Diversifying Container Shipments off West Coast Seaports

0 CommentsBy


By Chip Barnes
Senior Vice President
Jones Lang LaSalle Indianapolis

JLL recently released our 2014 Seaport Outlook with what appears to be some interesting trends on U.S. inbound cargo freight.

2013 data on TEU (Twenty-foot Equivalent Unit) volume suggests a shift away from West Coast seaports.  Even with the Panama Canal being 76% finished and not expected to be completed until Q1 2016 the East Coast ports are up 19.1% from 2007 (considered a peak year for U.S. seaports) while West Coast seaports are down 6.8%.  To further that point, 55% of 2013 TEU volume came from West Coast seaports, while the remaining volume (45%) came from the Gulf and East Coast.  This ratio was 61% – 39% in 2007.

Why is this happening?

  • Diversification:  Supply chain executives are hedging against stoppage of goods flowing into and out of their warehouses.  The history of labor strikes is causing a shift in port selection as companies put their “eggs in multiple baskets”.  The more flexible a supply chain is, the better equipped it is to handle potential disruptions.
  • “Post-Panamax ready”:  Many Gulf and eastern seaboard ports are investing billions of dollars to enhance their on-and-near dock infrastructure to be able to load and off-load vessels with 14,000 TEU capacity. 
  • Population:  Importers want to touch huge population centers along the East coast and growing the growing population in the Southeast.

The big question going forward, as it always is in the shipping industry, is going to be “At what cost?”  The cost of moving a ship through the Panama Canal has tripled over the past five years and transit costs to traverse the completed/expanded Panama Canal have yet to be set.

Leave a Reply

Your email address will not be published. Required fields are marked *