Through the first half of 2021, many North American ports experienced surges in cargo volume, specifically imports, as the national economy continued to recover amid the backdrop of the pandemic, according to a report from Cushman & Wakefield, North American Ports Report Mid-Year 2021
The Ports of LA and Long Beach have seen container ships queuing up at rates not seen since the 2020 peak season (last fall). This is due to the simultaneous arrival of ships delayed from South China, new trans-Pacific services and additional extra loader vessels. Imports through the ports of LA and LB have swelled 41.1% year-over-year through midyear.
North American industrial markets, and especially port-proximate industrial markets, are seeing record low vacancies. Los Angeles, New Jersey and Savannah are below 3.0% vacancy while Vancouver has a sub 1.0% vacancy rate.
Additionally, rents in these port-adjacent areas are reaching new highs. New Jersey, Los Angeles, Seattle, Miami and Long Island, to name a few, have all seen more the 11.0% year-over-year (YOY) increases in rental rates, and increases are not expected to slow.
As vacancy rates drop and rents continue to rise in these areas, tenants must obtain space further from ports to store the influx of products coming in.
Meanwhile, shipping costs have swelled drastically in recent months. Container shipping costs from China to the U.S. West Coast ports reached a new high of more than $20,000 per 40-foot container. The increase is partially due to rising COVID-19 cases across the globe which has slowed container turnaround times.