USWC invests in infrastructure and technology to regain lost cargo

WEST coast ports saw US import volumes from Asia drop from 70 per cent in 2014 to 66

05 January 2020 - 19:00

WEST coast ports saw US import volumes from Asia drop from 70 per cent in 2014 to 66.6 per cent in the first 10 months of 2019, PIERS data shows.

US west coast ports have lost market share for five years due to expensive terminal leases, dock strikes, high intermodal rail rates, and costly environmental regulation.

Now, port authorities say they are prepared to build the infrastructure and implement the technology that is needed to reduce the cost of handling cargo and speed up the flow of cargo, reported IHS Media.

'The only way to stay competitive is to operate more efficiently,?the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma's chief operating officer Dustin Stoker told the DrayTech seminar in Long Beach in June.

West coast ports ship two-thirds of their imports inland to the eastern half of the US, but to be able to compete better with the east coast ports, they need to make the transfer of containers from vessel to rail and truck carriers more efficient and at a lower cost to beneficial cargo owners (BCOs) than at present.

'We get the cargo off the ships is fine,?port of Los Angeles deputy executive director of marketing Michael DiBernardo told the Propeller Club of southern California in November. 'Getting the cargo to the rail and trucks out of the gate on time is how we will compete with the east coast ports,?he said.

West coast ports compete for discretionary cargo from Asia with ports on the east and Gulf coasts and with the Canadian ports of Vancouver and Prince Rupert.

As manufacturing in Asia continues to migrate from China to Southeast Asia, US west coast ports are expected to lose more market share given that east coast ports are well-positioned geographically for all-water services via the Suez Canal from Singapore and points west.

In the first 10 months of 2019, US imports from Asia to the west coast fell by 3.2 per cent, while imports rose five per cent through the east coast and 17.4 per cent through the Gulf Coast, according to PIERS.

Vancouver and Prince Rupert continue to expand their presence in the US market at the expense of all west coast ports, but especially with Seattle and Tacoma. Over the past five years, the two Canadian ports expanded their share of US imports from Asia that via the Pacific Northwest region of the United States and Canada from 58.2 per cent in 2014 to 63 per cent, PIERS said.

Terminal leases are generally higher on the west coast than on the east coast. There are only three major gateways on the west coast ?Los Angeles-Long Beach, Oakland and Seattle-Tacoma ?and they usually charge market rates for their leases. On the east coast, a half dozen ports from Florida to Boston compete for discretionary cargo, and they use lease rates as a tool for attracting carriers' business.

Los Angeles and Long Beach have the most expensive terminal lease rates in the country, at least twice the cost of other ports, according to Pacific Merchant Shipping Association president John McLaurin. When the cost of compliance with environmental regulations is added to port charges, carriers, terminal operators and BCOs pay a premium for shipping through the west coast, he said.


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