Denting debt and building relations

The Northwest Washington Port of Skagit decided to take advantage of the historically-low interest rate environment to issue bonds to refinance existing debt and provide funding for future capital projects on favourable terms.

The port, which operates three key facilities – the Skagit Regional Airport, the Bayview Business Park and the La Conner Marina – late last year issued three series of limited tax general obligation and refunding bonds, totalling $6.44m. They sold at 2.74%.

Proceeds from the first series, totalling $2.2m, will be used to refinance a portion of the port’s 2004 bonds, saving the port about $170,000 in interest payments over the next ten years.

The $2.03m in proceeds from the second series will be applied to constructing a new building and $2.21m from the third series used to acquire land and make improvements to the marina.

Commission President Bill Shuler said the timing was right for the issue. “Interest rates are about as low as they are going to get, and we have pressing capital needs to address.”

Meanwhile fierce New Zealand rivals Ports of Auckland and Port Tauranga realised they were duplicating one another’s efforts in e-commerce development. Each was leap-frogging the other with its individual offerings (InterACT at Auckland and Cargo Connect at Tauranga) but at the same time finding there were still gaps in both products.

Customers were coming back to each port, suggesting they add some item of functionality that the other had already developed.

Therefore the two joined forces to develop a new online portal called PortConnect for all dealings of shipping companies, transport companies, importers, exporters and regulatory authorities.

“All ports essentially have the same customer base and so for customers to have to access multiple systems becomes tedious,” said the two ports. “The issue with having multiple systems doing the same job is that there is significant overlapping of the functionalities and is a waste of resources.”

Although remaining fiercely competitive in their core business, the two companies have achieved significant cost and efficiency gains since burying historical differences to work collaboratively on the portal.