With all of the attention focused on the supply chain in the past year, it is not surprising that events involving ports grabbed some of the headlines, ranging fromships stuck in the Panama and Suez Canals, to lines of shipsparked out in the ocean waiting to land at Southern Californiaports because of rampant congestion.
What these singular events point to is a worldwide growthin demand for port services and facilities that industry expertsbelieve will continue to rise for many years to come.
One reason for the rising demand is simple—no one is mak-
ing more land and it is in short supply around most ports. Add
in governmental and environmental challenges that can add
as much as a decade to the building of new facilities, and you
can see why North America’s ports—especially on the West
Coast—have had trouble keeping up with the growing flood
It also is widely hoped that while imports will grow, manycongestion problems eventually will be left behind, accordingto a port study by the industrial real estate firm of Cushman& Wakefield.
C&W points to projections that imports will rise by about
21% this year, adding, “With congestion at most U.S. ports
beginning to ease, the stage is set for strong port volumes and
performance in 2021.”
Surprisingly, overall inbound loaded twenty-foot equivalent
unit (TEU) volumes were reported to have been up by only a
modest 2%, while outbound loaded volumes were down on all
coasts, in total by about 5.5%, C&W reported.
Good results were booked in 2020 on the inbound side atthe largest North American port gateways. California ports didwell, especially Long Beach with 6% growth, as did Vancouverat 5%. On the East Coast, Savannah and New York/New Jersey,the largest players, did the best at 4% inbound growth each.
One impact of surging demand during the pandemic was thatthe multi-year trend of freight shifting from the West Coast toEast Coast ports slowed to a stop, but the researchers expectthis trend will eventually return.
This earlier shift reflected a desire for speed on the part of
importers who were desperate to replenish goods that were
flying off their shelves, C&W said. “The gamble was that the
shorter ocean voyage to the West Coast would result in a faster
journey to retailer distribution centers. However, this did not
always materialize given the substantial delays at Southern
North American importers also shifted sourcing away from
China and toward other Asian countries and Mexico. U.S. im-
ports from Vietnam grew by 27% a year in value from 2018
to 2020, while imports from China dropped in value by 10%
a year during the same period.
C&W noted that the U.S. East Coast is reached more cost-effectively via the Suez Canal route than by a transpacific routetransiting the Panama Canal or using a land-bridge via a WestCoast port. If this sourcing trend away from China continues,volume will shift towards Atlantic versus Pacific Coast ports.
PORTS DEAL WITH GROWING PAINS
E-commerce growth spurs demandfor warehousing and freight-handling facilities.
By David Sparkman
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