When ports refuse wage rises, more people should take notice. Seattle has provided a model answer to other sectors of the economy with boss Tay Yoshitani turning down a 4 percent pay hike on top of his $330,000 a year. Some investment bankers and hedge fund managers make that in a month and suck their thumbs when they are criticized.
What makes Yoshitani's stance that much more admirable is that it's in a rising market, for maritime business at least. TEU volumes were up 45 percent in the first half of the year compared to 2009, to a shade over 1 million. Excluding empties, inbound traffic rose 63 percent and outbound only 23 percent, which also gives a fair indication of why the national economy continues to be in such a dismal state. (Total container volume for July was 219,000 TEUs, a 62 percent increase compared to July 2009.)
Grain volumes at 2.8 million metric tons were up 11 percent and 23 percent higher than budget.
Port operating revenue was $44.5 million, $1 million more than 2009 and 5 percent over budget, while income after expenses was 24 percent better than budget, a splendid achievement. Container net operating income at $22 million was more than $3 million over budget.
Operating revenue for the full year is now expected to be $91 million, 1 percent higher than originally forecast, with income after expenses almost the same as 2009 at $49 million. Intriguingly, this is $1 million less than the actual for 2009.
Predictably, ports are conservative in their estimates (so that good results flatter them and losses don't seem all that bad), but this outlook strengthens the industry's warnings of a worse second half than expected.
Seattle is also going easy on capital projects, with spending for the full year likely to be $20 million, 64 percent less than the budget allocation.
But, by heck, one tends to forget that Seattle is dominated by the airport, which takes more than 10 times the amount of capital spending and four times the revenue of the seaport (public parking alone taking in $50 million a year). That division is suffering and is part of the reason for the reduction in maritime capital spending.
Yoshitani's magnanimity has a wider perspective, after all.