PORTS of New York and New Jersey are gaining container traffic over the heavy weight ports of Los Angeles and Long Beach ahead of pending new lane of locks at Panama Canal by 2014.
New York and New Jersey harbour volumes rose four per cent in 2011 ending November with 5.06 million TEU while its west coast rivals Los Angeles increased slightly by 0.99 per cent to 7.29 million TEU while its neighbour, Long Beach, dropped 3.3 per cent to 5.55 million TEU.
West and east coast harbour interests have been rivals in securing funding for dredging and infrastructure. New Jersey's Port Newark-Elizabeth Marine Terminal has started a project to raise its Bayonne Bridge by 64 feet to provide bigger vessels air draught to access navigation channel to their berths at US$1.3 billion. Preliminaries are estimated to begin spring 2012.
The $600 million ports rail programme, ExpressRail System, has created dedicated rail facilities - and additional support track and rail yards - for each of the port's major container terminals.
Newark's port authority chairman David Samson said it believes it will win the Midwest in general, and Chicago in particular, by rail. "That's a prediction that we will win that market by rail, and that is our objective."
A shift for using east coast ports via Panama started to avoid the congestion at South California ports, clean truck programmes costs and long distance rail and road connects to the east. Companies are targeting the east flow where most of the cargo is intended, a zone said to run from a line east of Chicago to Dallas, where 80 per cent of American consumers live.
"It used to be, everything [from Asia] landed on the west coast and got here by rail," said Michael Morrow, vice president of New York-based trucking and warehouse operation Judge Organisation.
The "line of demarcation" is predicted by some to move west driving more business east and capturing more of the Midwestern market but transit times against costs will be the deciding factor, said NJ-based supply chain industrial group Jones Lang LaSalle boss Bob Silverman.
"How much less will it cost to bring a container from Asia to the east coast through the canal? Will the Panama Canal Authority increase tolls? Will West Coast ports and railroads respond with lower rates?" Mr Silverman asked. In terms of timing, transit to New York is about 22 days at 20 knots from China with three to five days added to get shipments to a distribution facility, so around 27-day total. Shipment to California ports from China is 12 days, seven days by rail, then some three to five days to distribution, which at 24 days is slightly faster.
Much will be dependent on the economics of larger vessels said Bayonne's container terminal CEO James Devine which expects a moderate rise in volume of four to five per cent. Lowering costs on a per TEU basis will mean more competitive east coast direct rates to the customer.