West Coast Port Dominance Cracks As Containerized Flows Shift East
US importers are reevaluating where they ship goods into the US after decades of relying solely on US West Coast ports as a gateway to the Heartland. They're now betting that US South And East ports can offer reduced risk, time, and transportation costs.
The share of all US containerized cargo handled by Southern California's ports topped 40% over the last several decades as imports between the US and Asia surged. But the shifting winds in trade have forced importers to ditch Asia to Los Angeles and Long Beach routes and opt for end destination ports in Houston to the Mid-Alantic area.
Bloomberg explained more about the shifting trade winds :
"But it's getting supercharged by simmering West Coast port labor talks, the near-shoring of factory production amid rising tensions with China, and US population growth shifting to the Sunbelt states."
A combination of pandemic-era bottlenecks and negotiations between thousands of West Coast dockworkers nearing the one-year mark has been the most recent driving force for importers to rejigger supply chains to the South and East.
Inbound cargo volumes at the Port of Los Angeles have plunged from peak levels a year ago.
Some top importers, who once heavily relied on West Coast ports, are sending shipments to Gulf and East Coast ports, according to RILA, whose members include Best Buy Co., Target Corp., and Home Depot Inc.
Ports located in Savannah, Ga., Houston, and Charleston, SC, have all seen increasing containerized imports. Also, Mid-Atlantic ports, as well as New York-New Jersey ports, are experiencing more activity.
Importers are spreading out their supply chains. Many of them were devastated during the pandemic bottleneck in LA and Long Beach, which increased shipping time by weeks and sparked shortages of products at major retailers during the pandemic. Companies hope diversifying their port of entry in the US will avert future bottlenecks at ports.
The West Coast's dominance in containerized shipping is cracking. Supply chains are evolving, and importers are shifting to ports on the East Coast.