China trade to enrich ports in u.S. East, too

The shift of U.S. manufacturing overseas to developing countries like China has resulted in soaring imports of consumer goods and congestion at West Coast ports.

The result is that the ports on the East Coast are expanding in anticipation that importers will need additional gateways into the U.S. market as Chinese trade grows over the long term.

This is also expected to benefit the two East Coast railroads, as an alternative to shipping goods inland via increasingly congested interstate highways.

Ever since 2004, when stoppages on the West Coast caused major problems in delivering consumer goods to retailers’ shelves, shippers have sought additional entry points for imports.

The ports of Los Angeles and Long Beach, because of their size, are unlikely to see their dominating role challenged, and analysts have said there is plenty of growth to go around.

The East Coast ports have all embarked on major projects to help take advantage of rising U.S. imports – which have seen double-digit growth over the past three years – and are all vying for business from Asia and above all China.

These East Coast ports all tout their proximity to major interstate highways plus the presence of CSX’s and Norfolk Southern’s rail networks, providing easy access to consumers.

Both railroads expect an increased volume of Chinese trade to come though the ports of East Coast and are betting that rising highway congestion will push more of that business onto rail.

The International Herald Tribune, January 19^th, 2007

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Here winners are fast rather than large

Few industries are more exposed to the forces of globalization than logistics. As supply chains are stretched across oceans and continents, manufacturers and retailers are increasingly looking for logistics partners with international capabilities.

This pressure to go global helps explain the wave of consolidation that has swept through the industry over the past two years, as logistics companies have raced to expand around the world.

Consolidation is likely to continue. Today the world’s 10 freight forwarding companies command less than 40 per cent of the global market. Markets are still fairly fragmented. Logistics companies find themselves against stiff local competition everywhere in the world. But customers are putting pressure on national players to expand so the forces behind consolidation remain strong. There is growing demand from multinational companies for integrated transport and logistics solutions that can handle everything from the smallest package to the heaviest freight. However some analysts are less confident that synergies exist between small package networks and broader supply chain services.

The greatest potential for further consolidation is in emerging markets, particularly China and India, where international transport and logistics companies are seeking greater presence.

But size alone is not enough to guarantee success for logistics companies. “It’s the fast changing world we live in,” says Mike Escew, chief executive of UPS, the world’s largest parcel courier. “The winners are going to be the fast not the large”.

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