Cargo Trends: Government steps up to diversify cargo gateways

Port of Everett, Washington
Port of Everett, Washington

LONG BEACH, December 8 – The Federal Maritime Commission, empowered by Congress to ensure a competitive and reliable international ocean transportation supply system, is stepping up its activities.

As part of their watch, two commissioners – Carl Bentzel and Louis Sola – recently took time to visit key ports along the US Gulf Coast, at New Orleans, Mobile, and Gulfport.

The FMC said the purpose of the trip was to evaluate the region’s inland distribution network and to review “alternate port options” for international container shipping.

The FMC said the Commissioners’ review of potential Gulf Coast shipping options is “consistent” with the on-going review mandated by Section 24 of the Ocean Shipping Reform Act of 2022 (OSRA).

OSRA demands decongestion

Section 24 of OSRA requires the FMC Chairman to convene a meeting of key stakeholders “to discuss the feasibility of, and strategies for, identifying Federal and non-Federal land, including inland ports, for the purposes of storage and transfer of cargo containers due to port congestion.”

On their journey, Commissioners Bentzel and Sola visited industry leaders in New Orleans, Mobile, and Gulfport, underlining their efforts and potential to help ease congestion in the national supply chain system and boost throughput.  

These are not gateways that are among the nation’s Top Ten ports, and that was the message that Bentzel and Sola wanted to convey in their review of alternate port options for international container shipping.

“Pandemic related congestion taught us that our supply chain needs to be prepared to implement contingencies,” Bentzel said, noting that the larger ports will always provide a “baseline of services” for the majority of the nation’s container shipping needs.

Better inland access needed

But he added that “a more sophisticated shipping network is evolving that will require more efficient inland access to large ports, and expanded use of alternative ports.”

According to the US Army Corps of Engineers, which monitors all waterborne traffic in the country, the nation’s Top Ten ports handle around 85% of its container traffic. That leaves 15% for the remaining 60 or so smaller ports in the country.

The importance of using a broader network of alternatives has been brought home in the past year as shippers – worried about congestion on the US West Coast – diverted their cargo to the Gulf and East Coasts.

The result, as noted by Port of Los Angeles executive director Gene Seroka, is that “while we have seen a huge segment of that cargo move to the East and Gulf Coast, at the end, we’ve also witnessed congestion there.”

The Port of Savannah is just one example of that displaced problem.  

Congestions shifts from coast to coast

In November, Georgia Ports Authority Executive Director Griff Lynch reported that “ships at anchor are trending downward and expanded berth capacity coming online next year will allow us to serve our growing customer base with even greater efficiency.”

While the Top Ten ports will be doing all in their power to improve their throughput capacity, the nation will also be well served by efforts to expand capacity in other gateways – especially when it comes to exports.

“We’re a consumer nation,” said Commissioner Sola, who noted there are “about three ports” in the country that have an approximately 50-50 balance of imports and exports, while the majority of them are “70, 80 or 90% imports.”

Even as the nation’s Top Ten ports vie with each other for greater amounts of cargo, the visit of the two Commissioners underlines the need for other ports – coastal and inland – to play a greater role in the supply chain industry.

Smaller ports are stepping up

But smaller ports aren’t waiting around for government directives to become active. Consider the Port of Everett in Washington state.

Just last week, Port of Everett officially opened the first all-new cargo terminal to open on the US West Coast in more than a decade – a $40m investment that adds 40 acres of new cargo capacity to the national supply chain.

Port of Everett chief executive Lisa Lefeber underlined the importance of the new facility, saying that “with most trade-compatible properties along our nation’s waterways already spoken for, it’s extremely rare to see an all-new cargo facility come online and add much-needed capacity to a strained logistics chain.”

Coos Bay, too

A little farther to the south, the Oregon International Port of Coos Bay received notification of a $10m award from the Department of Transportation through the Port Infrastructure and Development Program.

This project will aim at improvements to the rail line that stretches from Coos Bay to Eugene, Oregon, 121 miles away. There, the line interchanges in Eugene at the Union Pacific rail yard.

That enables inbound and outbound rail traffic from across the US and links Coos Bay to the wider world, adding extra capacity to the national supply chain.

The Top Ten ports needn’t worry about the competition. They have only their congestion to lose.

Photo: The Port of Everett Seaport. Courtesy Port of Everett