After several years of tepid global trade growth, the North American port sector is booming in 2017, bolstered by a strengthening U.S. and Canadian economy, which is reflected in higher demand for cargo imports, particularly from Asia.
After several years of tepid global trade growth, the North American port sector is booming. So far in 2017—both the calendar year and fiscal year—nearly every major seaport across the United States and Canada has seen massive swells in cargo volume, according to data detailing the ports’ respective container throughputs.
A big part of the reason for this is the strengthening of the U.S. economy, which is reflected in higher demand for cargo imports, particularly from Asia. According to the Global Port Tracker, a monthly report compiled for and distributed by the National Retail Federation (NRF), the 12 major U.S. retail container ports tracked by the report were forecast to handle 20 million 20-foot equivalent units (TEUs) of containerized import cargoes during calendar year 2017, which would be a a new high-water mark, topping the current record of 18.8 million TEUs by 6.3 percent.
The current record, which was set just last year, was already a 3.1 percent increase over 2015 import volumes, according to NRF data. The statistics demonstrate that the upward trend of higher imports has been building steadily for the past few years.
In the first half of 2017 alone, combined imports at the U.S. seaports tracked by the report—Los Angeles, Long Beach, Oakland, Seattle, Tacoma, New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades, Miami and Houston—totaled 9.7 million TEUs, up 7.5 percent from the same six months during calendar year 2016, according to NRF data.
Ben Hackett, founder and chief executive officer of Hackett Associates, the firm that produces the Global Port Tracker report for the National Retail Federation, called 2017 a “boom year for growth in import cargo volumes,” which “reflects strong growth in spending by U.S. consumers.”
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Individually, all of the top-10 ports in the United States by container volume, as well as Canada’s busiest seaport, reported handling increased container volumes during the first 10 months of the year compared with the same period a year prior. And those whose new fiscal year began in 2017 have also reported year-over-year increases in FY volumes thus far.
Record Pace. Leading the way in terms of cargo growth has been America’s largest and busiest seaport, the Port of Los Angeles, which through the first 10 months of 2017, saw the number of TEUs moved by its terminals jump 6.36 percent to 7.63 million TEUs, compared to 7.18 million TEUs during the same period in 2016.
During the first four months of Los Angeles’ current fiscal year, which began July 1, the port reported having 3.15 million TEUs cross its docks, a 3.55 percent increase over the 3.04 million TEUs during the equivalent timeframe in FY 2017.
In 2016, the Port of Los Angeles moved an already record-breaking 8.8 million TEUs, and when container throughput figures for all of 2017 are released in January, the port could wind up being the first-ever port in the Western Hemisphere to move 9 million TEUs in a single calendar year.
A little further south along the San Pedro Bay, at the adjoining Port of Long Beach, the first 10 months of 2017 saw a total of 6.23 million TEUs moved through the ports container terminals, a 9.5 percent increase over the 5.69 million TEUs handled during the same 2016 period.
“We’re on track to have our best year ever,” Long Beach Harbor Commission President Lou Anne Bynum said of the surging cargo volumes.
In October, the first month of the port’s 2018, fiscal year, and the latest month for which verified container numbers were available, Long Beach terminals moved 669,218 TEUs, a 15 percent jump over the 581,808 TEUs the port saw during the same month in FY 2017.
The United States’ third-busiest port complex, the Port of New York and New Jersey, reported handling 5.6 million TEUs through the first 10 months of 2017, which was a 7.8 percent increase over the 5.19 million TEUs during the same period in 2016.
In October alone, the port handled 588,848 TEUs (334,324 total containers), an all-time record for the month and a continuation of the positive growth trend throughout 2017.
Down in Georgia, the Port of Savannah, which bills itself as “America’s fastest growing port,” moved 3.41 million TEUs during the first 10 months of calendar year 2017, an 11.9 percent year-over-year jump. And for the first four months of its current fiscal year, which began July 1, its terminals have handled 1.42 million TEUs, up 155,050 TEUs (12.3 percent), from the same period a year ago.
Griff Lynch, executive director of the Georgia Ports Authority (GPA), attributed the meteoric growth in large part to the expanded third lane of the Panama Canal, which officially opened for business in mid-2016, allowing much larger cargo vessels to sail through the Central American waterway.
“We’re now handling more ships, bigger vessels and larger cargo exchanges,” said Lynch. “By working more weekly vessel calls than any other East Coast port, and serving more Neopanamax ships than any other port in the U.S. Southeast, Savannah has strengthened its position as a vital gateway to the global marketplace.
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“With deeper water, today’s 14,000-TEU ships will be able to transit the Savannah River with greater scheduling flexibility, and take on heavier export loads,” he added. “Because these larger vessels provide lower cost per container slot, they help make American farms and factories more competitive.”
According to GPA data, the Port of Savannah handled 8.5 percent of all U.S. containerized cargo volume and 10 percent of all U.S. containerized exports during its fiscal 2017 year.
Building Momentum. The next-busiest facility, the Port of Vancouver in British Columbia, Canada, moved a total of 2.6 million TEUs during the first 10 months of the year, a 9.8 percent increase from the 2.4 million TEUs it saw during the same timeframe in 2016, according to port data.
Historically, the port moves about 3 million TEUs per year. In 2016, the Pacific Northwest port reported a total throughput of 2.9 million TEUs, an amount that Vancouver was on track to exceed in late 2017.
In the first half of calendar year 2017, container volumes at the port rose 9.6 percent year-over-year to a record 1.6 million, and as of early December, throughput was still on pace to reach 3.2 million TEUs for the full year.
According to port officials, the volume increase from January through June of 2017 was the result of the strengthening economy in Canada, as well as global demand for Canadian products and Canadian demand for consumer and manufacturing goods from Asia.
“Our record mid-year container results demonstrate the continued confidence of shippers in the Port of Vancouver and our ability to handle the growing demand for goods shipped in containers,” said Robin Silvester, the president and chief executive officer of the Vancouver Fraser Port Authority, the entity that operates the port. “The long-term outlook for Canadian trade is one of growth and the Port of Vancouver is working hard to ensure we will be ready to handle increased volumes through Canada’s West Coast.”
In the U.S. Pacific Northwest, where the two largest seaports, located in Seattle and Tacoma, Wash., jointly operate as the Northwest Seaport Alliance (NWSA), containerized cargo volumes rose 3.5 percent to 3.06 million TEUs through the first 10 months of the calendar year, according to NWSA statistics.
Total international container volumes, including empties, rose 6 percent from the first 10 months of 2016 to 2.45 million TEUs. NWSA said in a statement that its year-to-date international volumes put the ports on pace to reach the fourth-highest yearly volumes in their history.
Across the country at the Port of Virginia, with two months left in 2017, volumes were nearly 8 percent ahead of the same 10 months the year before.
On a calendar-year basis, TEU volumes were up 7.9 percent at the mid-Atlantic seaport; total containers up 8.2 percent; rail up 4 percent; truck moves up 10 percent; and barge volumes up 28.5 percent from the prior-year period, according to data from the Virginia Port Authority (VPA).
The port authority is currently engaged in a plan to attract more cargo traffic by making various upgrades, including upgrading equipment and facilities at the Richmond Marine Terminal.
“Through our strong month-on-month performances, we are building our brand and reputation domestically and internationally,” VPA CEO and Executive Director John Reinhart said. “We know that next year, as we get into heavy construction… the industry and cargo owners will be watching. We continue to plan to ensure that we process volumes safely, efficiently and consistently, while focusing on mitigating any adverse impacts on the operation as construction progresses.”
Further to the south, the Port of Charleston has handled 1.83 million TEUs through the first 10 months of the calendar year, a 10.5 percent jump from 1.66 million TEUs the year before, according to statistics from the South Carolina Ports Authority. The port’s fiscal year-to-date TEU volume was up 4.8 percent, with 722,821 TEUs handled since FY 2018 began at the port in July, compared with 689,753 TEUs during the prior year period.
And down in the U.S. Gulf Coast region, container volumes at the Port of Houston grew 12 percent year-over-year to 2.05 million TEUs through the first 10 months of 2017, including 1.7 million loaded containers and 353,000 empties. During the same time period the year before, Houston handled 1.8 million TEUs, including 1.5 million full containers and over 328,000 empty units.
The Port of Oakland, which is in a somewhat unique position in the U.S. port sector in that it exports more containerized goods than it imports, handled 2.03 million TEUs of containerized freight through October—including imports, exports and empty containers—2.8 percent more than the 1.97 million TEUs handled the previous year.
By the time full-year numbers are released in January, the total amount could surpass the 2.37 million TEUs handled in 2016 and may even break the all-time record for Oakland of 2.39 million TEUs set in 2014, the port has said.
Additionally, officials at the Port of Oakland say its loaded containers were up 1.4 percent during the first 10 months of 2017 over last year.
“If this trend continues, we’ll set a new record for loaded containers since we broke the record last year with 1.83 million loaded TEUs,” port spokesman Michael Zampa told American Shipper.
The port also said its total container volumes for fiscal year 2018, which also began July 1, ticked up 2.8 percent compared with the first four months of FY 2017.
“We’ve been growing steadily,” Zampa said.
Bursting Bubble? As for what 2018 holds for the U.S. port sector, the Global Port Tracker report in November projected that the rate of import growth will slow from its breakneck pace next year.
According to the report, combined import volumes for the 12 major container ports for January 2018 are forecast at 1.66 million TEUs, down 1 percent from January 2017. And even though February is projected to see 1.59 million import TEUs at those same ports, a 10.9 percent gain from the same month in 2017, March 2018 is estimated at 1.5 million units, a year-over-year decline of 2.1 percent.
Those February and March volumes are more volatile and difficult to predict, according to the NRF, because of the Lunar New Year celebrations that will close many factories in East Asian countries for up to a couple of weeks beginning Feb. 16.
But despite some projected decreases and instability in import volumes during the first quarter of the year, the port tracker report’s authors say there’s no reason to believe that will be indicative of the year as a whole.
“We see no decline in volume and no recession,” Hackett said of his firm’s forecasts for next year, “just time out for a breather.”
With U.S. President Donald Trump continuing to favor protectionist measures and a reduction in bilateral trade deficits, there is still far too much uncertainty surrounding trade policy to know what effect that will have on global trade flows. But if U.S. economic growth continues to accelerate, spurring further increases in consumer spending, 2018 could turn out to be another banner year for the North American port sector.