Executive Briefings

U.S. Ports Forge Alliances to Keep Their Spots on Trade Map

U.S. seaports are joining forces, setting aside decades of regional competition over cargo as a wave of consolidation in the shipping industry threatens to cut some cities out of global trade routes.

Shipping regulators are reviewing a proposal by the port authorities of Georgia and Virginia to discuss coordinating some operations, including investments in new equipment and negotiations with shipping lines. The ports of Seattle and Tacoma, Wash. merged most operations in 2015. The nation's busiest ports, in Los Angeles and Long Beach, Calif., are sharing more data since severe congestion brought operations to a near halt along the West Coast two years ago.

The deals are a response to unprecedented consolidation in the shipping industry. The world's top ocean carriers have formed three alliances that went into operation at the start of this month and will control 90 percent of shipments on major global trade routes. They plan to save money by packing more cargo on larger ships that make fewer stops.

Many ports, fearful that they would be left out of shipping routes, are investing billions of dollars to dredge deeper harbors and install bigger cranes to handle the new class of megaships. Consolidation among U.S. ports is the logical next step, experts say.

“The shipping alliances have all the power,” said Geraldine Knatz, who was executive director of the Port of Los Angeles until January 2014 and is now a professor at the University of Southern California. “We’ve got to stop fighting against each other, and try instead to build some leverage.”

Read Full Article

Shipping regulators are reviewing a proposal by the port authorities of Georgia and Virginia to discuss coordinating some operations, including investments in new equipment and negotiations with shipping lines. The ports of Seattle and Tacoma, Wash. merged most operations in 2015. The nation's busiest ports, in Los Angeles and Long Beach, Calif., are sharing more data since severe congestion brought operations to a near halt along the West Coast two years ago.

The deals are a response to unprecedented consolidation in the shipping industry. The world's top ocean carriers have formed three alliances that went into operation at the start of this month and will control 90 percent of shipments on major global trade routes. They plan to save money by packing more cargo on larger ships that make fewer stops.

Many ports, fearful that they would be left out of shipping routes, are investing billions of dollars to dredge deeper harbors and install bigger cranes to handle the new class of megaships. Consolidation among U.S. ports is the logical next step, experts say.

“The shipping alliances have all the power,” said Geraldine Knatz, who was executive director of the Port of Los Angeles until January 2014 and is now a professor at the University of Southern California. “We’ve got to stop fighting against each other, and try instead to build some leverage.”

Read Full Article