U.S. Shipping Routes Shift to Atlantic Ports
Boston, Philadelphia, Savannah, and Charleston benefit from West Coast union snags.
Take all those claims of reduced lines of tankers carrying supply chain shipments along the West Coast with a grain of salt water.
Many of those ships are headed to the Atlantic Ocean, according to a new report from Marcus & Millichap.
In 2002, approximately 80 percent of transpacific cargo entered the U.S. through West Coast nodes; that figure has fallen to 56 percent just over 20 years later.
Western port snags benefitted East Coast entry points in 2022 after prolonged negotiations between the Pacific Maritime Association and the International Longshoreman and Warehouse Union prompted fears of a port shutdown along the West Coast.
The Port of New York and New Jersey is now busier than its Southern California counterparts for the first time in multiple decades.
“Though monthly throughput in Los Angeles has normalized as this hub remains in operation, ongoing negotiations there have kept some retailers at Atlantic and Gulf ports,” according to the report.
The Ports of Boston and Philadelphia as well as those in Savannah and Charleston are also seeing a boost.
The former both inaugurated multi-year enhancements to berthing and throughput capacity last year totaling more than $1.2 billion, with these nodes receiving their first direct routes from China and other East Asian markets as a result.
Last year’s record cargo tonnage entering Savannah and Charleston necessitated public investment in these locales. A $410 million project underway at the Georgia facility will expand cargo capacity by more than 50 percent by 2025, Marcus & Millichap added.
“Moving forward, increasing friction with China, paired with a trend of nearshoring manufacturing often favoring Latin American nations, could accentuate this push eastward,” according to the report.
“Nevertheless, concern over potential labor disputes at eastern ports has arisen. East and Gulf Coast union talks have already opened pending the active contract’s 2024 expiry. However, Southern California’s points of entry have demonstrated that ports can maintain operations amid labor disputes.”