Port Concentration

Port Concentration

Container traffic in the United States tends to be highly concentrated and is becoming even more so as the use of larger, faster, and more specialized vessels call the ports that are capable of handling them. Because the larger cranes, berths, and storage yards; advanced information technology; and additional dredging needed to accommodate this demand requires significant investments, the limited number of ports that have expanded their investments has resulted in concentrations of container traffic at these facilities.

The standard measure for counting containers is twenty-foot equivalent units (TEUs). This measure is used to count containers of various lengths. A standard 40-foot container equals 2 TEUs, while a 48-foot container equals 2.4 TEUs.

The top 10 U.S. container ports accounted for 85 percent of U.S. containerized traffic in 2005 (measured in TEUs), up from 78 percent in 1995 (table 2). Five of the top 10 container ports in the United States are on the west coast, four are on the east coast, and one is on the gulf coast (table 2). Between 1995 and 2005, the ports of Los Angeles and Long Beach grew the most in terms of absolute level of container traffic, reflecting increased U.S. trade with Pacific Rim countries. The ports of Savannah, Los Angeles, and Houston had the highest average annual growth rates (table 2). The growth rates for Savannah and Houston reflect the expansion in U.S. container trade with Latin American countries and changes in shippers’ decisions on how to move their cargo. For example, in order to limit the impact of port terminal or waterway closures for weather-related and other reasons, some shippers and carriers have included redundancy (e.g., multiple distribution center locations and additional vessel calls) in their supply chains and vessel rotations.

Between 1995 and 2005, oceanborne containerized cargo handled at the Port of Savannah increased by 13 percent, making it the fastest growing port in the nation. Accompanying the growth in containerized traffic has been the establishment of import distribution centers by several national retailers to handle the thousands of TEUs transiting the nation’s seaports.