More and more Asian shippers are routing their waterborne exports to the U.S. through ports in the Gulf of Mexico, notably Houston, in order to avoid the bottlenecks and congestion at other large U.S. gateways.
Ocean carriers are responding to the trend. In March Maersk launched a new trans-Pacific service with a string of 4,500 TEU vessels going to Houston. The carrier’s new TP28 service originates in Vung Tau, picks up cargo at Yantian, Ningbo, and Shanghai, and moves through the Panama Canal to serve the ports of Houston and Norfolk.
Last December Mediterranean Shipping tweaked its trans-Pacific Santana service, adding Houston to the routing and making it the first U.S. port of call. It moves from Haiphong via Shanghai and Ningbo to Houston and on to Charleston and New York before returning to Vietnam.
According to waterborne U.S. import and export data provider PIERS, U.S. imports of containers from Asia through the Gulf ports rose 27.2% last year to 1.14 million TEUs. The momentum carried into 2022 with a 27% increase in box traffic at the Port of Houston in January.
To some extent, container growth in Texas is the result of the presence of large retailers like Dollar Tree and Lowe’s that have distribution centers in the Houston area, but migration of Asian imports from the Pacific coast is a massive driver. The large U.S. West Coast ports remain the premier gateways for imports from Asia, but their share of this market continues to slide. It sank from over 70% of container imports 15 years ago to about 60% last year and has slipped further in the first two months of 2022.
The major factor behind last year’s decline was the congestion on the West Coast, especially at the port complex of Los Angeles and Long Beach, which accounts for about 45% of U.S. waterborne imports from Asia. The congestion eased in recent months, but there are fresh concerns about rising problems with rail capacity from the West Coast.
Dwell times of intermodal containers at Los Angeles and Long Beach have expanded lately, as Class I rail carriers Union Pacific and BNSF have been slow to ramp up rail cars, locomotives, and personnel serving the gateways.
By April 12 there were 16,000 containers waiting to be loaded onto trains at Los Angeles, the port authority announced. The situation prompted the U.S. Transportation Secretary Pete Buttigieg urged the rail companies to clear the backlogs, lest congestion gets out of control again in the run-up to the peak season.
Another reason for importers and shippers to look for alternatives to the West Coast ports is the impending start of contract negotiations between the longshoremen’s union and the container lines and terminal operators, which are set to get underway in May.
Both sides have expressed their desire to come to an agreement, but memories of bitter standoffs in previous negotiations that resulted in weeks of paralysis have prompted cargo owners to reduce their exposure to the West Coast.
Clients of SEKO Logistics have diverted traffic to East and Gulf Coast gateways, said Craig Grossgart, the forwarder’s senior vice president, global ocean.
The East Coast ports have been the prime beneficiaries of the migration of Asian imports from the West Coast, but this option has become less appealing in recent months as congestion has increased in the east.
Wait times for ships to get unloaded have got worse than on the West Coast. On April 5 there were 18 container ships waiting for berth space at the port of Charleston, while Norfolk counted 12 vessels at anchor off the port. Between them, Los Angeles and Long Beach had 16 ships in limbo at the time.
According to maritime analytics firm MarineTraffic, median wait times at Charleston had stretched to 9-10 days and 3-4 days at Norfolk, compared to less than four days at Los Angeles and under two days at Long Beach.
Bob Imbriani, vice-president of international services at Team Worldwide, said that congestion on the East Coast had deteriorated slowly to a point where it was becoming a major concern. Like other forwarders, Team has upped the amount of Asian import traffic that it routes through U.S. Gulf gateways.
Like major East and West Coast ports, Houston also had some ships waiting for berth space in April. The port authority has been scrambling to boost capacity. Port Houston executive director Roger Guenther declared that Houston is not immune to many of the challenges that the industry is dealing with, but that the port is facing them head on.
In February three new neo-Panamax ship-to-shore cranes arrived at the port’s Bayview terminal. The port has taken steps to accelerate expansion projects at the container facilities. It is adding yard space, opening additional gates, widening access roads, and developing its workforce pipeline.
More expansion projects are being readied. The U.S. administration’s infrastructure package is directing US$142.5 million to the port, providing funding for several undertakings, including the expansion of the two container terminals to accommodate 15,000-TEU class vessels.
By Ian Putzger
Correspondent | Toronto