US East Coast ports chip away at West Coast dominance

The Port of New York and New Jersey - East Coast ports are chipping away at the West Coast's traditional dominance The Port of New York and New Jersey - East Coast ports are chipping away at the West Coast's traditional dominance

The balance of seaborne-cargo delivery in the United States shifted further east in the last year, resulting in East Coast seaports making gains against their West Coast counterparts, according to an index of North American seaports.

Commercial real estate and investment firm, CBRE Group, has released its second annual North American Seaports and Logistics Index which puts the Port of Long Beach at the top spot, thanks mainly to the arrival of a new Asian shipping line in Long Beach. However, most of those on the rise in the top ten are East and Gulf Coast seaports.

Adam Mullen, occupier and supply chain leader in CBRE’s Industrial & Logistics division for the Americas, explained: “Companies today are facing monumental supply chain pressures due to changing consumer behaviour and a need to balance cost and service while keeping their business safe from interruption.”

“Recent shifts in port volumes as companies strain to determine their best global shipping routes underscore that global commerce is in a race – an arms race of sorts – to build better, even more efficient supply chains,” he added.

The renewed momentum for eastern ports can be attributed, at least in part, to shippers shifting cargo east in response to last year’s labour trouble at primary West Coast ports.

The West Coast labour disruption indirectly contributed to two East Coast ports and one Gulf Coast port climbing in the CBRE rankings, with the Port of New York and New Jersey climbing one spot to No. 2 overall, the Port of Savannah ascending two spots to No. 4 and the Port of Houston leaping five spots to No. 5.

Meanwhile, on the West Coast, the Port of Los Angeles, which posted an uncharacteristically slow year, fell two spots to No. 3, and the Ports of Seattle and Tacoma fell two spots to No. 6. The Port of Oakland, hindered in the rankings by a mix of factors including a decline in container-shipping volumes and the eventual closure in early 2016 of a terminal, tumbled five spots to No. 10.

Overall, the major East and Gulf Coast ports accounted for nearly all of North America’s gain last year in cargo volume, whittling away at the West Coast’s traditional dominance. West Coast ports accounted for 52% of all teu volume last year in North America, down from 57% percent in 2010.

That continued eastward shift means that the June 2016 opening of the widened Panama Canal, which will allow substantially larger ships a faster route from the Pacific to East Coast ports, likely won’t register as large an impact on cargo destinations as previously thought. Much of the cargo that could be transferred from West Coast to East Coast without substantial extra cost was shifted in recent years.

In addition, the cost savings of big ships passing through Panama to get to East Coast ports rather than navigating around South America aren’t significant enough to spur an accelerated shift to East Coast ports. However, due to the numerous, persistent pressures faced by shippers, retailers and suppliers, it is likely those companies will continue to weigh such decisions over the next several years.

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