Thursday, June 24, 2010

Major U.S. Ports to Spend $8.5 Billion On Development

As global containerized cargo traffic begins to slowly return after the global economic meltdown of 2008 and 2009, the nation's major ports are planning or under way with major infrastructure development to beat back competition, according to a new report by Chicago-based commercial real estate management firm Jones Lang LaSalle.
“According to the American Association of Port Authorities, in the last 50 years U.S. seaports have invested more than $34 billion in capital projects to enhance their facilities,” said John Carver, head of the Ports, Airports, and Global Infrastructure group at Jones Lang LaSalle. “By our estimates, the top 13 ports alone will pour nearly a quarter of that amount, roughly $8.5 billion into container terminal and harbor dredging projects in just the next five years. This ratio clearly demonstrates the major efforts being made to ensure that U.S. ports remain competitive and efficient in the fight for global market share.”

The Virginia Port Authority, the Port of Long Beach, and the Georgia Ports Authority topped the list of the nation's major port areas planning development. The VPA has plans to spend just under $2.5 billion, Long Beach has plans for $2.4 billion in development and the GPA plans to spend $1.2 billion at the Port of Savannah.

The report also found that the main driving force behind the increases in domestic spending on ports infrastructure remains the planned 2014 opening of the Panama Canal.

East Coast and Gulf ports are investing in anticipation of diversions from West Coast ports, said the report, while West Coast ports are looking at infrastructure investments as a means of retaining and attracting new customers following the opening of the expanded Panama Canal. The report concludes, however, that LA/LB will not suffer major diversions due to the opening of the Canal.

In addition, the report also introduced the new Jones Lang LaSalle Port Index, which ranked the nation's top 13 seaport hubs on their desirability for industrial development and investment. The ports were ranked on the basis of seven criteria: TEU volumes; TEU growth trends; labor costs; local industrial property vacancy rates; on-dock and near-dock rail availability; ratios of land value-to-lease rates, and, planned infrastructure investment. Several of the ports, such as Los Angeles and Long Beach, were combined into single entities for the rankings.

"Not surprisingly, Los Angeles/Long Beach tops the Index," said the report, "followed by New York/New Jersey and Savannah which have all performed above the national average and have committed to substantial infrastructure investment in recent years."

The LA/LB port area topped the index with a score of 91.4. New York-New Jersey came in second at 89.5, followed by Savannah, 86.3; Virginia, 85.8; Houston, 84.8; Seattle-Tacoma, 82.0; Jacksonville and Miami, tied at 79.8; Oakland, 78.0; Baltimore, 73.8; and Charleston, 73.0.