Ports Projections

Spring 2016

The balance of power between U.S. West and East Coast ports is shifting slightly.

THE BALANCE OF POWER between the West Coast and East/Gulf Coast ports has long favored the West Coast, which has had an inherent location advantage for trade between Asia and North America. In 2015, the balance began to shift slightly in the aftermath of the labor dispute and subsequent slowdown at the West Coast ports. Import/export users moved some of their business east to avoid the massive bottlenecks that occurred last spring and mitigate against any future slowdown risk. 

The net result was a 2 percent gain of market share for the major East and Gulf Coast ports. With the projected 2016 opening of the wider Panama Canal, which will give larger, post-Panamax ships easier access to the East Coast from Asia, the question is, how much more market share will shift to the East?

united states map

Current projections suggest that the major East and Gulf Coast ports can expect to see additional gains as a result of the expanded Panama Canal, but only small, marginal growth on the order of 1 to 3 percent. The combination of proximity to Asia, a large regional consumer base (approximately 60 percent of goods imported through the Ports of Los Angeles and Long Beach stay in the immediate Southern California area) and established supply chain infrastructure will continue to make the West Coast the favored inbound and outbound port for the majority of supply chain and shipping companies.

The CBRE Ports and Logistics Index measures and weights a variety of factors relating to port infrastructure and the industrial real estate markets most influenced by port activity. Metrics include total TEU (twenty-foot equivalent) volume, short- and long-term change in volume, port operations, the size of the industrial market, the current vacancy rate, the long- and short-term change in vacancy and the construction pipeline.

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For more information:

“North America Ports & Logistics Annual Report,” CBRE, May 2015