Rumors of labor strikes and other supply chain disruptions are inspiring logistics executives to look toward the Eastern Seaboard. While West Coast ports remain dominant, JLL’s sixth annual Seaport Outlook shows rapid growth and demand for space by the nation’s ports on the East Coast.
“Shippers are turning to the Suez Canal to reach U.S. East Coast population centers,” said Rich Thompson, Managing Director of JLL’s Ports Airports and Global Infrastructure (PAGI) group. “This route helps offset the risks associated with potential disruption and costs associated with the Panama Canal and/or delays and potential disruptions at West Coast ports such as LA/Long Beach.”
“Last year was a banner year for shipping volumes, which were up by 3.3 percent on the previous peak seen in 2007,” he added. “Of the 13 seaports ranked in JLL’s report, the West Coast seaports volumes were 6.8 percent below 2007 peak levels, while shipping volumes on the East Coast exceeded 19.1 percent.”
Dain Fedora, lead researcher for JLL Industrial and author of the PAGI report, told LM in an interview that rail serves as the “barbells” connecting the nation’s seaports to domestic population centers.
“This land-bridge offers access to multiple population centers. It is also four times more fuel efficient than trucks, and eases roadway congestion,” he said. “As a result, many seaports are enhancing their on-and near-dock rail capabilities, while inland ports, such as the Southeast, are on the rise.”
According to JLL research, logistics suppliers and transportation providers are turning their focus to intermodal solutions to connect port cities with major population centers. To date, 30 inland port facilities have either opened or been formally announced since 2000, including 19 since 2008 alone.
A notable beneficiary is the Port of Savannah, which ships most of its cargo by rail to Atlanta and was ranked the “Fastest Growing Port” in the first half of 2014. Charlotte is also evolving as a hub market thanks to a new inland port connecting to Charleston.