US West Coast ports ‘winning again’ as volumes soar

Covid disruptions saw an accelerated drift of market share to the US East Coast as terminals on the US Gulf and on the eastern seaboard developed their handling capacity and ability to work significantly larger ships.

Eleanor Hadland, senior analyst for ports and terminals at Drewry Shipping Consultants said: “There was a defensive move by US shippers to the East Coast when the West Coast [dockers’] contract negotiations were going on, when those discussions concluded shippers relaxed and some cargo returned to the Californian ports.”

According to Hadland the East Coast ports have not seen industrial action for many years, but with the International Longshoremen’s Association (ILA) ready to strike the day after its current contract ends on 30 September and the Red Sea diversions along with disruption on the Panama Canal the “West Coast is winning again”.

The shift to the East Coast will continue in the long-term, said Hadland, because of the population distribution in the US, but this will a “slow and steady process”.

Changes will occur in the West Coast market too as the evolving tariff regime becomes more apparent and following the 2020 transition from the North American Free Trade Agreement to the US, Mexico, Canada Agreement (USMCA) which has created more stringent rules of origin.

Related:Early peak season brings record volumes to Port of LA

The Mexican market is growing in importance with the ports of Lázaro Cárdenas and Manzanillo adding 460,000 teu, 5.2%, to their volume throughput in the first half of this year, taking their combined throughput to 3.3 million teu.

However, the capacity at both facilities is being expanded to cater for the expected growth as new manufacturing relocates to Mexico.

Manzanillo’s SSA terminal will add 300,000 teu capacity, which will total 2.4 million teu by 2025. ICTSI’s Manzanillo facility will add a further 800,000 teu capacity, bringing the total to 2.2 million teu by 2027.

At Lázaro Cárdenas capacity will double from its current 1.1 million teu to 2.2 million teu by 2028.

“Terminals are adding inland investments to the upgraded facilities offering a better route to [the US] market, including improvements to free zones and upgrades at the border,” explained Hadland.