Record Breaking Fiscal Years for East and Gulf Coast Ports

Record freight is being reported at US ports as memories of the US West Coast dilemma refuse to fade.

The Georgia Port Authority (GPA) attributed part of its latest record breaking fiscal year to the “labor woes” on the West Coast. In its annual report, the GPA reported an 8% increase in cargo tonnage – 31.69 million tons. This included a 17% increase in containerized cargo which, for the first time in the port’s history surpassed 3 million container units. Break-bulk cargo also enjoyed a healthy fiscal year with a 7.6% increase. This included a record 714,021 units of autos and machinery.

But is this the only reason? Perhaps not according to some port officials who attribute an improving US economy to the boom as well. The Port of Houston Authority is predicting record levels of cargo for this year. According to the Port’s Executive Director, as of June, almost 20 million tons of cargo had moved through it. The port did benefit from the West Coast problems as well as container volume jumped as high as 30% from last year as vessels were diverted to Texas. Officials note that container growth has subsided and now is running about 19% higher than the previous year.

In addition though, “People don’t realize how international this economy is,” noted the Senior Vice President of Research at the Greater Houston Partnership. Officials further noted that much of the cargo passing through the port is related to local industry – plastic resin and chemicals that come from oil and gas. Raw materials and retail products also make up a lot of the traffic.

The 2016 opening of the Panama Canal is expected to also play a role in the shift favoring East/Gulf Coast ports. According to Boston Consulting Group and CH Robinson, up to 10% of cargo moving from Asia to the U.S. could shift from West Coast to East Coast ports. The Port of Houston Authority is preparing. It is investing $68 million to deepen its waters as well as addition $50 million in four cranes weighing 1,505 tons, nearly three times the other cranes at its Barbour Cut terminal which will go into operation later this year. The GPA is also investing in its ports in preparation as well with new equipment and deepening its waters as well.

Even still, the Boston Consulting Group/CH Robinson report concludes that while significant volumes of cargo are likely to shift their routes, the West Coast will hang on to the majority of trade from East Asia. As reported by the Wall Street Journal, clothing companies may opt to continue to use West Coast ports because maritime routes to the East Coast take significantly longer and it’s worth paying slightly more to get those goods faster to market.

But with the majority of the US population residing east of the Mississippi River, it seems that East and Gulf ports will likely continue to benefit from tonnage gains in order for shippers to get goods as close to customers as possible.

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