Conventional wisdom on Pacific Coast container port competitiveness suggests that the routing of container traffic routing via West Coast ports is highly sensitive to transportation and transit time differentials. This belief played a major role in the initiation and the conclusions of the recent Federal Maritime Commission inquiry on the impact of the Harbour Maintenance tax on port competitiveness. This presentation reviewed the research behind the current conventional wisdom, highlight recent research conducted by Mr. Davies on the impact of macroeconomic variables and inland transportation networks on Canadian and US port competitiveness. The paper discussed the implications for the Ports of Los Angeles and Long Beach in developing robust strategies increasing Pacific Coast container port competitiveness by responding to increased competition following expansion of the Panama Canal.
Factors Influencing Pacific Coast Container Port Competitiveness
– Lower ocean shipping costs to East Coast following expansion of Panama Canal.
– Major investments by NS and CSX to improve intermodal corridor linkages from East Coast ports.
Mr. Davies suggest that Pacific Coast container port competitiveness will be determined by a value proposition that is about more than costs and transit time. Thinking strategically requires port authorities, shippers and carriers to consider the following point:
– Cost and transit time: commodity market.
– What is the value proposition for the LA/LB Gateway?
– Product differentiation.