East Coast ports including New York are winning a domestic trade war at the expense of California

The authoritative instrumentality number whitethorn not beryllium out, but the Port Authority of New York and New Jersey tells CNBC it volition beryllium the No. 1 larboard moving the astir containers successful the U.S. for the 4th period successful a row.

Unresolved larboard labour negotiations and the AB5 trucking instrumentality — which concerns the employment presumption of drivers — person migrated commercialized distant from the West Coast to the East Coast and Gulf ports, cementing what seems to beryllium with each period a much apt imperishable shift, and benefitting not lone the ports but East Coast warehousing arsenic good arsenic the 2 ample railroads that work the ports, CSX and Norfolk Southern. According to ITS Logistics which monitors obstruction cargo trends, the measurement of freight moving retired of the East Coast doubles that of the West Coast.

"The larboard is moving highly hard connected making it the astir charismatic larboard for water carriers and cargo shippers," Richard Cotton, the enforcement manager of the Port Authority of New York and New Jersey, told CNBC.

There are a assortment of reasons wherefore commercialized is being diverted, but Cotton said the connection that shippers and cargo carriers are sending is besides astir diversification. "They don't privation to person each their eggs successful 1 handbasket truthful what we spot happening successful presumption of the diminution of different ports, is that overmuch of it has travel to the Port of New York and New Jersey," helium said.

"The Atlantic Ocean portion volumes are precocious erstwhile again, arsenic shippers proceed to debar the West Coast owed to the uncertainty of the IWLU declaration negotiations," said Paul Brashier, vice president, drayage and intermodal astatine ITS Logistics.

The International Longshore and Warehouse Union and Pacific Maritime Association (which represents the terminals and water carriers) person been engaged successful a labour quality for overmuch of this year.

New York first topped California successful cargo measurement successful August.

While measurement remains debased connected the West Coast, the elevated water dray connected the East Coast started backmost successful January, "when each of the fume astir IWLU started," Brashier said. "And honestly, we can't spot these trends changing successful 2023 until there's a solution connected that contract," helium added.

East Coast ports making large investments

East Coast ports similar Georgia, Virginia and Maryland person been expanding their concern to accommodate the summation successful obstruction capacity. The Port of Virginia is presently deciding if it volition unfastened a 2nd inland port. This semipermanent infrastructure concern is attracting water carriers similar MSC that has announced plans to physique caller terminals astatine the ports of New Orleans and Baltimore.

"What is attracting the commercialized is the semipermanent investments the East Coast and Gulf ports are making to conscionable today's commercialized demands," said William Doyle, enforcement manager for the Maryland Port Administration "Our premix of public-private partnerships person resulted successful the investments of the Howard Street Tunnel, investments astatine our Seagirt Marine instrumentality terminal and Dundalk Marine Terminal (berths and connected dock warehousing), and dredging. This is conscionable the beginning."

Private assemblage concern and authorities backing person besides fueled larboard concern successful Georgia. The Mason Mega Rail Terminal is simply a $220 cardinal task for the Georgia Ports Authority. At 85 acres and 18 moving tracks, the obstruction gait is present the largest of its benignant for a larboard terminal successful North America.

"The expanded infrastructure doubles the Port of Savannah's erstwhile obstruction capableness to 2 cardinal twenty-foot equivalent instrumentality units per year, and allows Georgia Ports to amended service large inland markets specified arsenic Atlanta, Birmingham, Chicago, Memphis, Dallas, and New Orleans," said a Georgia Ports Authority spokesperson.

The Port Authority of Virginia tells CNBC it does not spot immoderate lull successful aboriginal investments.

"We determination much than one-third of our full cargo measurement by obstruction and with our investments, we judge we tin propulsion that fig to determination adjacent 40 percent," said Stephen Edwards, CEO and enforcement manager of the Virginia Port Authority. "We're creating a superior obstruction cognition – on-dock, double-stack and served by some of the East's Class I carriers -- that reaches heavy into galore of the Midwest's accepted manufacturing and colonisation centers."

Edwards added they are besides adding landside capableness and capability, transmission depth, and spot much backstage concern successful Virginia by larboard users – logistics companies, warehouses, organisation centers, manufacturing, etc. Total investments successful their rails, terminals, and widening and deepening of Norfolk Harbor is $1.4 billion.

Cotton besides was assured that New York's gains volition beryllium lasting, particularly aft 5 years of investments.

"If you comparison today's show to anterior years, it has perfectly stayed astatine an bonzer level supra the anterior years. We are not seeing the diminution the different ports are seeing," helium said. "The larboard volition proceed to acceptable records for the remainder of the twelvemonth and we deliberation that inclination volition continue. There whitethorn beryllium seasonal declines, but the larboard is hitting connected each cylinders."

CSX said it cannot supply instrumentality volumes since the ports support and people the data, but it is seeing maturation successful the question of containers.

"CSX continues to spot the East Coast ports arsenic a maturation accidental arsenic volumes displacement from congested West seashore gateways," said Cindy Schild, CSX spokesperson.

Broad assets are underway, she said, to grow each aspects of larboard instrumentality handling capableness crossed the Eastern seaboard (e.g., on-dock obstruction capableness increases, inland larboard investments, caller marine terminals, and terminal expansions, dredging, arsenic good arsenic adjacent dock transload facilities.) 

"All of these developments volition payment CSX. There is simply a precocious grade of correlation betwixt larboard TEU throughput and our intermodal, arsenic good arsenic carload, obstruction volumes," Schild said, adding that involvement from larboard authorities and different stakeholders successful inland larboard instrumentality initiatives are besides connected the rise.

The instauration of inland ports tin alteration rails including CSX to link to planetary markets different served by trucks.

"The improvement of inland ports has an added payment for larboard authorities and communities by alleviating congestion and reducing emissions from motortruck postulation astatine port, arsenic good arsenic efficiently expanding wide larboard throughput capacity," Schild said.

 Norfolk Southern told CNBC it is primed to instrumentality vantage of this commercialized shift. 

"Strategic corridor investments and the opening of a twelve caller intermodal facilities since 2014 person created the capableness and productivity to enactment measurement maturation connected our network," said  Ed Elkins, enforcement vice president & main selling officer. "As the planetary system becomes adjacent much reliant connected the East Coast for proviso concatenation needs, we spot a large anticipation for smart, sustainable growth."

Cargo volumes connected the West Coast remained brushed astatine the Port of Los Angeles successful November, which saw a 21% alteration twelvemonth implicit twelvemonth successful volumes. Overall, the larboard moved 7% little cargo successful the archetypal 11 months of 2022 compared to past year, which was an all-time record. 

"Imports into the United States person begun to level off, successful summation to cargo that has shifted distant from West Coast ports owed to protracted labour negotiations," said Port of Los Angeles Executive Director Gene Seroka during a media briefing connected Thursday. "In the months ahead, we're going to person to enactment harder and smarter to gain cargo back. Every ship, each train, each motortruck needs to beryllium handled with the top-level work our customers expect and deserve."

The inclination of commercialized continuing to determination to the Port of New York and New Jersey implicit Los Angeles tin beryllium tracked successful FreightWaves SONAR charts, which shows the incoming vas capacity.

The Port of Long Beach processed 588,742 twenty-foot equivalent units (TEUs) past month, down 21% from November 2021. Imports slid 28.4% to 259,442 TEUs. Exports accrued 13.8% to 124,988 TEUs.

"While immoderate import measurement has shifted to different gateways, we are assured that a bully information of it volition instrumentality to the San Pedro Bay," said Port of Long Beach Executive Director Mario Cordero. "As we determination toward normalization of the proviso chain, it's clip to refocus our efforts connected engaging successful sustainable and transformative operations that volition unafraid our spot arsenic a person successful transpacific trade."

During the archetypal 11 months of 2022, the Port of Long Beach has moved 8,589,553 TEUs, down conscionable 0.5% from 2021, which was the port's strongest twelvemonth connected record.

While the East Coast gains are significant, determination was a "leveling" disconnected of imports detected connected the East Coast successful November, according to larboard TEU information from the CNBC Supply Chain Heat Map.