Eastern shipping ports are now busier than West Coast ones

The ports of Los Angeles and Long Beach unloaded a million fewer containers off ships last year than they did in 2021. The Port of New York/New Jersey, meanwhile, handled a surplus of half a million containers—exceeding the throughput of its Southern California counterparts for the first time in decades.

Prolonged negotiations between the Pacific Maritime Association and the International Longshoreman and Warehouse Union have even prompted fears of port shutdowns along the West Coast, according to a report from Marcus & Millichap, one of the nation’s top commercial real estate brokers.

That and increased tension in business relationships with China has led eastern ports to fund expansion programs. In 2022, record cargo tonnage entered the ports of Savannah and Charleston, necessitating public investment to enlarge the shipping yards. A $410 million project is underway at the port of Savannah that will expand its cargo capacity by more than 50% by 2025.

Twenty years ago, some 80% of transpacific cargo entered the United States through ports on the West Coast. That has since dropped to 56% as eastern ports continued to enlarge. China’s growing practices of “nearshoring” manufacturing in Latin American nations to reduce shipping costs to the U.S. could continue to buck up eastern ports, maintains Marcus & Millichap.

As a result, third-party logistics firms that accept and ship retail cargo, have been competing for available distribution parcels near maritime hubs in the Southeast. Marcus & Millichap recorded record deal flows for industrial space in Charleston.

High land costs in the heavily populated zones around the Port of New York/New Jersey have justified the construction of multi-story warehouses, something that started prior to the health crisis. Owners of existing properties in high-demand locales may choose to redevelop if long-term growth remains robust, predicted the report.