top of page

As Gulf and East Coast Ports Seize a Larger Piece of the Pie,

Infrastructure Will Decide The Fate of the Supply Chain

As the ILWU-PMA labor dispute continues to drag on and cargo that was traditionally earmarked for West Coast ports continues to be re-routed toward East and Gulf Coast ports, it is becoming clear that shippers no longer need to be as reliant on West Coast gateways.


East and Gulf Coast ports have shown clear proof of their capabilities. According to data from PIERS, imports from Asia to Houston increased by 33.9% in the first ten months of 2022, and CNBC recently reported that New York processed more than nine million TEU last year, making 2022 its busiest year ever. In late 2022 and early 2023, New York handled more containers than LA for the first time ever. While the port of Los Angeles processed nearly ten million TEU in 2022, New York was the nation’s busiest port at certain times over the last twelve months.


Shippers have taken notice that East and Gulf Coast ports are reliable options for importing cargo, as CNBC also recently reported that more than one-third of logistics managers are unsure about whether or not they will use West Coast ports in the future, especially since the labor dispute remains unsettled. Additionally, MSC and Maersk have added Houston and Mobile to the carriers’ high-volume rotations connecting Asia and the US in response to the increased desire to ship to non-West Coast ports as well as the East Coast’s shorter distance to the end consumer.

“The dramatic shift to East and Gulf Coast ports will in all likelihood remain because of an industry-wide desire to establish more reliable and predictable logistics solutions that are able to withstand any major disruption,” said Anthony Fullbrook, President of OEC Group’s Northeast Region. “Unfortunately, infrastructure in the U.S. is currently not able to withstand a major disruption, meaning shippers still need to be vigilant and agile in their approach until significant port and inland improvements are made.”

There have already been increased improvements at ports along the East and Gulf Coasts. The Port of Charleston now has the deepest harbor on the East Coast, and the Port of Savannah also completed a major dredging project to allow it to take on some of the industry’s largest vessels. Additionally, a number of improvements have been made or are being planned around the Gulf region’s ports, including:

  • Creating extensive storage networks around Houston

  • Undertaking dredging projects at both Houston and Mobile

  • Expanding Norfolk Southern railways into Mobile

  • Using the Amtrak rail line to support freight in and out of Mobile

The Louisiana International Terminal (LIT) and Port NOLA transloading park are also planned.

“While it is great to see an urgent desire to make improvements to the U.S. infrastructure, the reality is more needs to be done quickly, which seems unlikely due to the fact that there is no central governing body to lead these critical initiatives,” said Jason Haith, Station Manager of OEC Group’s Louisville office. “Based on the current conditions I expect the strategy of proactively seeking out alternative strategies will become the rule rather than the exception and creating the ‘perfect supply chain’ will be a dream we all chase but never realize.”

514 views0 comments

Comments


bottom of page