East Coast Ports: Rising Giants in US Maritime Trade

Introduction: The Shifting Tides of US Port Dominance

For decades, the ports of Los Angeles and Long Beach on the US West Coast have reigned supreme as the nation’s largest and busiest ports. However, a significant shift is occurring in the maritime landscape, with East Coast ports steadily gaining ground and reshaping the dynamics of US trade. This transformation is not just a matter of regional competition; it represents a broader change in global trade patterns and the adaptability of our nation’s port infrastructure.

Recent data from the Pacific Merchant Shipping Association (PMSA) West Coast Trade Report highlights this trend:

• In 2017, the US West Coast received 54.2 million metric tons of cargo from East Asia, compared to 21.8 million metric tons received by the East Coast.
• However, the East Coast recorded a 2.5 million metric ton increase from the previous year, outpacing the West Coast’s growth by 1 million metric tons.
• East Coast ports saw an impressive 8.6% increase in containerized shipments from East Asia in 2017.
• The ports of Charleston and Jacksonville led this growth with increases of 18.9% and 24.3%, respectively.

These statistics paint a clear picture of the evolving landscape of US maritime trade. As we delve deeper into this topic, we’ll explore the factors driving this shift, the investments being made by East Coast ports, and the implications for businesses and the broader economy.

The Rise of East Coast Ports: A Tale of Strategic Investment

The growth of East Coast ports is not a coincidence but the result of strategic planning and substantial investments. Ports along the Eastern seaboard have been proactively upgrading their infrastructure to accommodate larger ships and handle increased cargo volumes. These improvements include:

• Deepening and widening of harbors and berths
• Expansion of rail terminals
• Upgrades to crane technology
• Enhancement of overall port capacity

For instance, the Port of Savannah now handles an impressive 11,000 containers per day, triple its capacity from just 15 years ago. This growth is a testament to the port’s strategic investments and its ability to adapt to changing trade dynamics.

Klaus Lysdal, VP of Operations at iContainers, notes, “I think there is a healthy competition going on between the East Coast ports. The close proximity and shared inland markets keep everybody on their toes. They have all seen growth and realized there is even more potential.”

The China Factor: Bridging Distances and Expanding Trade

Despite the vast distance between China and the US East Coast, the Asian giant remains a crucial trade partner for these ports. The efficiency of modern shipping routes means that goods from Shanghai can reach Atlanta through the Port of Charleston in just 29 days, with sea transport adding only about 3% to wholesale costs.

This efficient connection has led to significant trade flows. For example:

• The Port of Charleston ships approximately $2 billion worth of vehicles to China annually.
• More than two-thirds of goods passing through South Carolina ports involve trade with China.

Jim Newsome, South Carolina Ports Authority Chief Executive, emphasizes the importance of this relationship: “China is where the growth is. I don’t think the world can function without free trade. The global supply chain is based on trade and I don’t think you can walk that back.”

The Panama Canal Expansion: A Game-Changer for East Coast Ports

The expansion of the Panama Canal in 2016 has been a pivotal factor in the growth of East Coast ports. This expansion has allowed for the passage of larger vessels, effectively redrawing the map of global shipping routes. Key points to consider:

• The canal now serves 29 major liner services on the US East Coast to Asia route, with 15 of these being Neopanamax liner services.
• In the 2018 fiscal year, one-third of vessels passing through the Panama Canal were on the US East Coast-Asia route.
• The US, China, Mexico, Chile, and Japan were the largest users of the canal during this period.
• 62.8% of the cargo passing through the canal was either destined for or originating from the US.

East Coast ports have been quick to capitalize on this opportunity. Ports such as New York, Baltimore, Savannah, and Charleston have invested heavily in expansion projects to accommodate larger ships and increased cargo volumes. These investments include:

• Dredging to deepen harbors and expand berths
• Purchase and heightening of new cranes
• Overall infrastructure improvements to handle larger ships and volumes

As a result, several East Coast ports have seen record year-on-year growth in total tonnage, a success directly attributed to the Panama Canal expansion.

The Competitive Landscape: Benefits for Businesses

The intensifying competition among East Coast ports is proving beneficial for businesses. As ports vie for market share, they are continuously improving their services and infrastructure, leading to more efficient and cost-effective options for shippers.

Klaus Lysdal observes, “East Coast ports are preparing for larger vessels and improving their infrastructures to try to utilize their strengths and meet the anticipated demands of the future. And as carriers introduce even larger vessels to the Asia-Europe trade, they are starting to switch out these vessels to the Asia-US trade. This helps push prices down per unit, and I don’t think we will see this trend slowing any time soon.”

The major union strike in California a few years ago also played a role in this shift. It forced many Beneficial Cargo Owners (BCOs) to explore alternative routes to the US mainland, setting the stage for the opportunities now presented by the Panama Canal expansion and East Coast ports.

A Closer Look at Major East Coast Ports

Let’s examine some of the largest East Coast ports and their ongoing efforts to capitalize on these new opportunities:

1. Ports of New York & New Jersey

As the busiest port on the East Coast, the Ports of New York & New Jersey handle over one-third of the North Atlantic trade. Recent improvements include:

• Deepening the harbor to 50 feet
• Raising the Bayonne Bridge to accommodate ships up to 18,000 TEUs

Annual TEUs: 6,251,953

2. Port of Savannah

The Port of Savannah is undergoing significant upgrades, including:

• The Savannah Harbor Expansion Project (SHEP), set to be completed in 2020, will allow the port to handle 14,000 TEU vessels
• Improvements to its intermodal system to gain better access to Midwest markets

Port authorities estimate that these improvements could lead to up to 40% savings in transportation costs for US businesses.

Annual TEUs: 3,644,521

3. Port of Virginia

The Port of Virginia is investing $670 million in expansion projects, aiming to increase port capacity by 40% by 2020. Key projects include:

• Deepening the harbor by five feet, making it the deepest port on the East Coast
• Expanding rail and motor transportation infrastructure

Joe Harris, Virginia Port Authority spokesman, notes, “I think we are seeing that the ocean carriers and cargo owners are diversifying their logistics chains and using the East Coast. When you have 50 feet of water up and down the East Coast, we think it’s going to be a good thing for cargo coming here.”

Annual TEUs: 2,655,706

4. Port of Charleston

The Port of Charleston has seen consistent growth, with container traffic increasing by 8% annually since 2009. This growth is largely attributed to changing trade flows from Asia. Ongoing improvements include:

• Harbor deepening to accommodate 18,000 TEU ships, up from the current 14,000 TEU capacity

Annual TEUs: 1,996,282

The Role of FreightAmigo in Supporting East Coast Port Growth

As East Coast ports continue to expand and evolve, FreightAmigo is well-positioned to support freight forwarders and businesses in navigating these changes. Our Digital Logistics Platform offers a comprehensive suite of tools designed to streamline operations and enhance efficiency in this dynamic environment.

Here’s how FreightAmigo can help businesses capitalize on the opportunities presented by East Coast port growth:

• Comprehensive Quote Comparison: Our platform allows users to compare door-to-door freight quotes for various shipping methods, including sea freight options through East Coast ports. This feature enables businesses to find the most cost-effective and efficient routing options as new trade lanes open up.
• Real-Time Shipment Tracking: With connections to over 1000 reputable airlines and shipping lines, FreightAmigo provides real-time tracking for shipments. This is particularly valuable as businesses explore new routes through East Coast ports, ensuring visibility throughout the supply chain.
• Customs Clearance and Insurance: As trade volumes increase through East Coast ports, efficient customs clearance becomes crucial. FreightAmigo offers integrated customs clearance services and cargo insurance options, simplifying these processes for businesses.
• Document Automation: Our platform automates shipment documentation, reducing errors and saving time – a critical feature as businesses adapt to new shipping routes and regulations associated with East Coast ports.
• 24/7 Expert Support: Our round-the-clock logistics expert support ensures that businesses have the guidance they need when navigating new trade routes and port options.

By leveraging FreightAmigo’s Digital Logistics Solution, businesses can more easily adapt to the shifting landscape of US maritime trade, taking full advantage of the opportunities presented by the growth of East Coast ports.

Conclusion: A New Era for US Maritime Trade

The rise of East Coast ports marks a significant shift in US maritime trade patterns. Driven by strategic investments, the Panama Canal expansion, and changing global trade dynamics, these ports are increasingly positioning themselves as viable alternatives to their West Coast counterparts.

This transformation brings both challenges and opportunities. For businesses, it offers more options for efficient and cost-effective shipping routes. For the ports themselves, it demands continuous innovation and investment to remain competitive in an ever-evolving landscape.

As we look to the future, it’s clear that the growth of East Coast ports will continue to play a crucial role in shaping US trade. The ability of these ports to adapt to larger vessels, improve infrastructure, and streamline operations will be key to their success and the broader economic impact on the regions they serve.

In this dynamic environment, FreightAmigo stands ready to support businesses and freight forwarders in navigating these changes. Our Digital Logistics Platform provides the tools and insights needed to capitalize on new opportunities, optimize shipping routes, and streamline operations in this exciting new era of US maritime trade.

The rise of East Coast ports is not just a regional story – it’s a testament to the adaptability and resilience of the US logistics sector. As we continue to monitor these developments, one thing is clear: the future of US maritime trade is being reshaped, and East Coast ports are at the forefront of this transformation.