Port Closes Warehouse Operation

The Port of Seattle announced today that it will close its warehouse operations by the end of the year. The Port's largest warehouse customer, Hasbro, announced in May that it would consolidate all of its import distribution activities in Ontario, California. Hasbro accounted for more than 90 percent of the Port's warehouse business. Despite efforts to market the warehouse, the Port has been unable to find new customers to fill the 1.5 million square feet of space.

An analysis published in July by Tompkins Associates, a logistics industry consulting firm hired by the Port, showed that labor costs, productivity issues and the wide range of products and services offered by competing logistics providers, put the Port's warehouse operation at a competitive disadvantage.

"Our warehouse operation has lost money for some time," said Port of Seattle CEO M. R. Dinsmore. "We've employed new technologies to try to improve efficiency, marketed to attract new customers, and worked with union employees to improve the economics of the operation," Dinsmore said. "We realize this is a difficult decision that affects people's lives, but at this point, the fiscally responsible move is to close the facility."

The contract between the Port and International Longshore and Warehouse Union Local 9 expired May 31, but the Port and the union continued to honor the contract while the two sides negotiated. Local 9 represents 141 union workers at the warehouse.

In August, at the request of Local 9, the Port agreed to take an additional 30 days to look at scenarios that would save some of the jobs and allow the warehouse operation to continue. Members of Local 9 voted on Saturday, Sept. 28, to reject a contract offer that would have achieved those goals. The contract would also have resulted in changes to work rules and reductions in wages and benefits.

Approximately 176 employees will be let go as a result of closing the warehouse. The Port will bargain the effects of the warehouse closure with the affected unions.