(May 20, 2016) - A larger share of seaborne cargo deliveries shifted eastward last year, pushing the Port of New York and New Jersey up one spot to No. 2 in an annual seaport and logistics ranking by CBRE Group.
In a new report, the real estate services firm said East Coast and Gulf Coast seaports made gains against their West Coast counterparts, due largely to labor issues in the West. That helped bring record volumes to the Port of New York and New Jersey in 2015, with those terminals handling 6.4 million TEUs, a measure of container volume known as 20-foot equivalent units, for a 10.4 percent jump from 2014.
With that volume, along with local population density, project population growth, rail lines and other factors, New York and New Jersey climbed to second in CBRE’s North American Seaports and Logistics Index. The ranking also considers the number of container terminals, low water channel depth, total number of cranes and total number of post-Panamax cranes.
The Port of Long Beach grabbed the top spot from the Port of Los Angeles, CBRE said, due mostly to the arrival of a new Asian shipping line in Long Beach. But most of those regions that rose in the Top 10 are East and Gulf Coast seaports.
“Companies today are facing monumental supply chain pressures due to changing consumer behavior and a need to balance cost and service while keeping their business safe from interruption,” Adam Mullen, occupier and supply chain leader in CBRE’s Industrial & Logistics division for the Americas, said in a prepared statement. “Recent shifts in port volumes as companies strain to determine their best global shipping routes underscore that global commerce is in a race — an arms race of sorts — to build better, even more efficient supply chains.”
The ranking comes the port continues to drive leasing activity in the red-hot northern New Jersey industrial real estate market. CBRE found that the submarkets directly adjacent to the port — namely, the Hudson waterfront, Newark, Linden/ Elizabeth and Carteret/Avenel — absorbed 3.87 million square feet in 2015, while availability continues to fall and rents continue to rise.
“The ports continue to be a primary economic engine for the tri-state region and this is particularly true for the New Jersey industrial real estate market,” said William Waxman, CBRE executive vice president of industrial and logistics. “Certainly, the expansion of the Panama Canal will be beneficial to not only the tri-state region, but to the surrounding area as well.
“While I don't want to downplay the Panama Canal, I would certainly keep my eye on freight coming through the Suez Canal as well as a potential shift in manufacturing to South America and other regions that may be positively impact East Coast ports.”
In 2015, industrial developers delivered 3 million square feet of new product to the New Jersey market, while breaking ground on another 6 million square feet, CBRE said. Newly delivered speculative industrial projects have been leased up six months after completion, on average, and the brokerage firm said it expects tenants to continue to flock to new buildings.
The activity comes as the Port Authority of New York and New Jersey implements a $4.3 billion capital plan to invest and upgrade existing port infrastructure. The most high-profile project is the raising of the Bayonne Bridge deck by 64 feet in order to allow larger cargo ships to reach terminals at Port Newark-Elizabeth.
The bridge project is expected to be finished by mid-2019, CBRE said.
The Port of Los Angeles, last year’s top port in the CBRE ranking, fell to No. 3.The Port of Savannah climbed two spots to No. 4 and the Port of Houston jumped five spots to No. 5.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
