Box Pendulum Swings Even More Toward East Coast

The momentum within the container sector toward U.S. East Coast ports at the expense of West Coast ports continues to build, according to multiple data sets available on the FreightWaves SONAR platform.

In general, the more popular the East Coast becomes among container lines, the better for trucking demand and the worse for intermodal rail demand.

Trucks deliver volumes westward from East Coast ports that were previously served by transcontinental rail eastward from California. Furthermore, intermodal rail cargo travels shorter distances from East Coast ports westward than it does from Pacific ports eastward.

Customs Import Data

The most direct way to compare the coasts is through reported port statistics; the caveat is that this is a lagging indicator, as it takes time for port authorities to report those figures.

October data from port authorities confirms that California throughput is falling faster than throughput at eastern ports.

A more immediate way to gauge the trend is U.S. Customs import data. SONAR provides a seven-day moving average of maritime import shipments — a shipment being defined as one customs filing.

The latest series of this data set shows customs filings down 18% year-on-year in Los Angeles (SONAR: CSTM.LAX), whereas they have increased 21% year-on-year in Elizabeth, New Jersey (SONAR: CSTM.EWR).

Intermodal Rail Data

Another way to assess the east-versus-west issue is to analyze intermodal rail moves of loaded 40-foot containers. Multiple rail-car sizes are moved within the system, but the 40-footers are the ones coming off the ships.

Loaded volumes to Chicago are an important indicator of coastal preferences because both coasts have high-volume intermodal rail connections to the Windy City.

Currently, the volume of loaded 40-foot containers moving from Elizabeth to Chicago (SONAR:WORAIL40L.EWRCHI) is up 70% year-on-year. In contrast, the volume from Los Angeles to Chicago (SONAR: WORAIL40L.LAXCHI) is down 33%. This is a clear indication of the trade pendulum swinging eastward.

Freightos Container Shipping Indices

Yet another way to examine the trend is to look at the cost to ship 40-foot-equivalent-unit (FEU) containers by sea. The Freightos Baltic Daily Index tracks that pricing.

Assuming the container transport price is a reasonable proxy for demand, a shift favoring East Coast ports should create more negative pressure on rates from Asia to California than on pricing for the longer route, which transits the Panama Canal and loops up to ports such as Charleston, South Carolina; Savannah, Georgia; Hampton Roads, Virginia; and New York/New Jersey.

The data confirms this indicator, as well. The average price to ship a box from China to the North American West Coast (SONAR: FBXD.CNAW) is down a whopping 44% year-on-year. The rates haven't performed well to the East Coast either (SONAR: FBXD.CNAE), but they're less bad — down 31% year-on-year.

Editor's note: Freightos has a business agreement with FreightWaves that includes editorial coverage.

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