Seattle’s Booming Cruise Ship Business

Seattle’s Alaska cruise business has climbed steadily since its first homeport ship arrived in 2000, serving 900,000 passengers in 291 sailings last year. But despite striking financial success, Seattle’s relationship with the industry has been showing signs of strain, as environmental critics assailed the big ships for polluting the Salish Sea, accelerating global warming and mistreating its workers.

The most recent Port Commission election appeared to signal a more critical shift in the Port’s attitude toward the Alaska cruise business.

Toshiko Hasegawa, during her successful campaign in 2021 against incumbent Peter Steinbrueck, called cruise ships “disgusting gas guzzlers,” and cited allegations of poor working conditions aboard ships. 

She and fellow Commissioner Hamdi Mohamed cheered the Port’s decision to shelve a plan for a third cruise terminal at Terminal 46 as the pandemic crippled the business. “I don’t believe expanding cruise is the future of our region’s economy,” Hasegawa said.

To outside observers and cruise critics, then, it was something of a surprise to see Hasegawa championing a new agreement with Carnival Corp. – the industry’s biggest – that will lock in preferential berths for its ships for the next 10 years, with a five-year optional extension. Commissioners unanimously approved an agreement that imposes requirements far tougher than at many other major cruise ports.

Hasegawa cited the cruise line’s agreement to connect its vessels to shore power, partner with the Port on non-fossil fuels, as well as other environmental, community and tribal economic-development commitments, while generating an estimated $185 million in revenue to the Port. Carnival also will share its shore-power connection with other cruise lines.

The public will also have access to a public dashboard detailing vessel activity and environmental progress. The action came after the Commission voted to require all cruise ships to connect to shore power by 2027.

Hasegawa said she and fellow Commissioner Fred Felleman insisted the Port should “raise the bar’’ in negotiations with cruise lines. “I told staff…they can say we have an incredibly high standard of the industry we expect to see. We want them to be bold.”

Cruise operations generate the lion’s share of the Port’s non-cargo maritime revenues, but “we want to ensure that economic opportunity does not come at the expense of our neighbors,” Hasegrawa said.

The business also is vital to downtown Seattle recovery, as local tourism and cruise line officials told the Commission.  The longshore union, which handles ships and passenger baggage at the docks, also weighed in with support. 

Alaska cruising is rebuilding following the pandemic, as is the cruise business globally. For Alaska, the cruise industry reported just 124,000 passengers in 2021, rebounding to 1.17 million in 2022.

Carnival Corp. is the world’s largest cruise company with brands including Carnival Cruise Line, Holland America Line, Princess Cruise Line and Cunard. Nearly half of all Seattle ship calls are Carnival Corp. vessels, outstripping rivals Norwegian Cruise Line and Royal Caribbean Cruise Line.

“For the past 20 years, we have worked closely with the Port of Seattle to pioneer shore-power and secure the cruise industry’s role as a vital economic engine for the region,” said Carnival CEO Josh Weinstein. “We are proud to continue our tradition of teamwork with this new agreement that will help further our economic, social and environmental contributions to the region.”

The May 7, 2000, arrival of Seattle’s first homeport cruise ship, Norwegian Cruise Line’s Norwegian Sky, was widely cheered by residents, elected officials and downtown businesses.

Four years earlier, the Port had completed its Bell Street Pier cruise terminal without any homeport cruise lines signed up. It was a sign of the Port’s ambition and confidence it could anchor Alaska cruise ships in Seattle and wrest the business from Canadian ports.

Seattle earlier had tried and failed to lure Alaska homeport ships; a market then dominated by Canadian ports. Seattle was stymied by the federal Passenger Services Act that requires foreign-flag passenger vessels sailing between U.S. destinations to make a stop in a foreign port as part of the itinerary.

Seattle’s breakthrough came with the advent of bigger and faster cruise ships that could complete a seven-day Alaskan round trip, the most popular cruise product. The voyages often call at Skagway, Juneau and Ketchikan and the spectacular glaciers of Glacier Bay, Tracy Arm and Endicott Arm, before visiting Victoria B.C. on the return.

Seattle was immediately popular as a homeport for the seven-day round trips, which delivered economic booms to Alaska towns. The business soon outgrew the Bell Street Pier facility, built on cramped Pier 66. In 2004, the Port opened a second terminal and berth at Terminal 30 on the East Waterway but replaced it in 2009 with two new berths at piers 90 and 91 at Smith Cove.

In the post 9-11 era, American travelers flocked to Alaska cruise vacations, setting new records every year in Seattle until the pandemic brought sailings to a halt. Cruising resumed with a partial season in 2021, a welcome boost for downtown Seattle and the Pike Place Market, as well as struggling Alaska communities.

In 2019, just before the pandemic hit, the Port announced plans to add another cruise berth and passenger facility at Terminal 46 near Pioneer Square, which was then shuttered after its cargo operator moved away. With the collapse of the cruise business – and strong opposition from the longshore labor union to losing land for cargo – those plans were shelved.

Even as Alaska cruising took off in Seattle, environmental concerns about the behemoth ships, and their impacts on Alaska communities, were never far away. The concerns were amplified as the vessels steadily grew: Royal Caribbean’s Quantum of the Seas carries 4,200 passengers with 1,500 crew, and that’s just one of three 4,000-plus-passenger ships calling in Seattle weekly throughout the summer.

As a landlord, however, the Port has limited regulatory power over vessels compared to U.S. and international law.

In 2004, the Port led negotiations with the cruise industry and state Department of Ecology that resulted in a landmark agreement for cruise ships to increase their waste-treatment level and ban discharge in certain areas. Cruise lines and the Port voluntarily agreed not to discharge wastewater from on-board scrubbers used to remove pollution from engine smoke.

Seattle first offered shore-power connections at one terminal for cruise ships in 2004, providing power while allowing the vessels to turn off their diesel engines at the dock. This year the Port completed shore-power connections at Bell Street Pier on Pier 66 on the central waterfront.

In 2022, the Port of Seattle launched an initiative with B.C. and Alaska cruise ports and the state to create a “Green Corridor” where zero- and low-emission technologies can be employed for cruise operations. The first step is an evaluation of fueling four ships with non-petroleum “green methanol” (methanol produced by biomass or carbon capture) in service by 2032. This is a key element of the Port’s strategy for eliminating greenhouse gas emissions from its operations by 2040.

Earlier this year, Felleman won Commission approval to move up the deadline for all cruise ships to connect to shore power, from 2030 to 2027.

Progress on environmental and community goals did not come easily. In the early days of cruise operations, the companies resisted performance standards higher than federal or state regulations. That is, until the pandemic struck, said Stephanie Jones Stebbins, managing director of the Port’s marine division.

Port staff met with Carnival leadership to re-set the relationship with the industry focusing on sustainability and community engagement goals like transparency, workforce development, and widening the benefits of economic development. The cruise lines also realized the importance of engaging more closely with the Commission.

“We wanted to make sure we have partners who support our biggest strategies,’’ she said, including sustainability and promoting additional hotel stays before and after cruises.

The U.S. has lagged behind Europe in progress toward a greener cruise industry, in part due to the incentives offered to companies.

Today, the Port’s Jones Stebbins said the industry sees sustainability as critical to its future. She anticipates similar agreements with Royal Caribbean and Norwegian in coming years.

“I am very happy with the commission’s enthusiastic support,’’ she said.

But for opponents of Alaska cruising, the Port’s actions are no more than “greenwashing.” They say that the Carnival agreement barely touches the air and water pollution from the ships.

The growth of cruise operations is provoking protests in several popular tourist destinations overwhelmed by the big ships and masses of passengers. Juneau officials negotiated a voluntary reduction in cruise passengers, but some residents are pressing for a Saturday ban on vessel calls, reports The Seattle Times.

“Of course, we are disappointed they seem to be committed to growth without finding any solutions,” said Elizabeth Burton, a founder of Seattle Cruise Control.

Seattle Cruise Control calls for the Port to demand immediate emission reductions; if the companies fail to comply then the number of vessel calls should be reduced.

Cruising is “a form of tourism whose very business model is based on wrecking the climate, polluting the air and water, exploiting labor, and putting all that we love at risk,” Burton wrote in The Urbanist, as the cruise season began.

“Regarding the new berthing agreement: Carnival is hardly a sterling partner in sustainability. It has a 50-year record of repeated environmental felony convictions, and over 800 violations of probation, some as recent as 2022,” Burton said.

The Port Commission doesn’t see it that way. With strong business and labor support the Commission appears committed to a policy that encourages Alaska cruising growth while engaging with cruise lines to ramp up requirements for environmental and community benefits.

Felleman credits Jones Stebbins and other port staff with achieving landmark environmental agreements with the cruise lines while also boosting regional economic benefits to $900 million a year. Strong market demand gives the Port leverage to push for more community benefits, he said.

“I have no great love for the cruise business. But we are in the cruise business,” Felleman said.

This is the challenge facing the modern Port: boosting economic development and creating jobs, while also dealing with the associated environmental and social impacts.

Commissioner Sam Cho argues that too heavy-handed an approach would simply lead cruise lines to shift operations elsewhere, such as Canada, with less stringent conditions. Cho works on downtown Seattle economic development for Mayor Bruce Harrell.

 “You can’t change the game if you are not in it,” said Cho. “I’m very proud of the work we are doing toward improved environmental practices.”