added services, providing shippers with a wide choice of service providers for handling retail, agricultural or industrial commodities. Learn more about these companies at American Fast Freight, Inc th St. Ct. E Fife WA Web: boydj@americanfast.com Phone: Fax: Americold th Ave. E Tacoma WA Web: brian.getchell@americold.com Phone: Apex Cold Storage 3400 Industry Dr. E Fife WA Web: ernieu@apexcoldstorage.com Phone: Fax: Arrow Reload Washington, Inc Taylor Way Web: jkent@arrow.ca Phone: Carlile Transportation Systems, Inc Taylor Way Web: msievert@carlile.biz Phone: Fax: D&B Trucking 1905 E Lincoln Ave. Web: bill@dandbtrucking.com Phone: Fax: Damco Distribution Services Inc th Ave. E Sumner WA Web: chris.ratliff@damco.com Phone: Fax: Digby Trucklines, A Division of Navajo Express Auburn Terminal th St. NW Auburn WA Web: Phone: , Fax: FedEx Trade Networks 2820 B St. NW #101 Auburn WA Web: sam_burke@ftn.fedex.com Phone: Fax: Holman Distribution th Ave. S Kent WA Web: FOlson@holmanusa.com Phone: Horizon Lines 1675 Lincoln Ave. Bldg. 300 Web: cnovosad@horizonlines.com Phone: K-Pac California Inc. (Tacoma) 2602 Port of Tacoma Rd. Web: jfilkins@kpaccoldstorage.com Phone: Fax: Lile International (Kent) th Ave. S Bldg. H Kent WA Web: cole.manahan@lile.com Phone: Fax: Lile International (Tacoma) nd Ave. S Tacoma WA Web: eric.ryden@lile.com Phone: Fax: Lineage Logistics - Tacoma 2302 Milwaukee Way Web: cgeise@lineagelogistics.com Phone: Fax: MacMillan-Piper, Inc. (Milwaukee Way) 2102 Milwaukee Way Web: tjrose@macpiper.com Phone: Fax: MacMillan-Piper, Inc. (South Park) th Ave. S Seattle WA Web: jleigh@macpiper.com Phone: Fax: MacMillan-Piper, Inc. (Taylor Way) 1509 Taylor Way Web: tjrose@macpiper.com Phone: Fax: Mercer Distribution Services, LLC th Ave. E Fife WA Web: allen@mercerlogistics.com Phone: Fax: Mitco LTD 2302 B St. NW #101 Auburn WA Web: l.glenn@mitcoltd.com Phone: Fax: Morgan Trucking 1621 Lincoln Ave. Web: morgantruck@aol.com Phone: Fax: Norvanco International 4301 West Valley Highway E Sumner WA Web: mmoore@norvanco.com Phone: Fax: OHL 2802 Perimeter Rd. Ste. 101 Auburn WA Web: mgreen1@ohl.com Phone: Fax: Continued on page 20 Pacific Gateway FALL 2013 portoftacoma.com 19