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There were winners and losers as the busiest cargo ports across North America and South America competed in 2018 to accommodate big ships — and even bigger trade policy changes
There was a time when the Americas (or North America and South America combined) was a major geographic inconvenience for ships needing to sail east from Asia to Europe. The Panama Canal helped change that when it opened in 1914 — coincidentally, just days after the start of WWI — making the journey much faster and economically viable. Today, 105 years later, the Americas play a larger role economically than geographically. But for ports up and down North and South America, both factors impact who’s winning business.
Last March we published our first Top 15 Ports in the Americas list ranking ports across the region according to 2016 TEU (Twenty-foot Equivalent Unit) totals, the most recent available at the time. This year, 2018 figures are in and — wow! — what a difference two years makes! Megaships and port investments … as well as tariffs and trade wars … have clearly had an effect: only 5 ports remained in the same position in 2018 as they were in 2016, with everyone else moving up or down 1-2 places (with one port falling an astonishing 5 places!).
So here is our list of the top 15 ports across North and South America, ranked by 2018 total combined inbound and outbound TEU volume, as reported by the ports and other available sources:
#1 Port of Los Angeles & Port of Long Beach
17.55 million TEUs (combined)
The ports of Los Angeles and Long Beach are completely separate entities that compete for business. But for the purpose of this list, we’re listing them as a single combined port as we did last year. This gives a more accurate picture of the massive volume of cargo that passes through the #1 and #2 busiest ports in the US. Combined, they would represent the 9th busiest port in the world, as well as the busiest port non-Asian port (officially, Dubai enjoys that distinction, with 15 million TEUs handled in 2018).
Of the two ports, the slightly smaller Port of Long Beach grew the fastest by a wide margin, reporting 11.4% growth in 2017, and an additional 7.2% in 2018, with a volume of 8.1 million TEUs last year (Long Beach was the 21st busiest port in the world in 2017). Meanwhile, its larger sibling across the San Pedro Bay, the Port of Los Angeles (#1 in the US and 17th worldwide), grew a healthy 5.5% in 2017 but a mere 1.2% in 2018 with 9.46 million TEUs. LA actually saw a 4.4% decrease in the first 5 months of 2018. Last year in general, US West Coast Ports lost trans-Pacific business to Canada and Mexico (thanks to increasing tariffs) as well as to US East and Gulf Coast ports (thanks to the newly expanded Panama Canal: read Location, Location, Location to learn more about how port selection is critical to supply chains). Still, it’s clear that at least some of Long Beach’s gains came at the expense of the Port of LA. As for 2019, the outlook for both ports is uncertain, with a combined 10.2% dip in February 2019 over February 2018. Again, increased tariffs on Chinese goods are cited as the main cause for the decline (although East Coast ports were up 3.3% over the same time period).
#2 Port of New York & New Jersey
7.18 million TEUs
The Port of New York & New Jersey is the busiest US port on the East Coast, and growing. In order to accept New Panamax 14,000 TEU+ “megaships”, authorities spent some $1.3 billion USD to raise the Bayonne Bridge in 2017, increasing clearance from 151 ft to 215 ft. This upgrade, terminal improvements, and better coordination with labor, along with a general shift towards East Coast ports (read Mega Ships from Asia are Transforming East Coast Ports) led to a cargo throughput increase of 7% in 2018. With growth, improving and maintaining fluidity is the challenge. A new rail project is planned, but time will tell if the port is able to handle the increased demand or become a victim of its own success.
#3 Port of Savannah
4.35 million TEUs
After a 2.5% decrease in port volume in 2016, the Atlantic Port of Savannah, Georgia, saw 11.4% growth in 2017 and 7.6% growth in 2018. Some 78% of its imports are from Asia, increasing 61% over the last 5 years (2013-2017), whereas 16% of its imports come from Europe, up 54% over the same period. In February the port announced it intends to improve its megaship handling ability and expand its intermodal capacity to speed up delivery to inland destinations such as Memphis and Chicago by as much as 2 days.
#4 Port of Colón, Panama
4.33 million TEUs
The Port of Colón is on the Caribbean side of the Panama Canal; as such it was first in line to benefit from completion of the canal expansion in 2016. By that year, some $8 billion USD in recent infrastructure improvements had also been implemented, so despite an 8.9% decline in 2016, traffic was up nearly 20% in 2017 and another 11.1% in 2018 (the highest percent increase of any port on this list). This moves the port up two places on this list and makes it the busiest port in LATAM (Latin America) and the Caribbean. Meanwhile the Port of Balboa, its Pacific-facing counterpart, suffered the opposite fate: it fell 5 places on this list.
#5 Port of Santos, Brazil
4.22 million TEUs
Long holding the title of the busiest port in South America, over the last few years the Port of Santos has weathered a national recession, access and distribution issues, labor strikes, and a devastating trucker’s strike (read our full article here). But after a 4.8% decline in 2016, the port came back in 2017 and 2018 with 13.6% and 9.6% growth respectively. This was enough for it to maintain the 5th spot on this list, pulling ahead of NWSA but getting edged out by the Port of Colón. In recent months, a temporary terminal closure due to bankruptcy has cast a shadow over the port, as have ongoing labor strikes and complaints about its bunkering services, so it will be interesting to see if the port is able to maintain its impressive growth trend through 2019.
#6 Northwest Seaport Alliance
3.8 million TEUs
The Northwest Seaport Alliance (NWSA) in Seattle/Tacoma, WA was one of only two ports in the US that experienced a growth in exports in 2018 (the other was Houston). With annual growth in total cargo volumes at NWSA pegged at about 2.5% for the last 3 years, its steady-as-she-goes increases weren’t enough for it to hold onto the #4 spot on this list. However, Q1 2019 total volume was up 11.1% over Q1 2018. And with four new super-post-Panamax container cranes installed in March, plus a $500 Million USD expansion of Terminal 5 in Seattle to handle ultra-large container ships getting the green light in April, we’ll see if NWSA has what it takes to sustain its double-digit start through the rest of 2019.
#7 Port of Vancouver, British Columbia
3.4 million TEUs
The Port of Vancouver is Canada’s busiest port. It’s an important gateway for Asian imports into both Canada and the US, particularly for goods bound for the Midwest, thanks to strong intermodal transportation options and lower fees than NWSA to the South (read our full article about the Port of Vancouver here). It’s also benefiting from higher US tariffs. After a 4% decline in 2016, the Port of Vancouver bounced back 11% in 2017 and grew an additional 4.4% in 2018 to move up one position on this list. Looking forward, investments continue at the port and officials estimate that it will be 10 years before it reaches full utilization.
#8 Port of Manzanillo, Mexico
3.1 million TEUs
The Port of Manzanillo is the busiest port in Mexico. This Pacific facing port saw 8.8% growth in 2018 after growing nearly 10% in 2017. It and the Port of Veracruz, also in Mexico, were two of only 5 ports in North America that saw increases in exports in 2018, according to JOC3, (the others were NWSA and Houston as mentioned earlier, as well as Prince Rupert in British Columbia). Loaded cargo volume across all Mexican ports was up 8.7% in 2018, compared to 7.7% for the entire LATAM/Caribbean region (meanwhile US and Canadian ports were up 4.5% and 4.8% respectively). A strong US economy combined with robust demand for Mexican products — and again, fallout from US trade policy — caused volume at the port to surge at the end of 2018 and into 2019. (Read our full write-up on the Port of Manzanillo here).
#9 Port of Virginia
2.86 million TEUs
The Port of Virginia is the third-busiest US East Coast Port after NY/NJ and Savannah, GA. Growth in 2018 was anemic at 0.52%. However, this was after 7% growth in 2017 and marks its 8th consecutive yearly increases, up 62% since 2009. In February 2019 the port received six new rail mounted gantry (RMG) cranes, the first delivery of 86 new cranes representing a total investment of $217 million USD.
#10 Port of Cartagena, Colombia
2.75 million TEUs
The Port of Cartagena, located on Colombia’s northern Caribbean coast, is only 306 miles (495 km) NE of the Port of Colón, Panama. As such, it’s benefiting from the expanded Panama Canal: after a 3.9% decrease in 2016 (the year the canal expansion was completed), the port enjoyed 9.2% growth in 2017 and another 7.4% in 2018. Recent delivery of six Super Post-Panamax Gantry cranes has the port accepting vessels in excess of 14,000 TEUs, and a $200 million USD investment by APM Terminals is set to triple APM’s terminal capacity. Demand for the port’s transshipment services is also expected to increase. However, a serious competitor is emerging 532 miles (856 km) to the North: the Port of Kingston, Jamaica, which thanks to recent improvements saw cargo volumes grow to a record 1.8 million TEUs, a 17.5% YOY increase.
#11 Port of Houston
2.7 million TEUs
The Port of Houston move up two places on this list, seeing the greatest cargo throughput increase of any port in the US for the last two years: 12.7% in 2017 (imports increased 22%) and 9.8% in 2018. Gulf Coast ports such as Houston are also benefiting from the shift away from West Coast ports, thanks again to the Panama Canal. Texas’ large, growing population (the second largest in the US) and strong economy are also positive factors. Looking forward, Houston is set to ride a wave of polyethylene resin exports, claiming the lion’s share of an estimated 1 million TEUs annually destined for China. What could go wrong? Threatened retaliatory Chinese tariffs are casting a shadow over all exports, including resin. Also, impending legislation prompted by non-container port users to limit the number of 9,500+ TEU ships to just once per week could seriously threaten the port’s growth. If not, then the port will have to continue to address a host of issues that come with rapid growth: a lack of warehouse space, strained intermodal capacity, etc. (For more information about the Port of Houston, read 9 Reasons Houston Should be Your Company’s Gateway to Latin America).
#12 Port of Balboa, Panama
2.66 million TEUs
The Port of Balboa, located on the Pacific side of the Panama Canal, has long been an important transshipping port for trans-Pacific routes. Lately, however, not so much: the port has the dubious distinction of being the only port on this list that saw a decrease in total port traffic — 10.8% in 2018 — causing it to fall 5 places on this list. It seems that a fair amount of transshipment business is shifting to Caribbean ports since the 2016 canal expansion. However, 2018 marks the port’s 4th consecutive year of negative growth (falling from a high in 2014 of 3.47 million TEUs) so clearly the canal isn’t the only factor to blame.
#13 Port of Oakland
2.55 million TEUs
The Port of Oakland grew 5.2% in 2018. While this wasn’t enough to hold on to 11th place, it was impressive considering that the port had to face many of the same issues in 2018 as other US West Coast ports. The Port of Oakland has focused on a host of improvements designed to better cater to the needs of BCOs — not just adding terminal capacity and super-sized cranes — such as developing a new 180-acre cargo logistics hub, increasing refrigerated warehousing space, and improving rail infrastructure. Last year the port implemented the first phase of Oakland Portal, its single-window initiative providing vessel schedules, cargo status, and live camera views of port roadways.
#14 The Port of El Callao, Peru
2.34 million TEUs
The Pacific port of El Callao is about 9.5 miles (15km) from the center of Peru’s capital city Lima and is the largest port in Peru. Also located in El Callao is the 5th busiest freight airport in LATAM, the Jorge Chávez International Airport. Although rarely making international news, other than for the occasional story on Peru’s illicit drug trade, upgrades to the port starting in 2008 are paying off: the port quietly broke the 2 million TEU barrier in 2016 (for which it should have made this list last year, but was missed). With 9.8% growth in 2017 and 4% growth in 2018, it’s the 3rd busiest port in South America and one to watch as Peru continues to enjoy a positive trade balance (it had a $6.84 billion surplus in net exports in 2017).
#15 South Carolina Ports
2.32 million TEUs
South Carolina Ports joined the 2+ million TEU club in 2017 after a 9% increase in cargo volume over 2016. 2018 saw an additional 6.4% increase. The port is an attractive option for Mid-West bound cargo thanks to two new inland rail terminals added in 2013 and 2017 which have dramatically improved intermodal cycle times. The South Carolina Ports Authority (SCPA), together with the state, plan to invest an additional $2 billion USD into the port, adding 1.4 million TEU capacity and additional cranes, upgrading its Wando Terminal to accommodate three 14,000 TEU vessels simultaneously by 2020, and increasing harbor depth to 52 feet by 2021, which will make it the deepest harbor on the US East Coast. So while South Carolina Ports may be last on this list, it’s certainly not least.
2019 and the look forward
Worldwide cargo volumes are predicted to increase in 2019 to 4.8% from 4% in 2018. All but four of the ports on our list matched or outperformed 4% in 2018, with more than half growing 7% or more. In 2017, when the global growth average was 5.6%, the top 10 performing ports on this list did 9% or better, with 6 hitting double digits.
So if this trend continues, Americas region ports should do well this year, thanks to a strong economy both in the US and worldwide. Port improvements initiated in the last couple years continue to come online, improving capacities and efficiencies, as ships get bigger, harbors get deeper, and cranes get taller. Beyond that, there’s plenty of room for improving intermodal, logistics, IT, and labor coordination.
However, accelerating trade wars are generating uncertainty. As things stand, US exports are expected to plummet in 2019. In the short term, ports in Canada to the North and LATAM to the South will most likely benefit from increased Asian imports, but longer term a lot will depend on how US consumers react as tariffs begin to translate into higher retail prices.
In any case, we’ll be watching the TEUs to see who moves ahead and who falls behind in 2019.