NY-NJ to capitalise on west to east coast cargo drift

SEVENTY per cent of all Asia-origin containers bound for destinations in the US north east hinterland are now carried on all-water services to the east coast, says the Port Authority of New York and New Jersey.

This is a situation that the port authority is hoping to capitalise on, particularly as total volumes to the US are in decline.

In a recent interview with The Container Shipping Manager, the Port Authority of New York and New Jersey's director of port commerce, Mr RM Larrabee, elaborated on the growing marketability of the east coast port call for destinations further into the US interior that were previously served via the west coast not so long ago.

Earlier it used to be 70 per cent mini land-bridge [via West Coast ports] and 30 per cent all-water route [via East Coast ports], in the 10 states all around us. Now it has reversed to 30 per cent mini land bridge, and 70 per cent all-water, Mr Larrabee said.

Rail services that connect east coast ports to all the major inland markets have played a key role in tipping the balance against the west coast ports. For example the Port of New York and New Jersey has been massively investing in a intermodal rail network to increase its connectivity beyond the north east. The port invested US$530 million by 2006 in building on dock rail facilities that are expected to improve the cargo fluidity to and from the port. Similar intermodal expansion has been slow on the west coast.

The initial flight of cargo from the west to the east coast ports has been compounded by factors such as inadequate capacity, congestion, strikes, high port and intermodal transport fees, rigid environmental standards and a lack of infrastructure development in recent years.

But even as congestion fears of congestion have dissipated on the west coast with slowing traffic, east coast ports like New York, are taking steps to improve intermodal infrastructure to ensure competitive prices for shippers.

I think all-water routes will continue to grow and take away market share from the west coast. I remember a shipping line telling us once that they hated the all-water services. It takes twice as much in terms of resources to support an all-water service but they don't make as much money. It's the shippers of the world that have now made the decision, Mr Larrabee said.

Bogged down by logistical and operational difficulties at west coast ports, shippers and carriers are now less fazed by longer transit times via the Suez Canal and the Panama Canal's draft restrictions that have traditionally worked against the east coast ports. While some doubt cargo drif will be phenomenal others say it will intensify with the completion of the Panama expansion in 2012.

Source: CSM