During a discussion presented by investment bank Stifel, Mr McCown noted that the east/Gulf coast share of container imports among the top 10 US ports has grown from 43 per cent in 2015 to 47 per cent this year. "I see that trend continuing to play out," he asserted.

Two factors are fuelling the transition: the expansion of the Panama Canal and location density of the US population, reported New York's FreightWeek.

"Ships [serving the east coast] are now 58 per cent larger than they were [prior to canal expansion]," he said. "That's changed the economics of moving all-water to the east coast. What used to be a really meaningful difference in the size of ships [calling at the west versus east coast] has been fully mitigated. The ships are now the same size.

"The cost of moving freight by water is geometrically less than moving it by land," he continued, estimating that it costs less than a US$0.05 per FEU per mile (FEU-mile), versus "easily $2 by truck and close to $1 by rail".

Ocean transport allows shippers to more cheaply move cargo to where their buyers are located. "If you look at the density of the US population relative to the coasts, it's simply a closer distance to the US east and Gulf coasts - 76 per cent of the population is closer to these coasts than to the west coast," he said.

"I don't think it's going to swing quite that far," he added, referring to the current 53-47 per cent west versus east/Gulf coast split.

"But we've been seeing a swing of 80-90 basis points per year in that direction [ie away from the west coast ports] over the past three or four years and that will continue for a multi-year period," Mr McCown predicted, noting that Long Beach and Seattle/Tacoma have been particularly hard-hit by the coastal transition.

The east and Gulf coast ports securing the most cargo growth in the years ahead are likely to be those that offer the best distribution centre (DC) options for cargo shippers, he believes.

A key advantage going forward will be availability of land for DCs and other facilities. The largest ports are "often located in very large cities and those cities have grown up around them," he said, noting that smaller up-and-coming ports such as Jacksonville, Florida are showing promise because they don't face the same land constraints.

Asked whether an end to the US-China trade war would shift the pendulum back to the west coast, he maintained that it would not. "I don't see it going back. I think it's a structural change," he said.

 

 

 

"Between the expanded Panama Canal and the bigger ships and the increased use of the Suez Canal from Southeast Asia, you're going to see more volume to the east coast. This will have an impact on both trucking and rail firms, and I think you will continue to see this transition play out for years to come.