East vs. West
For the past two years, we’ve been covering the efforts of East and Gulf Coast ports to get ready to receive the big cargo ships that will be heading their way when an expanded Panama Canal opens for business in 2014. The completion of the $5-billion canal expansion will coincide with the 100th anniversary of the waterway that cuts across the Isthmus of Panama. It’ll enable huge post-Panamax container vessels to travel directly to Atlantic and Gulf ports instead of offloading their cargo on the West Coast and transporting it across America.
The Panama Canal expansion is expected to bring billions in new shipping revenue to coastal ports in the East and South. The conventional wisdom has assumed that as East and Gulf Coast ports reap this bonanza, a corresponding reduction in traffic will take place on the West Coast.
Well, it now appears that at least two of the biggest ports on the Pacific side of the country don’t plan to give up all that moolah without a fight.
WT100, the supply chain trade pub, reports that the ports of Los Angeles and Long Beach — two of the busiest shipping hubs in the nation — have laid down a marker that says they still intend to compete for every container load heading to the U.S. from the Far East.
According to the report, both southern California ports are upgrading to ensure their infrastructures can handle the largest ships for decades to come. West Coast port officials acknowledged that fierce new competition from the East is looming once the canal expansion is complete.
“It would be foolish not to take a new competitive threat seriously,” Kraig Jondle, director of business and trade development for the Port of Los Angeles, told WT100. “But we already have competition from [other] North American West Coast ports. We see the Panama Canal expansion as just an additional competitive threat.”
Los Angeles and Long Beach are stressing their advantages, which they say can’t be matched by Gulf and East Coast ports. These include speed to market, which is defined not only by the shorter distance of the trip from Asia by sea to the West Coast, but also by the fact that almost every port in Asia has a vessel bound for a Southern California port on a daily basis. Therefore, inventory is not sitting at the port of origin waiting for a vessel.
Manufacturers can ship cargo from Shanghai, the world’s largest port (in tonnage and containers), to a Southern Californian port in 13 days, WT100 reports. The marine terminals at the ports of Long Beach and Los Angeles handle more than 30,000 truck transactions a day and more than 100 trains leave each port daily. By train, cargo can get to Chicago in four days.
The 17-day Shanghai-to-Chicago transit time using Southern California compares with the 28 days it takes for the same destination using an all-water route to an eastern port via the Panama Canal. Ships that offload in Southern California are headed back to Asian ports by the time a ship can travel through the Panama Canal destined for a Gulf or East Coast port.
Union Pacific and BNSF Railway also are busy building double-tracks from the West Coast to Chicago, El Paso, Texas, and Memphis, Tenn., to reduce transit times. Five of the six container terminals at Long Beach are equipped with on-dock rail and seven of the eight docks at Los Angeles have on-dock rail.
Also, WT100 reports, large importers such as Wal-Mart, Kohl’s and Target have major distribution centers and warehouses in Southern California, allowing them to transport their product in trucks and trailers to the western United States in one or two days.
So get ready for a transcontinental Fight of the Century between the nation’s greatest shipping hubs. With props to Muhammad Ali (who probably would have rhymed it better), let’s call it the Rumble in the Harbor.
May the best port win.
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