Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

West Coast container ports have lost 19.4pc market share according to research commissioned by the Pacific Merchant Shipping Association (PMSA) from economist Jock O’Connell. 


The findings were drafted in a letter, signed by 52 trade associations, to California’s Governor Gavin Newsom. 


Imports in containerized tonnage have increased since 2010 and while import tonnage increased by 38-200pc, mostly led by tonnages from East Asia, West Coast ports volumes rose by13-23pc. The goods movement sector supports one in three jobs in California and $1.6mn other jobs in Southern California. 


The shift to the East Coast, according to PMSA, is attributed to the expansion of the Panama Canal, labor-management issues on the West Coast, port and goods movement industries and governments investing heavily on the East Coast, limited investments to promote international trade, and higher costs of doing business on the West Coast. 


Since the expansion of the Panama Canal in 2016, container shipments from the Pacific were able to transfer to Gulf and East Coast destinations. 


The research highlighted an increase of 191,176 twenty-foot equivalent units (TEUs) in 2019 compared to 2018 at British Columbia ports on the Western side and an increase of 352,846 TEUs in 2019 compared to 2018 at nine East Coast ports. The Gulf Coast ports of New Orleans and Houston also increased by 80,292 TEUs in 2019 compared to the previous year. In the same period, the West Coast ports of Los Angeles, Long Beach, and Oakland, California alongside Tacoma and Seattle, Washington decreased inbound containers by 668,980 TEUs.


The higher cost of doing business in California is attributed to costly environmental laws and higher regional labor costs negotiated by unions. West Coast ports have mandates closer to zero-emissions standards that place them at a disadvantage compared to other US ports. The PMSA letter requested Gov. Newsom to reexamine environmental, state, and regional regulations that are disincentivizing the use of California ports and sending business to ports that have less effective climate programs.


The Port of Long Beach decreased volumes by 6.9pc in the first half of 2020 to 3.4mn TEUs compared with the same period a year ago, while the number of moved cargo volumes at Port of Los Angeles fell by 17.1pc during the same period. The San Pedro Complex which houses both the Long Beach and Los Angeles ports had 104 canceled sailings in the first half of the year, more than double the 41 in the same period a year ago. The losses are attributed to trade war effects, ongoing pandemic, and shifting trends in final port destinations. 

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