June 16, 2015 U.S. East Coast, West Coast Ports Container Traffic 6/16/2015 According to a report released by PIERS database, the U.S. East Coast ports handled more loaded containers in the first three months of the year than the West Coast for the first time on record. Year-over-year first quarter loaded container traffic: • East Coast: + 9% • West Coast: -12% • Gulf Coast: +8% Loaded Container Market Share (End of first quarter 2015): • East Coast: 48% • West Coast:44% • Gulf Coast: 8.3% This trend in container traffic and shift in market share dates back to issues that began in October of 2014 when contentious labor negotiations, along with a number of other factors, led to increased levels of congestion on the West Coast. Cargo diversions increased starting in January of this year, which has led to congestion issues of their own for major East and Gulf ports. It is difficult to predict if this shift is permanent or to what extent it will change in the future. There are many factors that play a role in deciding this: The Panama Canal The expansion project that will add a third set of locks and a Pacific access channel is scheduled to be completed in April 2016. This will accommodate vessels with capacities up to 13,000 20-foot-equivalent units, which could potentially encourage more cargo to be routed through East and Gulf coast ports. Residual effect of the labor issues. The PMA and ILWU memberships have officially ratified the new labor contract this past month and are working to clear the backlog of congestion. However, it is yet to be seen if this is enough to regain the trust from the carriers and shippers who were hurt most by the congestion and encourage them to return to the West Coast. Can the East Coast handle the added volume? East coast ports such as New York- New Jersey and Norfolk, who saw a significant increase in container volume, experienced congestion issues of their own. East Coast infrastructure has struggled to efficiently support this added volume. Odyssey will continue to monitor the international trade markets and the fluid dynamics of containerized shipping into and out of North America and globally. In the meantime, if you have any questions about how this will affect your specific business process please free to call.