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Are Gulf Coast Ports Good Various to Congested East & West Coast Ports for Importing from China?

Some shippers are Gulf Coast ports just like the Port of Houston as attainable alternate options to the severely congested ports alongside the East and West Coasts. Port congestion like we’re seeing on the nation’s largest ports by TEU strikes, such because the Ports of Los Angeles and Lengthy Seaside on the West Coast and New York and New Jersey on the East Coast, not solely prices shippers time however cash. Are Gulf Coast ports the reply?

Common Cargo has definitely discovered different routes for shippers importing or exporting items over time to keep away from pricey conditions like congestion, labor slowdowns, strikes, and lockouts at numerous ports. Nevertheless, that doesn’t imply switching ports, particularly when that change contains switching coasts, is essentially at all times the reply to main congestion issues like we’re seeing.

Components That Might Dissuade from Switching Ports

Switching to a Gulf Coast port could also be possibility for sure shipments of some shippers, however there are a lot of causes it could not make sense for different shippers or shipments. There are lots of such attainable causes, however listed here are the few that stand out probably the most:

  • Further trucking and rail prices or challenges
  • Fewer or costlier delivery routes to alternate ports
  • Smaller different ports unable to deal with inflow of quantity being rerouted

Shippers Turning to Port of Houston

Gulf Coast ports are growing their market share of imports from Asia proper now. With the horrible congestion we’re seeing on the Ports of Los Angeles and Lengthy Seaside, America’s largest port advanced by way of delivery containers of imported items – particularly from China – dealt with, it is smart that shippers would flip to alternate options.

Noi Mahoney wrote an article for American Shipper that highlights a somewhat giant importer exploring the Port of Houston as an alternative choice to the Ports of Los Angeles and Lengthy Seaside in addition to New York and New Jersey for importing from Asia:

Austin, Texas-based cooler and drink ware producer Yeti (NYSE: YETI) is testing Port Houston as an alternative choice to the Port of Los Angeles and Lengthy Seaside or Port of New York/New Jersey for importing its shipments from Asia, based on Paul Carbone, Yeti’s CFO. 

“We’re seeing some elongated wait instances coming by the ports within the strategy of shipments,” Carbone stated throughout Financial institution of America’s 2021 Shopper and Retail Expertise Convention on March 9. 

To mitigate wait instances and provide chain dangers, Carbone stated Yeti is cross-docking its shipments, utilizing some totally different delivery lanes, and utilizing quicker delivery lanes out of Southeast Asia “to chop down on the transport time.”

“Lastly, we’re testing some different ports, however we haven’t even began that,” Carbone stated. “Port Houston is correct down from our Dallas-Fort Value distribution middle. So we’re going to ship some ships into there; it’s a smaller port, we don’t need that to get overrun. So we’re testing that.”

For Yeti, the Port of Houston makes specific sense with the corporate being Texas-based. Would Port Houston make as a lot sense for importers and exporters nearer to the Ports of Los Angeles or New York or extra direct rail routes from these ports? It probably nonetheless might, however rail charges have been growing in addition to trucking charges with the delivery demand enhance we’ve seen during the last six-plus months and the trucker scarcity drawback the trade faces. These components, together with issues like charges and instances on ocean freight routes to the Port of Houston, must be fastidiously thought-about in opposition to charges and congestion points at different ports shippers might have beforehand most well-liked using.

Mahoney does record different main shippers using the Port of Houston proper now:

Different retailers that make the most of Port Houston as an import gateway embody Walmart (NYSE: WMT), IKEA, Ross Shops Inc. (NASDAQ: ROST) and Lowe’s Corporations Inc. (NYSE: LOW).

Small to medium shippers might not be capable to management the ports they make the most of nor regulate their logistics for switching ports as simply because the above talked about giant corporations. Nevertheless, some smaller shippers might have extra flexibility than bigger corporations, not having to undergo as a lot paperwork and crimson tape because the bigger corporations do. When delivery by Common Cargo, shippers can discuss by their choices with their account managers.

Port Houston & Others Value Contemplating

The Port of Houston can also be the biggest U.S. port on the Gulf Coast. It persistently ranks within the nation’s prime ten largest ports by way of cargo quantity. In actual fact, relating to overseas waterborne tonnage, Port Houston ranks primary within the nation, one thing it boasts on its web site:

The Port of Houston is a 25-mile-long advanced of almost 200 personal and public industrial terminals alongside the 52-mile-long Houston Ship Channel. The eight public terminals are owned, operated, managed or leased by the Port of Houston Authority and embody the final cargo terminals on the Turning Basin, Care, Jacintoport, Woodhouse, and the Barbours Reduce and Bayport container terminals.

Every year, greater than 247 million tons of cargo transfer by the better Port of Houston, carried by greater than 8,200 vessels and 215,000 barges. In 2019, the port achieved the number one rating in complete waterborne tonnage in the US and nonetheless ranks 1st within the U.S. in overseas waterborne tonnage; 1st in imports; 1st in export tonnage and 1st in complete vessel transits

Nonetheless, how a lot market share Port Houston might effectively deal with taking from ports on the East and West Coasts is tough to inform. Nevertheless, it definitely has not skilled the form of congestion we’re seeing on the Ports of Los Angeles and Lengthy Seaside and may very well be a viable possibility for some shippers trying to escape congestion and the delays and prices they’ve suffered consequently.

Different ports on the Gulf Coast value wanting into embody the Port of Corpus Christi and the Port of South Louisiana. The staff at Common Cargo is at all times prepared to assist shippers take into account their choices and optimize their importing and exporting practices.

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