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Top North American Ports Volume Drops by 20%

Port Watch Series Q1 2023

June 13, 2023 5 Minute Read


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Container volume ebbs in Q1

Q1 2023 total container volume at the top 13 North American ports fell by 20% year-over-year to 12.3 million twenty-foot equivalent units (TEUs). Houston was the only one with increased container volume in Q1, up by 3.4% year-over-year. Los Angeles had the biggest decrease, down by 32%. Total West Coast container volume fell by 24% and East Coast volume was down by 18%. While rising interest rates, high inflation and less consumer spending contributed to the drop in container volume, seaport activity levels are normalizing.

Inflation falls to lowest level in two years

Falling U.S. inflation bodes well for increased container volume in coming quarters. The Consumer Price Index fell to 5.0% in March, the lowest level in two years. Food prices were up by 8.5%, while energy prices fell by 6.4%. Gasoline prices were 17.4% lower than a year ago. However, U.S. GDP increased by only 1.1% annualized in Q1.

Investing in the future

The federal government is investing billions of dollars in U.S. port infrastructure modernization to reinforce supply chains. Funding includes a $400 million grant program for port electrification and efficiency improvements to reduce air pollution.

Image of port dock

Sizeable Drop in Q1 Container Volumes

Most U.S. ports had year-over-year declines in container volume, led by Los Angeles (-31.5%) and Long Beach (-30%), This is not a surprise as many shippers relied on East and South Coast ports in early 2022 to avoid West Coast port backups.

Houston was the only port with a year-over-year increase in Q1 container volume (3.4%). Both Houston and the Port of Savannah have greatly benefited from shippers turning to alternative routes for cargo distribution to avoid supply chain disruptions.

Record-high container volume in 2022 was the result of strong consumer demand. But as consumer sentiment wanes this year, demand is beginning to normalize. The ports of Los Angeles, Long Beach and New York/New Jersey all have lower container volumes from a year ago, which are nearing pre-pandemic levels.

Figure 1: Q1 TEU Volume Comparisons

Image of bar graph

Source: Various Port Authorities, CBRE Research, Q1 2023.

U.S. Seaport, Inland Port & Non-Port Market Comparisons

Industrial vacancy rates rose across all three port types in Q1, with the inland ports recording the biggest increase by 60 basis points (bps) to 4.2%. The overall vacancy rate for seaport markets rose by 30 bps to 3.0%, while the rate for non-port markets increased by 40 bps to 3.3%.

Seaport markets with the lowest vacancy rates were Savannah (0.6%), Charleston (0.7%), Los Angeles (1.3%) and Portland (2.3%).

Non-port markets had the most combined Q1 net absorption totaling 35.2 million sq. ft. The Pennsylvania I-78/81 Corridor posted the highest amount at 7.1 million sq. ft.

Source: CBRE Research, Q1 2023.

SPOTLIGHT: Port of Los Angeles

  • Los Angeles has ranked as the nation's No. 1 container port for the past 23 years and is the busiest seaport in the Western Hemisphere.
  • The port spans 7,500 acres along 43 miles of shoreline and has a main channel depth of 53 feet that accommodates the largest container ships.
  • San Pedro Bay provide access to both the Port of Los Angeles and the Port of Long Beach. The two combined are the world’s fifth busiest port complex.
  • The top containerized imports at both the ports of Los Angeles and Long Beach include furniture, auto parts, apparel, plastics, footwear and electronics.
  • Collective bargaining negotiations between West Coast port authorities and their dock-workers have continued since the previous labor contract expired last year. Despite no agreement yet, the Port of LA remains open, though it has been subject to occasional work slowdowns and other delays.

The Port of Los Angeles was founded in 1907 to serve the city’s growing population. The port became a center of international trade with the opening of the Panama Canal in 1914. During World War II, it facilitated the building and repair of U.S. Navy vessels. In the late 1950s, cargo containers replaced crates and pallets, providing more efficient cargo-handling operations.

Protecting the environment by using new tech-nologies and upgrading facilities is one of the port's top priorities. In 2006, both the Port of Los Angeles and the Port of Long Beach enacted the San Pedro Bay Ports Clean Air Action Plan to dramatically improve air quality in and around the ports.

A Look Ahead
The Port of Los Angeles plans to completely have zero-emission cargo-handling equipment on all docks by 2030 and zero-emission heavy-duty truck traffic by 2035. Overall demand for industrial real estate is expected to remain positive with new developments coming to market. The Inland Empire is on track for 33 million sq. ft. of net absorption this year.

Port Fact

The top five trading partners by cargo value at the Port of Los Angeles are China/Hong Kong, Japan, Vietnam, Taiwan and South Korea. Record-high trade at the port in 2022 included $27 billion in imports and $2.4 billion in exports.

Image of a port and bridge

Figure 2: TEU Container Activity, Q1 2023

Source: Various Port Authorities, CBRE Research, Q1 2023.

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