PORTS in the United States have begun implementing US$30 billion in dredging and infrastructure improvements to handle bigger ships when the $5.2 billion expanded Panama Canal opens in April.
Shipping experts estimate that the two main US ports, Los Angeles/Long Beach and New York/New Jersey, will continue to grow at a steady pace after the expansion. However, secondary markets that are spending some of those billions are poised to gain market share, the National Real Estate Investor reported.
Up to 10 per cent of container traffic from East Asia could shift to east coast ports by 2020, according to a recently released study by C H Robinson and the Boston Consulting Group. West coast ports will still grow their shipping, but more cargo will head east, especially as companies look to diversify their routes to avoid more labour trouble like that experienced in California ports earlier this year.
According to the report, as well as new port studies released this week by CB Richard Ellis (CBRE) and Jones Lang LaSalle (JLL), there are five east coast ports to watch once the expansion opens.
The Port of Savannah is investing $1.4 billion to improve its port for the postpanamax ships, including $266 million in state money to dredge Savannah harbour. The port's container traffic has grown 30 per cent since 2007, and was up 12.5 per cent from 2013 to 2014, according to JLL's Seaports Outlook Report and Index.
However, CBRE's head of industrial research in the Americas, David Egan, says that while Savannah may gain in the short term, the port is limited to about 45 feet of dredging depth, which could hinder any future ship growth. "It's a river port, and there's a limit to the geology of the riverbank," he said.
The port of Charleston's container traffic improved by 41 per cent from 2011 to 2014, according to JLL, boosted by double-stacking rail lines that go through Greer, South Carolina. While the port also serves Atlanta along with Savannah, Charleston has benefited from Volvo's decision to build a $500 million factory nearby.
The port of Virginia has benefited from its Norfolk Southern rail link that goes direct to the Midwest, a region shippers want to hit hard in the next decade. Industrial space is scarce in this market, as warehouses in Hampton Roads are almost full, with nine per cent vacancy, according to CBRE. More build-to-suit construction is expected.
CBRE's Mr Egan says the Florida ports should benefit due to relaxed storage times for perishable items. Traditionally, perishables had to be stored on ships for a certain amount of time, so the ships in transit would head to ports such as Philadelphia because the vessels would have to remain out at sea to meet the time requirements.
"The time period allowed them to ensure [no] negative insects or bacteria were present," he says. "Now that timeframe has been compressed, and the ships will likely pull into Florida ports to offload when they can."
Experts agree that the Port of Baltimore won't see too much increased traffic - unless city leaders can come up with funding to allow for double-stacking capabilities. "Baltimore gets too bottle-necked, they can't unload and get freight out," Mr Egan says. Leaders in the region are also having trouble getting resident approval to expand century-old tunnels that can't handle the double-stack trains.
However, there are signs of growth, as shipping giant Maersk has started to call on Baltimore after a two-decade snub, according to JLL.
PORTS
07 August 2015 - 18:04
Five secondary US east coast ports dredge to meet Panama challenge
PORTS in the United States have begun implementing US$30 billion in dredging and infrastructure improvements to handle bigger ships when the $5.2 billion expanded Panama Canal opens in April.
PORTS
07 August 2015 - 18:04
Five secondary US east coast ports dredge to meet Panama challenge
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