WEST coast ports saw US import volumes from Asia drop from 70 per cent in 2014 to 66.6 per cent in the first 10 months of 2019, PIERS data shows.
US west coast ports have lost market
share for five years due to expensive terminal leases, dock strikes,
high intermodal rail rates, and costly environmental regulation.
Now, port authorities say they are prepared to build the infrastructure
and implement the technology that is needed to reduce the cost of
handling cargo and speed up the flow of cargo, reported IHS Media.
"The only way to stay competitive is to operate more efficiently,?the
Northwest Seaport Alliance (NWSA) of Seattle and Tacoma's chief
operating officer Dustin Stoker told the DrayTech seminar in Long Beach
in June.
West coast ports ship two-thirds of their imports inland to the eastern
half of the US, but to be able to compete better with the east coast
ports, they need to make the transfer of containers from vessel to rail
and truck carriers more efficient and at a lower cost to beneficial
cargo owners (BCOs) than at present.
"We get the cargo off the ships is fine,?port of Los Angeles deputy
executive director of marketing Michael DiBernardo told the Propeller
Club of southern California in November. "Getting the cargo to the rail
and trucks out of the gate on time is how we will compete with the east
coast ports,?he said.
West coast ports compete for discretionary cargo from Asia with ports on
the east and Gulf coasts and with the Canadian ports of Vancouver and
Prince Rupert.
As manufacturing in Asia continues to migrate from China to Southeast
Asia, US west coast ports are expected to lose more market share given
that east coast ports are well-positioned geographically for all-water
services via the Suez Canal from Singapore and points west.
In the first 10 months of 2019, US imports from Asia to the west coast
fell by 3.2 per cent, while imports rose five per cent through the east
coast and 17.4 per cent through the Gulf Coast, according to PIERS.
Vancouver and Prince Rupert continue to expand their presence in the US
market at the expense of all west coast ports, but especially with
Seattle and Tacoma. Over the past five years, the two Canadian ports
expanded their share of US imports from Asia that via the Pacific
Northwest region of the United States and Canada from 58.2 per cent in
2014 to 63 per cent, PIERS said.
Terminal leases are generally higher on the west coast than on the east
coast. There are only three major gateways on the west coast ?Los
Angeles-Long Beach, Oakland and Seattle-Tacoma ?and they usually charge
market rates for their leases. On the east coast, a half dozen ports
from Florida to Boston compete for discretionary cargo, and they use
lease rates as a tool for attracting carriers' business.
Los Angeles and Long Beach have the most expensive terminal lease rates
in the country, at least twice the cost of other ports, according to
Pacific Merchant Shipping Association president John McLaurin. When the
cost of compliance with environmental regulations is added to port
charges, carriers, terminal operators and BCOs pay a premium for
shipping through the west coast, he said.
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