US Shippers Turning East

US East Coast Ports Growing Faster

Congestion woes at the US Pacific ports caused by a recent labor dispute have helped the US East Coast ports to grow at a faster rate than their West Coast counterparts, according to the inaugural edition of ‘North America Ports Logistics Annual Report,’ issued by the American commercial real estate company CBRE Group.

But even as the East Coast ports are gaining ground, the ports of Los Angeles and Long Beach still topped the report’s first-ever ‘Ports and Logistics Index,’ due to infrastructure that is well-suited to handle the largest cargo container ships, their proximity to Asian export markets, a strong local economy and a deep industrial real estate market, CBRE says.

New York and New Jersey, Seattle/Tacoma Alliance and Oakland round out the top five ports on the Index, which ranks the top 15 North American ports based port infrastructure capabilities and the strength of the local industrial real estate market.

”Although the location needs of supply chain users are somewhat fixed given existing distribution centers and customer locations, these networks are always evolving and adjusting to meet increasingly complex inventory requirements,” said David Egan, head of industrial research in the Americas for CBRE.

”As ports across North America continue to address operational efficiencies caused by greater cargo volumes, labor disputes and a shortage of workers, supply chain users are exploring diversification strategies that move some portion of inbound cargo from the congested West Coast ports to East and Gulf Coast ports.”

When it comes to port infrastructure alone—which measured total twenty-foot equivalent unit (TEU) volume, long-term growth in annual TEU volume and year-over-year growth in TEU volume—Los Angeles, New York and New Jersey and Long Beach took the top spots, with Savannah and Virginia (Norfolk) placing fourth and fifth, respectively.

With respect to the real estate ranking component—which was weighted less heavily in the overall rankings than port infrastructure—the characteristics measured included a market’s total size, availability of existing industrial space, demand activity, historical and forecast construction rates, rent growth and each market’s position in its own cycle.

The markets with healthy amounts of existing and planned space for their size, and which have experienced growth during the current recovery cycle but have not yet reached their peaks, rose to the top of the list. Los Angeles and Long Beach were the top-ranked markets in this component, with Houston, Oakland and Seattle/Tacoma rounding out the top five, according to CBRE.

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