On the important topic of West Coast container port competitiveness, this paper by Phil Davies analyzes the market performance of two West Coast port complexes – Vancouver BC and the Southern California ports of Los Angeles and Long Beach. The research in Thinking Outside the Box: Macroeconomic and Inland Network Impacts on Port Competitiveness is based on macroeconomic factors and the competitiveness of inland transportation networks to derive alternative estimates of price elasticity for West Coast container traffic. In both cases, the results suggest that traffic is much less sensitive to relative cost differentials than conventional wisdom suggests. The paper also analyzes potential impacts of the Panama Canal expansion on US container traffic and highlights the implications for West Coast ports in developing strategies to maintain competitiveness.

West Coast Container Port Competitiveness Research Findings

The results of this Davies Transportation Consulting research presented at Metrans highlights the fact that the competitiveness of West Coast ports is significantly influenced by macroeconomic factors beyond the control of port authorities. It is also dependent on the strategic decisions of other service providers (including the Class 1 railways and the Panama Canal Authority). The scenario analyzed in this paper – an increase in interline rates by Eastern Class 1 railways – suggests the possibility that transloading of cargo from international marine containers to domestic containers or trucks will play an increasing role for West Coast import shipments destined east of the Mississippi River.  West Coast container port competitiveness under this scenario, the balance between IPI and transload traffic at West Coast ports may shift. The extent of this shift may be influenced by investment decisions of port authorities and other regional stakeholder – for example, decisions between investments in on-dock rail (which facilitates IPI traffic) and development of industrial land for transloading facilities. Development of regional inland port facilities served by short-haul rail shuttle operations could integrate these strategies.