E-commerce, lower East Coast rates, more inland ports offer opportunities for logistics

The logistics industry can expect to see increasing opportunities with the growth of e-commerce and greater demand for inland port facilities, while Savannah and other U.S. East Coast seaports can look to benefit from lower all-water rates, according to industrial real estate expert Curtis Spencer. Opening the two-day Georgia Logistics Summit in Atlanta today [April 19] on an optimistic note, Spencer, president of Houston-based IMS Worldwide, said that, largely because of requirements for smaller shipments, “E-commerce is driving logistics batty.” But Spencer was quick to say that burgeoning e-commerce should offer opportunities as retailers increasingly rely upon third-party logistics providers. Spencer said he also believes that inland ports will take on a greater role in supply chains. And, citing the decreasing differential between all-water ocean rates from Asia to the U.S. East Coast versus the West Coast, a factor which should soon combine with opening of an expanded Panama Canal, Spencer said he sees bigger volumes coming into the nation via Savannah and other East Coast gateways. The two primary “knocks” against importing directly to the East Coast traditionally have been longer transit times and cost differentials that exceed inland intermodal move expenses, Spencer said.

He said shippers can adjust for transit times and now the cost difference hurdle seems to have been lowered. “All-water to the East Coast has always been $2,000 more than to the West Coast,” Spencer said. “Now the price difference has gone down to $1,000 and has held for six months.” Noting that ocean carrier contract rates to take effect May 1 appear as though they will uphold the spot rate drops for Asia-to-U.S. East Coast shipments, Spencer opined, “I see this is going to be a game-changer pretty soon.” Comprehensive coverage of the eighth annual Georgia Logistics Summit is slated to appear in the May 9 edition of the American Journal of Transportation.