In just five years, a single Asian port—Singapore—will have more container capacity than the current throughput of all U.S. ports combined. This one startling projection, part of a recent U.S. Department of Transportation (DOT) report to Congress, reveals the severity of the problem facing American supply chains.

Increased Traffic Ahead

Like their West Coast brethren, Atlantic ports, with their increasing share of Asian imports, are bracing for cargo volume expected to double by 2020, if not sooner. Many East Coast ports of all sizes—including New York/New Jersey, Charleston (S.C.), the Port of Virginia, Jacksonville (Fla.), Port Everglades (Fla.), Baltimore, Philadelphia, and Camden (N.J.)—have experienced either double-digit growth or record cargo during the past two years.

And while cargo levels do fluctuate somewhat due to economic conditions (as illustrated by frequent bottlenecks in 2004 vs. relatively smooth operation in 2005), no one disputes the long-term trend of substantial growth. According to the DOT, in the next decade all major Atlantic ports are likely to see an increase of at least one-third over current cargo volumes. At today’s growth rates, every region of the country will experience shortfalls in port capacity by 2010.

Infrastructure Issues

Among the ports’ chief concerns are the adequacy of cargo staging areas, road and rail access to ports and channel dredging. Increasing staging capacity is difficult because of the scarcity, expense and environmental constraints of waterfront real estate. Congestion on antiquated road and rail connections is a serious problem in the metropolitan areas of the busiest ports. And channel dredging has lagged in recent years, despite the fact that a new generation of deep-draft container ships looms on the horizon.

While some ports are undertaking ambitious capital improvements, four years of security mandates (with limited federal funding) have diverted millions of dollars from capacity and modernization projects.

Cargo Congestion Requires New Strategies

Without proactive measures, supply chain managers face almost certain bottlenecks and shipment delays down the road. Cargo congestion is not an issue that resonates with lawmakers, so businesses and associations must lobby hard for more federal funding, especially for port security, dredging and connectivity upgrades. (The transportation bill passed in August devotes less than 1 percent of its $286 billion to projects related to ports and trade corridors.) The U.S. intermodal system also must take a fresh look at short sea shipping, which presents many advantages for cargo mobility.

Importers and exporters can mitigate delays by investing in improved cargo tracking technology and implementing greater lead times. As imports begin to outstrip capacity at preferred ports, supply chain managers may even consider directing shipments through lesser-used ports farther from markets, including some in Canada and Mexico. While each option carries its own cost, so does the prospect of ships anchored at sea, waiting for space at the docks.

This article appeared in October 2006. (CM)

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

More Articles | Speaker Programs | Speaker Demo | Videos | Services

You don't have permission to view or post comments.

Quick Search

FREE Impact Analysis

Get an inside perspective and stay on top of the most important issues in today's Global Economic Arena. Subscribe to The Manzella Report's FREE Impact Analysis Newsletter today!