Many U.S. ports saw the latest conflict between the ILWU and PMA as an opportunity to capitalize on the 13-month long shift away from the West Coast ports.
Many Gulf and East Coast ports have created, or are in the process of creating, critical infrastructure improvements to allow themselves to become not just viable alternatives to West Coast ports, but permanent gateway options for shippers to leverage when importing their goods.
Two ports in particular, The Port of Houston and the Port of Savannah, have been the most active in improving their infrastructure. Both have an eye on keeping the market gains they achieved due to pandemic-era conditions and the ongoing threat of a West Coast strike. During this time, the Port of Savannah completed a much-needed dredging project to widen and deepen the channel allowing for 16,000 TEU vessels to be able to access the port. Additionally, the port ordered 55 brand-new gantry cranes to expand their capabilities when handling higher capacity ships.
The Port of Houston is in the midst of a $1-billion dredging operation, called Project 11, to significantly widen and deepen the entire Houston Ship Channel from Galveston Bay to the Port of Houston. Leading the project is the Army Corps. of Engineers. When completed, the Port of Houston will be able to, for the first time in its history, allow unrestricted two-way traffic of the industry’s largest container ships – putting the port on par with LA-Long-Beach and New York-New Jersey in regard to handling container traffic.
Many of these so-called alternative ports benefitted greatly from the threat of a West Coast strike because shippers were forced to identify other points of entry in order to keep their supply chains flowing,” explained Anthony Fullbrook, President of OEC Group’s North American region. “While LA-Long-Beach is still the top port in the United States for container traffic, many shippers are starting to realize that importing through smaller ports offers less drama, and they have expressed their desire to continue to do so as long as they become more reliable. That necessitates further improvements to infrastructure.
While these improvements are a great sign, most U.S. ports need to look no further than Europe to understand that they are still far behind advancements occurring in other countries. For example, the Port of Antwerp-Bruges has already launched a brand-new sophisticated monitoring system featuring a network of cameras and digital radar equipment that break down all port operations into thousands of data points, allowing port leaders to accurately keep track of all meaningful information and guide further optimization. Additionally, the Port of Rotterdam has also launched an expansion project that will add 1.8 million TEUs of capacity, to the gateway’s Prinses Amaliahaven terminal.
Many of the ‘alternative ports’ still have a long way to go in order to be competitive and considered a threat to LA-Long Beach and other major West Coast ports,” said Steve Myers, Vice President of Operations for OEC Group’s Northeast Region. “While complete modernization can’t happen overnight, the ports that want to compete are taking the necessary steps to improve their infrastructure within the next six years—that’s when the ILWU’s next contract will likely expire. If significant improvements can be made, then these ports will not only be a viable threat to the West Coast ports, but they will also give shippers more options, making this something worth watching in the coming years.