Federal Maritime Commissioner Richard Lidinsky noted shippers diverted cargo to Canadian and Mexican ports to avoid port congestion on the United States West Coast.
Three years after the Federal Maritime Commission issued a report on “diversion” of cargo bound or originating in the U.S. through Canadian ports, an update from FMC Commissioner Richard Lidinsky says, “As a result of the congestion seen on the U.S. West Coast, 2014 was the most active year for cargo diversion.”
“We have seen that shippers are not going to stop diverting cargo through Canadian ports, and that Mexican ports continue to present another option for those individual shippers looking for alternative routes,” said Lidinsky in his report. “It remains to be seen whether this trend will continue in the future, though there are several indicators that 2014 is not an anomaly.”
Lidinksy writes, “Larger ships, new alliances, labor-management disputes, and equipment and trucking shortages have contributed to the already building congestion at U.S. ports, with the most severe effects on the West Coast. As a result, shippers have been diverting cargo to different routes and ports to lessen delays.”
The report lists Prince Rupert in Canada and Manzanillo in Mexico as the fastest growing ports in North America, followed by Boston, Charleston and New Orleans.
Last year, 79.9 percent of inbound North American container traffic came through U.S. ports, 11.1 percent through Canadian ports, and 9 percent through Mexican ports, according to the report.
But the growth rate at Mexican and Canadian ports — at 9.2 percent and 7 percent, respectively — outpaced growth at U.S. ports, which grew 6.1 percent in 2014 compared to 2013.
Prince Rupert, British Columbia, saw the number of containers it handled increase 18.5 percent over 2013 and the report estimates 61.8 percent of that cargo was destined for the U.S.
The report notes a plan was announced this spring to grow the capacity of Prince Rupert’s container terminal from 850,000 to 1.3 million containers.
Further growth may be coming as well, as DP World, the Dubai-based container operator has announced plans to purchase the container terminal in Prince Rupert and look at the feasibility of increasing capacity to 2.45 million TEU.
Container terminals in Vancouver, B.C. are also planning and making infrastructure investments in anticipation of handing more cargo in the U.S.
Intermodal rail and container trade in Mexico is growing and that cross border trade is likely to continue to grow, but the report cautioned, “Whether this will equate to an increase in cargo diverting to Mexico from the U.S. West Coast remains to be seen.”
The report notes Mexican ports face a geographic disadvantage when competing with U.S. ports for some Asian cargo. A ship from Shanghai, for example, takes four to five days longer to reach Lazaro Cardenas than Los Angeles, and the rail distance from Lazaro Cardenas to Chicago is 200 miles longer than from Los Angeles or Long Beach.
FMC: 2014 was most active year for U.S. cargo diversion
