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U.S. port competition for containers to increase

A study commissioned by a commercial real estate group forecasts growing competition for business among ports on the East and West coasts.

A new study examining global manufacturing and supply chain trends predicts that competition for containerized trade will intensify among U.S. ports. The report, issued by the NAIOP Research Foundation, a group that focuses on issues affecting commercial real estate, concluded that U.S. ports currently are operating below their combined capacity. As a result, competition will increase between ports on the East and West coasts of the United States.

To reach that conclusion, the report's authors examined global manufacturing and consumption trends to anticipate future container flows. They noted, for example, that manufacturing in the United States is expected to continue its decline as companies shift production of goods with high labor content to countries with low labor costs. China is forecast to out-produce the United States for the first time in 2011, manufacturing an estimated $1.87 billion of goods compared to $1.71 billion for the United States.


Although U.S. containerized imports measured in TEUs (20-foot equivalent units) were down by 17 percent in 2009, imports are expected to grow by 8.2 percent in 2010, the report said, citing predictions from the research firm IHS Global Insight. This expected uptick should drive demand for more warehousing and distribution space near ports, the report added.

Two "x" factors (unknowns) could play a major influence in port competition and the demand for increased distribution space near ports. The first is the extent of the continued flight of U.S. manufacturing to other countries. The second is the shift of cargo landings from the U.S. West Coast to East Coast ports that will likely occur as importers take advantage of the expansion of the Panama Canal in 2014 to move goods entirely by water to the eastern United States.

The report, "Trends in Global Manufacturing, Goods Movement and Consumption, and Their Effect on the Growth of United States Ports and Distribution" is available here.

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