AK-WA Connection 2013: Saltchuk expands its links to AK

August 13, 2013

Seattle-based business owns companies across the state’s transportation spectrum and more; acquires major trucking firm in May

If one single company embodies the diverse and enduring connection between Alaska and Washington, it is Saltchuk Resources Inc.

An intermodal transportation company with almost 6,300 employees, Saltchuk owns more than 20 companies that operate as independent businesses with customers in all 50 states and Puerto Rico.

The family-owned business controls major assets organized in five lines of business – shipping and logistics, air cargo, marine resources, trucking and petroleum distribution and marketing. Among Saltchuk’s holding companies are Princeton, N.J.-based Tote Inc., which oversees Totem Ocean Trailer Express Inc., Anchorage-based Northern Aviation Services (which oversees Northern Air Cargo and three other independently managed companies), Seattle-based Foss Marine Holdings, which oversees Foss Maritime Co. and Cook Inlet Tug & Barge Co., and North Star Petroleum of Ballard, Wash., which oversees Delta Western Inc. and Inlet Petroleum Co. The company’s recent acquisition, Carlile Transportation Systems, an Anchorage-based trucking firm, brings a fifth line of business in Alaska to Saltchuk.

A new generation of leadership

Saltchuk got its start 31 years ago when Seattle lawyer and businessman Michael Garvey co-founded the company. In 2009, Garvey’s three daughters, Denise Tabbutt, Michele Seaver and Nicole Engle, became majority owners of the company.

Today, Saltchuk, which means “saltwater” in the Pacific Northwest trade jargon used by Native Americans and early settlers, is still lean at the top, overseeing a growing transportation empire from a 26-employee office in Seattle.

Saltchuk is often referred to as asset intensive because we utilize expensive equipment throughout our companies. But our most valuable asset is not a tugboat, an airplane or a ship; it is the people who work throughout the family of Saltchuk companies, the sisters wrote in a brochure about the company.

Like their father, the Garvey sisters say they remain committed to providing stable and financially sound ownership to Saltchuk’s operating companies, including providing the capital for reinvestment and growth, and passing the company in even better shape to their children. That commitment is reflected in the company’s policy of re-investing 90 percent of its profits in the business.

Our family’s strategy allows for significant re-investing in existing operations and acquisitions on top of that, said Saltchuk Chairman Mark Tabbutt in a recent interview.

Carlile “a great fit”

The strategy enabled Saltchuk to purchase Carlile, one of the largest trucking and logistics companies in Alaska, on May 31 for an undisclosed sum.

We’ve known them and done business with them for 20 years, and we personally knew the owners, Tabbutt said of Carlile. “They touched several parts of our organization. They are a large customer on the ship side at Tote. They provide fuel transportation for our fuel group, and they are a customer of Northern Air Cargo. As you go around our companies, Carlile has a lot of connections.”

Carlile CEO and co-founder Harry McDonald said, “I really feel this is a match made in heaven. Saltchuk is family owned, as we are, and we share like values.”

Tabbutt said the biggest motivator for Saltchuk to pursue Carlile was “the thought that our cultures aligned and would make a great fit.”

We approached them in December and we’ve been working on (the transaction) for six months, he added.

Saltchuk President Tim Engle said Carlile’s strong safety culture was one of the driving factors in Saltchuk’s interest. “There is a lot of similarity between Carlile and our other operations – we have people often exposed to harsh environments and working around and relying on heavy machinery. Getting everyone home safe to their families is our No. 1 priority,” Engle added.

With 700 employees, Carlile will remain a standalone company with headquarters in Anchorage. It will become a part of Tote Logistics, and significantly increase Saltchuk’s presence in cargo consolidation, warehousing, trucking and other logistics in North America.

Re-investing in Alaska

Saltchuk also recently decided to convert Tote ships sailing between the Port of Tacoma and Anchorage to dual fuel-burning engines so they can be powered with liquefied natural gas.

Our intent will be to burn LNG all of the time, and essentially eliminate the emission of greenhouse gases in powering our vessels, Tabbutt explained.

The vessels, which transport a third of all container cargo shipped to Alaska, will retain their diesel-burning capabilities in case they are called upon, as they have been in the past by the military, to sail to the Persian Gulf where a LNG supply might not be available.

But if that vessel is operating in the Alaska trade lanes, it will be clean-burning all of the time because we have access to a supply of LNG fuel in the Pacific Northwest, Tabbutt said.

Saltchuk also has contracted with General Dynamics to build two new LNG ships for the company’s Florida-Puerto Rico trade.

And we’ve committed to build three ocean ‘Arctic-class’ tug boats to operate off Prudhoe Bay, working for the oil industry, Tabbutt said.

The vessels, which are being built in Foss Maritime’s Rainier, Ore., shipyard, will be used primarily for towing barges with oil field modules, rig topsides and project cargoes. The company plans to take delivery of the first of the new tugs later this year.

An enduring commitment

The investment reflects Saltchuk’s ongoing commitment to Alaska.

We tell people ‘we’re all in’ in Alaska. We’re very supportive of resource development in the State of Alaska, and we’re supportive of the governor’s recent successful effort to attract more investment for oil exploration in the state, Tabbutt said.

He noted that Saltchuk is expected to grow 15 percent this year with the Carlile acquisition and in Alaska as much as 25 percent.

In the Alaska-Washington trade, the company employs roughly 1,200 people in Alaska and another 300 workers in Washington across its operating companies.

Tabbutt said significant developments in transportation in recent years have brought to Anchorage and other more populated areas of Alaska the same access to goods and services that are available in the Seattle area.

That is due to the very substantial investment that has been made in the transportation sector, specifically the Alaska-Washington trade, he added.

And the benefits of that relationship flow both ways. Adds Tabbutt: “In all our public policy meetings, with Sen. Patty Murray, D-Washington, and others, we remind people all the time of how important Alaska is to Washington, to employment here in the region.”

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