Creating Resilience
Labor Dispute Drives Surge in North American Cargo Volume
Port Watch Series Q3 2024
December 11, 2024 5 Minute Read
Companies Boost Inventory Ahead of Port Workers Strike
Fears of a prolonged dock workers strike at East and Gulf Coast ports led companies to dramatically increase their inventories in Q3, driving a 16% year-over-year increase in North American cargo volume. However, the strike was short-lived, closing those ports for only three days in early October. West Coast ports had the biggest increase in cargo volume of 19%.
Hurricanes Disrupt East & Gulf Coast Port Operations
East and Gulf Coast ports also faced significant disruptions due to hurricanes, including the ports of Savannah, Houston and New Orleans. These disruptions caused ripple effects across U.S. supply chains, delaying cargo shipments and creating backlogs at alternative ports. Industries like manufacturing and retail that rely on time-sensitive imports were most affected, particularly those selling perishable foods. Retailers faced significant challenges to secure adequate inventory ahead of the holiday season.
The hurricanes also highlighted the need for enhanced resilience planning at port facilities.
Q3 Cargo Container Volume
- North American container volume remained robust in Q3, continuing to surpass pre-pandemic levels. While many companies are expected to boost inventories in Q4 ahead of potential tariffs in 2025, this front-loading of imports will result in a sharp slowdown in trade growth as businesses reach warehousing capacity and eventually adjust their supply chains.
- Concerns over a softening economy and disruptions from extreme weather events likely will compound these challenges and may further temper overall trade momentum.
- Ongoing reshoring and nearshoring trends continued to drive growth in North American container volume, as certain companies moved production closer to the U.S. to reduce reliance on overseas supply chains. This shift, driven by the manufacturing and technology sectors, has strengthened trade with Mexico and Canada, enhancing regional supply chain integration.
- Montreal was the only North American port to see a year-over-year drop in container volume.
Figure 1: Q3 Cargo Container Volumes
U.S. Seaport & Inland Port Real Estate Fundamentals
- Industrial vacancy rates rose across both port types in Q3. Seaport markets had a 30-basis-point (bp) increase to 6.0%, while inland port markets had a 20-bp increase to 6.8%. The overall vacancy rate of non-port markets increased by 40 bps to 6.5%.
- Seaport markets with the lowest vacancy rates were Los Angeles (3.8%), Fort Lauderdale (4.6%), Northern Virginia (4.8%), Northern New Jersey (5.2%) and Portland (5.4%).
- Port markets with the most year-to-date net absorption in Q3 were Houston (16.9 million sq. ft.), Dallas (16.2 million), Chicago (10.7 million), Atlanta (8.8 million) and Savannah (8.0 million).
SPOTLIGHT: Port of Houston
- The port handled 3.1 million TEU cargo containers through Q3 2024, a 10% year-over-year increase.
- The port spans 52 miles along the Houston Ship Channel and includes eight public terminals, making it one of the largest port complexes in the country.
- Top imports include machinery, retail consumer goods, electronics, motor vehicle parts and apparel. Top exports include chemicals, petroleum products and agricultural goods. Top trading partners include China, Vietnam, India, Mexico, Brazil and Germany.
History
The Port of Houston, established in 1914, is one of the North America’s largest ports. Its origins trace back to the early 19th century when barges moved goods across Buffalo Bayou to the Gulf of Mexico. Over the years, the port has expanded its cargo facilities, including the opening of the Barbours Cut Terminal in 1977 and the Bayport Terminal in 2006.
Port Houston owns and operates eight public facilities along the 52-mile Houston Ship Channel, including the area’s largest breakbulk facility. It is the Gulf Coast’s largest container port, handling 73% of total Gulf Coast container traffic.
Sustainability
Port Houston has a goal to be carbon neutral by 2050 and has already reduced its carbon footprint by 55% since 2016. Initiatives include the implementation of renewable electricity and the development of 27 new environmental, social, safety and governance initiatives. The port recently received a $3 million EPA grant to reduce diesel emissions and create green jobs.
Looking Ahead
Port Houston is focused on expanding its infrastructure and enhancing operational efficiency to accommodate growing trade volumes. Plans include installing smart lighting at its facilities and improving gate and navigation efficiencies. The port is also exploring opportunities to expand its trade routes and attract new cargo business, reinforcing its position as a vital gateway for U.S. trade.
Port Fact
Port Houston is a major economic driver for the Gulf Coast region, serving as a crucial hub for international trade.
North America Seaport Cargo Statistics, Q3 2024
Figure 2: TEU Container Activity | Q3 2024
North America Seaport Cargo Statistics, YTD 2024
Figure 3: TEU Container Activity | YTD 2024
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First-quarter 2024 cargo container volume at the 14 major North American ports tracked by CBRE increased by 15% year-over-year.
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2023 North American Cargo Volume Returns to Pre-Pandemic Levels
March 20, 2024
Q4 2023 cargo container volume at the 14 major North American ports tracked by CBRE increased by 1.6% year-over-year.
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Third quarter cargo container volume at the 14 major North American ports tracked by CBRE declined by 10.7% year-over-year after reaching record highs in 2022.
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Contacts
James Breeze
Vice President, Global Industrial and Retail Research
John Morris
President, Americas Industrial & Logistics
