CBRE: East Coast Ports Growing
Seaborne cargo delivery shifted further east in the past year as East Coast seaports gained against West Coast ports, reported CBRE, Los Angeles.
Adam Mullen, Occupier and Supply Chain Leader in CBRE’s Industrial & Logistics division, said companies today face “monumental” supply chain pressures due to changing consumer behavior and a need to balance cost and service. “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 said.
Mullen attributed some renewed momentum for eastern ports to shippers shifting cargo east in response to last year’s labor trouble at large West Coast ports. Cargo traffic at western ports slowed for months until the longshoreman unions and port management agreed to a resolution in March 2015.
The West Coast labor disruption indirectly contributed to two East Coast ports and one Gulf Coast port climbing in CBRE’s rankings, with the Port of New York and New Jersey climbing one spot to No. 2 overall, the Port of Savannah, Ga. 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 posted an uncharacteristically slow year and fell two spots to No. 3, while Ports of Seattle and Tacoma fell two spots to No. 6. The Port of Oakland, hindered last year by the closure of its Ports of America Outer Harbor 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, Mullen said. West Coast ports accounted for 52 percent of all 20-foot equivalent units volume last year in North America, down from 54 percent in 2014 and 57 percent in 2010.
“The industry premonition that 2015 was the year of the East Coast was born out in the overall stats and in the way our rankings turned out,” said CBRE Head of Industrial & Logistics Research David Egan. “It demonstrated that the benefit to the East Coast from the turmoil on the West Coast is real and quantifiable.”
That continued eastward shift meant that the scheduled June 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 affect cargo destinations and industrial real estate as previously thought. “Much of the cargo that could be transferred from West Coast delivery to East Coast delivery without substantial extra cost has already shifted in recent years,” CBRE’s North American Seaports and Logistics Index said.
In addition, cost savings of big ships passing through Panama to get to East Coast ports rather than navigating around South America are not 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,” CBRE said.
