North American port rankings: Mexican ports grow fastest

North American port rankings: Mexican ports grow fastest

Riding faster national container growth than their US and Canadian counterparts, three of the four North American ports to rise in the ranking of the top 25 gateways were in Mexico. The ascent of Manzanillo, Altamira, and Lazaro Cardenas in the rankings, in addition to Houston, mirrored a similar feat last year and underscores the pressure on Mexico’s port and freight networks to respond to fast rising cargo volumes.

Loaded cargo volumes through Mexican ports grew 8.7 percent year over year in 2018, to 5 million TEU. TEU volume in US ports rose to 36.7 million, an increase of 4.5 percent. Container volume through Canada’s top four ports rose 4.8 percent to 5.8 million TEU. The calculation includes laden and empty container volume through Halifax.

The JOC Top 25 North American Ports list, in which ports are ranked by total volume, is compiled with figures from PIERS (a sister company of JOC.com within IHS Markit), the Mexican Ministry of Communications and Transportation, and the Canadian ports.

Mexico’s ports of Manzanillo Veracruz were two of five North American ports to post increases in export volumes in 2018. Houston, the ports of the Northwest Seaport Alliance (Seattle and Tacoma), and Prince Rupert, British Columbia, also tallied higher export TEU.

Manzanillo and Veracruz handled increased import volumes in 2018, as did Baltimore and Miami.

Manzanillo and Lazaro Cardenas, both on the Pacific Coast, handled about 60 percent of Mexico’s port throughput, with much of it going to and from Asia. The cargo volume through Manzanillo, No. 8 in the total volume rankings for 2018, grew 9.5 percent year over year; Lazaro Cardenas TEU totals grew 11.7 percent, moving the port to the 15th spot in the overall rankings. Growth at the two Pacific ports outpaced that in the country’s Gulf Coast ports, Veracruz and Altamira. The two Gulf Coast ports predominantly handle cargo to and from Europe and the US, and volume increased 5.3 percent and 2.8 percent, respectively.

Although Mexico’s annual growth in 2018 lagged the 11.9 percent year-over-year increase in cargo handled by the country’s ports in 2017, growth continues. That’s largely because of the strength of the US economy, which posted 2.2 percent GDP growth in the first quarter, and US company and consumer appetites for Mexican goods, said Paul Bingham, director of economics and country risk at IHS Markit, parent company of JOC.com.

Manufacturing boosts imports

Mexican imports, in turn, were strengthened by the country’s demand for “intermediate products, such as components for use in manufacturing, with non-North American trade partners of Mexico,” Bingham said.

“Mexico’s imports of inputs to manufacturing were strong in 2018 as demand for finished products manufactured in Mexico, then to be exported to the US, Canada, and other countries, was strong,” Bingham said.

The improving trade picture came even as Mexico’s economy struggled last year, with the industrial sector in recession and stagnating. But manufacturing grew 1.7 percent in 2018, helped by a 2.8 percent increase in car production to 4.09 million vehicles, a key sector for Mexico’s trade, according to IHS Markit.

A 2 percent increase in Mexico’s GDP, while not big, was enough to boost spending on imports, said Rafael Amiel, director, Latin America and Caribbean economics, for IHS Markit. “All components of imports are expanding — consumption, intermediate, and capital goods,” he told JOC.com.

End-of-year jump in imports

In the US, President Donald Trump’s trade war with China buffeted US imports and exports, with no clear trend in either imports and exports emerging from it, except for a strong surge in Chinese imports that stretched ports with dramatically elevated cargo volumes across the US at the end of the year. That stemmed from shippers looking to import goods into the US before a tariff on many Chinese goods, up from 10 percent to 25 percent, was scheduled to go into effect on Jan. 1. In the end, however, the increased tariffs were postponed pending further trade talks between the US and China.

“US exports saw substantial declines in some key export categories such as soybeans, targeted early by China for retaliation,” especially those in which Chinese importers could easily replace a US source with product from another country, Amiel said.

In the US, the trade war most affected West Coast ports because of “the greater share of their total volumes comprised of trade with China than Atlantic or Gulf Coast ports,” Bingham said. Some US importers shifted suppliers away from China in 2018, not necessarily impacting port volumes; the new source may still be in Asia, “sometimes even move on the same trans-Pacific liner services.”

That stability was reflected in the fact that all the top six ports in the North American rankings — Los Angeles, Long Beach, New York-New Jersey, Savannah, Vancouver, and Northwest Seaport Alliance — held the same positions in 2018 as they did in 2017.

Overall, exports through many of the Top 25 ports were far weaker than imports. The total volumes of only three of the Top 25 ports declined — Halifax, down 2.1 percent; New Orleans, down 1.7 percent; and Virginia, down 1.3 percent.

Exports diverging

None of the top 25 ports experienced a decline in imports, but exports fell at 10 of them. The biggest declines came at Virginia and Baltimore, both down 7.9 percent, followed by a 6.9 percent drop in New Orleans. Even Los Angeles, the top ranked port in imports, exports, and total volume, saw exports fall 2.7 percent.

The fastest-growing large US port was Houston, which moved up from eighth place to seventh in the ranking of total cargo, with a 10.3 percent increase in volume to 2.23 million loaded TEU. The only US port that grew more rapidly was Wilmington, North Carolina, whose volume jumped 26.2 percent to 226,000 TEU, keeping it ranked on the Top 25 list.

Houston moved from seventh to sixth in the export ranking, with a 9 percent rise in outbound cargo, driven in part by the rapidly growing export of resins produced in the Gulf Coast region. Imports through the Port of Houston grew 11.4 percent to 1.12 million TEU, fueled in part by the port’s status as one of two US ports — the other was Savannah — that saw the sharpest growth in imports from Asia.

Houston’s imports from Asia jumped 19.6 percent, while Savannah’s Asian import volume grew 11 percent. Savannah’s import volume jumped 10.8 percent to 2.1 million TEU, and its overall cargo volume grew 7.4 percent to 3.4 million TEU, making it North America’s fourth-largest port.

Ranked third in terms of exports, Savannah’s export volume grew 2.5 percent to 1.4 million TEU, but that looks set to rise in the future as resin producers increasingly find Houston’s capacity stretched and turn to the East Coast ports. In April, for example, resin producer Plastic Express announced that a new plant with a 2020 opening date willincrease resin exports from Savannah by 25,000 TEU in the first year, doubling the resin exports from the port.

The growth in cargo volume for Canada’s four largest ports cooled from the 10.3 percent year-over-year increase in 2017, with Halifax’s 2.1 percent decline the most notable change. That was led by a 4.6 percent drop in exports through Halifax, while imports through the port barely increased, inching up 0.4 percent.

British Columbia ports shine

The fastest-growing of Canada’s four ports in the ranking, Prince Rupert, experienced a 12.5 percent increase in overall cargo to 776,105 TEU, led by a 24.8 percent jump in exports. The region’s growing grain export business prompted Mobil Grain, an AGT Food and Ingredients subsidiary, to announce that it will open a new transloading facility in 2019, which will serve the ports of Prince Rupert and Vancouver.

The two ports benefit from cheaper rates on importing cargo to the Midwest, and Canadian ports in 2018 also benefited from the Trump trade war with China, as Chinese shippers started sourcing grains, forest products, and minerals in Canada.

Montreal experienced an 11.6 percent increase in total cargo volume in 2018 — enough to cause congestion and truck delays that prompted the port’s four terminals to implement an extended gates program. The increase, to a total volume of 1.68 million TEU, was led by an 11.6 percent rise in imports; exports remained flat.

The port has added three trans-Atlantic services in a year operated by Cosco Shipping, Hapag-Lloyd, and Maersk Line. The Danish carrier, announcing its new line in May, said it was doing so in part in anticipation of increased trade stemming from the Comprehensive Economic and Trade Agreement between Canada and Europe, which took effect in September 2017.

Source: JOC