What forces are transforming North America's container shipping map? Is it the Panama Canal expansion, the shifting competitive dynamics between East and West Coast ports, or the heightened logistics demands driven by e-commerce's explosive growth? A report titled "Docking and Loading: Five Trends Reshaping North American Shipping" by global real estate services firm JLL provides deep insights into the key factors influencing this complex and dynamic market.
1. The Impact of Panama Canal Expansion
The Panama Canal expansion stands as one of the most significant events affecting global shipping patterns in recent years. JLL's report notes the expansion has created "profound impacts" on industrial real estate demand. The widened canal now accommodates larger vessels, reducing transportation costs and improving efficiency. This development has particularly boosted East Coast and Gulf Coast ports, which can now more effectively serve Asia-to-East North America routes. However, West Coast ports maintain natural advantages for Asia-to-West North America shipping, meaning the expansion has fostered competition rather than complete substitution between coasts.
2. East vs. West Coast Port Competition
North America's container shipping market has long been dominated by West Coast ports like Los Angeles and Long Beach, serving as primary gateways for Asian goods. However, with the canal expansion and East Coast infrastructure improvements, Eastern and Gulf ports are gaining competitiveness. JLL's data shows 25.4 million square feet of industrial space under construction across 14 port markets, with 65% located near East and Gulf Coast ports—a clear vote of confidence in their future growth.
Walter Kemmsies, JLL's Chief Economist and Managing Director of Ports, Airports and Global Infrastructure, notes West Coast ports handle about half of shipping volumes while East Coast ports experience robust growth. However, West Coast industrial development faces constraints from limited available land near ports and increasing "first-to-last mile" transportation pressures. Since 2013, Mid-Atlantic and Southeast coastal ports have seen 20% growth in throughput versus just 5% for West Coast ports, signaling profound market shifts.
3. Industrial Real Estate Market Effects
Port throughput growth directly drives demand for warehouses and distribution centers. JLL emphasizes industrial warehouse markets remain extremely tight, with port-adjacent vacancies reflecting strong leasing fundamentals. Even before the canal expansion, anticipation boosted shipping volumes and leasing activity.
Mehtab Randhawa, JLL Americas Industrial Research VP, observes the canal's opening clearly benefits industrial markets, with strong fundamentals across port markets like Houston and East Coast locations. She notes real estate impacts are just beginning, predicting increased "first mile" demand from Gulf Coast ports as more vessels and cargo arrive.
4. Port Infrastructure Upgrades
Beyond the canal expansion, North American ports are actively enhancing infrastructure. Kemmsies highlights projects like New York/New Jersey's channel deepening to 52 feet—helping recover market share lost in the 1990s—and Norfolk Southern's new rail corridors connecting Virginia to Chicago and Houston. Savannah's dredging projects maintain pace, while East Coast infrastructure overall undergoes significant expansion to better handle larger vessels and growing volumes.
5. Shipping Alliances' Influence
Shipping alliances—now consolidated from four to three groups controlling 90% of global trade routes—create uncertainty through shared vessels, capacity controls, and scale economies. Kemmsies explains large vessels lose money when idling in ports; even with West Coast ports operating 24/7 with automation, unloading/loading an 18,000-TEU ship takes about 4.5 days, generating ~14,000 truck trips. Weather-related scheduling disruptions can cause severe congestion, with chassis availability becoming critical during multiple large vessel arrivals.
6. E-commerce's Logistics Challenges
E-commerce's rise demands faster deliveries, compressing order-to-delivery cycles. Kemmsies notes this requires more distributed inventory, reversing a 20-year inventory-to-sales ratio decline since 2014. Consequently, demand surges for port-adjacent real estate to facilitate cross-docking and repacking international containers into domestic ones for strategic nationwide replenishment.
Importers are increasing near-port storage to accelerate cross-docking and handle volume surges, with shipping alliances—though fewer in number—driving significant real estate demand through their concentrated port traffic shares.
7. Rail Transportation's Transformation
Rail must adapt to compete in container shipping, shifting from traditional commodities (coal, cement) to other freight. Intermodal now exceeds half of rail carloads—up 40% from a decade ago—but Kemmsies observes rail remains less flexible than trucking for most long-haul container transport. Rail companies must improve trucking collaboration, as seen in projects like Chicago's Centerpoint and Kansas City's logistics park, where distribution centers grow around major rail hubs at 3.4 million square feet annually.
8. Future Outlook
North American container shipping faces rapid transformation, with several key trends emerging:
Continued port infrastructure upgrades: Deeper channels, improved rail links, and advanced equipment will accommodate larger vessels and growing volumes.
Enhanced logistics efficiency: E-commerce competition will prioritize optimized supply chains and faster deliveries.
Expanded intermodal transport: Rail will integrate more closely with trucking and shipping for cost-effective, efficient networks.
Sustained industrial real estate growth: Port-adjacent warehouses and distribution centers will remain in high demand.
Success in this dynamic market will belong to those embracing innovation, adapting to change, and continuously improving competitiveness.