A recent news article published in the Freight Waves states that TRB panel: East Coast ports reaping rewards of investments.
U.S. East Coast and Gulf Coast has passed the West Coast
With recent estimates that the combined U.S. East Coast and Gulf Coast has passed the West Coast as the largest destination for U.S. imports, a panel at the annual meeting of the Transportation Research Board here suggested that there are plenty of reasons for the shift to continue.
Capital spending by East Coast ports gained praise from panelists, who said the investments have yielded facilities with greater ability to take in the world’s biggest ships. It’s a factor in the change in market share, they said.
But there’s a problem that could slow the gains: Will the region have adequate warehouse capacity to handle the increase in imports?
Walter Kemmsies of The Kemmsies Group, which works on behalf of clients on port-related projects, said the East Coast has done a “terrific job” in steps such as improving water depths and adding taller cranes.
“But most of them messed up when it came to the gateway,” Kemmsies said. Warehouses generally have vacancies on the East Coast of 3% or below, he said, adding that Savannah, Georgia, at one point got to 0.1% vacancy. “That really chokes growth, if you’re outgrowing the space and you can’t find a place to get into,” he said.
But Kemmsies also said the southeastern area of the East Coast “has the most elbow room” for new projects to construct distribution centers. He added that constructing warehouse capacity is “tougher” in the Northeast and that has led to some warehouses following a practice common in Japan: building multistory facilities.
Kemmsies said decisions on where to land freight is often based on three C’s: cost, consistency and capacity. And as he noted, “Capacity on the West Coast has been squeezed quite a bit.”
Basic proximity to major exporters
The West Coast has always had an advantage in its basic proximity to major exporters and the ability to avoid moving container ships across large distances and avoiding the Panama Canal. But Kemmsies and other speakers noted that East Coast ports are in closer proximity to the 65% of the nation’s population that lives east of the Mississippi. With certain costs more competitive than the West Coast, “the East Coast can continue to offer lower cost capacity, and sorry, but the West Coast loses market share.”
Joe Greco, the vice president for containers at Ports America, which manages various port operations at several facilities around the country, said the West Coast also is dealing with a “finite amount of land” around its ports, “and so the ability to expand is somewhat challenging.”
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Source: FreightWaves
