Creating Resilience
North American Cargo Volume Rebounds
Port Watch Series Q1 2024
June 10, 2024 5 Minute Read
Q1 Container Volume Increased Year-over-year
First-quarter 2024 cargo container volume at the 14 major North American ports tracked by CBRE increased by 15% year-over-year. The increase was led by West Coast ports (19.7%), even though the Lunar New Year, which fell this year at the end of March, typically slows trade flows from Asia.
Francis Scott Key Bridge Collapse Impacts East Coast Ports
The late March collapse of Baltimore’s Francis Scott Key Bridge severely disrupted The Port of Baltimore at the end of the quarter. Most cargo activity has been diverted to ports in New York/New Jersey and Virginia, which has strained their capacity. Port of Baltimore is expected to resume activity soon, but full restoration could take months.
East and Gulf Coast Labor Contracts Set to Expire This Fall
Approximately 45,000 dockworkers’ labor contracts are set to expire at the end of September. This involves the contract between the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX), covering 36 East and Gulf Coast ports, including major hubs like Savannah and Houston. Negotiations began in February 2023, but the risk of a significantly disruption to already-strained U.S. supply chains in October is high.
Q1 Cargo Container Volumes
- U.S. container volume has mostly surpassed pre-pandemic levels, but monthly fluctuations have occasionally dipped below 2019 figures. Despite a year-over-year increase in Q1, economic concerns affecting consumer spending could impact trade this year.
- Lázaro Cárdenas, Mexico, had the highest year-over-year container volume increase (34.7%) in Q1. Benefiting from the nearshoring of manufacturing operations, this Pacific coast port offers easy access to the U.S. market via land and sea. Increased EV production has made its dedicated vehicle-handling terminals crucial for nearshoring manufacturers.
- Canada’s Port of Montreal (down 2.4%) was the only North American port to see a 20-foot equivalent unit (TEU) volume drop Q1.
Figure 1: Q1 Cargo Container Volumes
U.S. Seaport, Inland Port & Non-Port Market Fundamentals
- Industrial vacancy rates rose across all three port types in Q1. Both inland port and seaport markets rose 50 basis points (bps) to 6.5% and 5.1%, respectively. Non-port markets rose 60 bps to 5.7%.
- Seaport markets with the lowest vacancy rates: Los Angeles (2.6%), South Florida (4.0%), Portland (4.2%) and San Diego (4.6%).
- Port markets with the most Q1 net absorption: Chicago (4.9 million sq. ft.), Houston (4.4 million sq. ft.), Atlanta (4.1 million sq. ft.), Dallas (4.0 million sq. ft.) and Savannah (2.3 million sq. ft.).
SPOTLIGHT: Port of Savannah
- In Q1, the Port of Savannah handled 1.3 million TEUs, an 11.1% year-over-year increase.
- The port spans 1,345 acres. As the third-busiest U.S. container gateway, it handles millions of tons of containerized cargo annually.
- Top imports include furniture, retail consumer goods, machinery, appliances and electronics. Imports mainly originate from Mainland China, South Korea, Germany, Japan and the U.K.
- These same countries as well as France and the Netherlands are top destinations for exported goods. Top exports include wood pulp, paper, food and clay.
History
The Port of Savannah, established in 1733 alongside the city’s founding, launched the first Atlantic-crossing steamship, the SS Savannah, in 1819. The Georgia Ports Authority (GPA), which develops, maintains, and operates ocean and riverports in Georgia, was formed in 1945. The Port of Savannah accommodates many cargo types, with its primary terminal, the Garden City Terminal, able to handle vessels over 16,000 TEUs. Recent improvements to Berth 1 at the terminal will add 1.5 million TEUs of annual capacity, ensuring efficient cargo transport between the port and global markets.
Sustainability
The Port of Savannah acknowledges its environmental responsibility and strives to reduce its carbon footprint. It promotes cleaner-burning fuels for cargo vessels and port equipment and has invested in shore power hookups for docked ships to use cleaner electricity.
Additionally, the GPA has joined Green Marine, North America’s top voluntary environmental certification program for the maritime industry. This program helps participants exceed environmental performance regulations, focusing on community relations, biodiversity protection, and air, water and soil quality.
Looking Ahead
The GPA has heavily invested in port infrastructure to support the state’s thriving business sector. Future plans include a $4.5 billion investment over 12 years to enhance container-handling. The Garden City Terminal West expansion, set to finish this year, includes developing an extra 90 acres for a container yard, increasing the annual TEU capacity by 1 million. Additionally, the GPA plans to invest $65.6 million to transform the Ocean Terminal into a dedicated container facility by 2026. This will increase its capacity to 2 million TEUs annually, solidifying the Port’s significant role in global shipping.
Port Fact
The Port of Savanah’s Garden City Terminal is North America’s biggest single-container terminal, efficiently handling the largest operating container ships. It’s a significant economic driver for Georgia and the Southeast, generating over 250,000 jobs statewide.
North America Seaport Cargo Statistics
Figure 2: Container Activity | Q1 2024
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Cargo container volumes at the 14 major North American ports tracked by CBRE are returning to pre-pandemic levels after falling by 18.6% year-over-year in the first two quarters of 2023.
Contacts
James Breeze
Vice President, Global Industrial and Retail Research
John Morris
President, Americas Industrial & Logistics
