Make no mistake, it’s not a diversion. The shift of Asian cargo to all-water-services through the Panama and Suez canals has lifted East Coast box totals from Savannah to Boston. The question is: How much more is to come? By George Lauriat, Editor-in-Chief, AJOT It is often referred to as a cargo diversion: The shift of cargo from congested Southern Californian ports to all-water-services via the Panama and Suez canals to US East Coast ports. According to industry estimates, box traffic in the North Atlantic range of ports (Boston to Philadelphia) is up over 10% for the first nine months of 2004 compared with the previous year – posting more than 2.9 million teus compared to 3.6 million teus. The South Atlantic ports have experienced an even greater increase in volume. The reason for the rise in box totals is a flood of imports from the Far East, supplemented by a surprising growth of exports back to Asia. The results total far more boxes than would be expected, simply keeping in step with the growth of Far East trade. A shift in trade has occurred, and it is no diversion. The real diversion is the shift of services north to the ports of Oakland, Tacoma and Seattle. The causes behind the shift to US East Coast ports are well documented. Congestion in Southern Californian ports of Los Angeles and Long Beach has slowed transit times. (Although PierPass [see AJOT 11/15/04, page 12], a system designed to shift more cargo to night and weekends to speed up transits is scheduled to start in first quarter 2005.) Labor unrest and eventual lockout on the West Coast ports in 2003 also contributed to shippers deciding to shift freight to US East Coast ports. Finally, indifferent rail service, particularly with Union Pacific, has motivated shippers to move to all-water-services. Finally, retailers are building DCs (Distribution Centers) on the East Coast at a record clip, making the shift to all-water services easier. The impact on East Coast ports is hard to ignore. For example, in the Port of New York/New Jersey, box traffic is up 11% for the first nine months. More dramatically, the monthly container totals exceeded 250,000 teus seven times in the first nine months of 2004, a threshold exceeded only once in the all of 2003. The reason for the startling growth is Far East trade. In the first nine months, the Far East accounted for 532,581 teus or over 30% of the Port’s throughput. This increase was powered by a 27% Far East import surge. The deluge of boxes doesn’t appear to be slackening. Monthly imports from the Far East were up over 54% in September 2004 (66,922 teus) compared to September 2003 (43,356 teus.) The pressure is now on virtually every East Coast port to continue the drive to expand infrastructure and facilities to keep pace with the Asian tsunami of boxes. While announcing the strong first half figures NY/NJ Port Commerce Director Richard M. Larrabee noted, “The second half of 2004 will witness two major events that set the stage for continued cargo growth. The first stage of the expansion of our ExpressRail facility in Elizabeth is scheduled to become operational and our 45-foot deepening project is on target for completion.” Both are key projects to enable the port to handle the anticipated increase of cargo coming via all-water services. Although on a much smaller scale, the flood of Asian imports provided an even more dramatic impact on the Port of Boston. For the period November 2003-October 2004 Far East box totals are up 44% (57,235 teus) compared with November 2002-October 2003 (39,634 teus). Imports increased from 18,426 teus for the earlier period to 27,298 teus ending in October. Exports also were up from 10,394 teus to 17,660 teus. The Ports of Virginia have also benefited by the new all-water-services. Virginia Port Authority (VPA) statistics have also jumped to record levels. On a monthly basis, the VPA’s ports broke the 150,000 teu barrier once in 2003 (158,570 teus in Oct.). In 2004, the VPA has already exceeded the 150,000 teu mark five times in only the fir