FMC Report Finds US Port Market Share Declines

An increase in the number of cargo ships bound for the U.S. but later redirected to other North American ports was a result of congestion issues during 2015, the Federal Maritime Commission said in a report (here). "The annual increase in congestion rates combined with the labor disputes of late 2014 and early 2015 and the growing attraction of foreign ports as a means of getting cargo into the United States all led to the continued growth of cargo diversions in 2015," the FMC said in the report, an update to the commission’s 2012 “Study of U.S. Inland Containerized Cargo Moving through Canadian and Mexican Seaports." The agency pointed to three main factors that led to increased use of neighboring countries' ports: "port congestion, stale trade growth, and the ability of U.S. importers to determine cargo routing as part of their corporate import strategy."

While the U.S. ports still handled the vast majority -- about 78.5 percent -- of North American container trade, the diversions mark a worrisome trend. "In light of 2015 representing another year in which Canada and Mexico experienced growth in market share of North American cargo, it is clear that in order to stay competitive with neighboring foreign ports, U.S. ports must continue to expand and improve to handle rising container volumes of the coming years," FMC Commissioner Richard Lidinsky said. The year was especially difficult on the West Coast, where the largest volumes of containers enter the U.S., the FMC said. Still, the "Ports of Los Angeles and Long Beach see 2016 as a year in which they will return to normal container growth and regain market share," it said. "Through the first five months of 2016, West Coast ports have experienced back and forth trade volumes."