Through the first half of the year, many North American ports reported strong increases in cargo volume, specifically imports, as the national economy continued to recover amid the backdrop of the COVID-19 pandemic. With consumer confidence increasing and economies opening in the second half of last year, goods were being shipped at a rate not seen previously. As a result of pent-up demand, major ports such as New York/New Jersey and the Ports of Los Angeles and Long Beach continued to experience delays.
New insight from Cushman & Wakefield’s biannual ports report for the Port of New York/New Jerset shows a historical high for cargo volume handled in the first half of 2021 and indicates additional trends unique to the region.
The Port of NY/NJ has consistently been the busiest port on the East Coast, serving as the region’s key gateway port. With six container terminals and multiple cargo rail lines, the Port of NY/NJ services one of the wealthiest and most dense consumer markets in the world. The New York Metro region is home to more than 19.5 million people.
The port serves more than 46 million people within a four-hour drive time. Rail lines from the port can also reach the Midwest, Canada, and greater Boston. As the national and local economies continued to recover from the ongoing pandemic, the Port of NY/NJ recorded substantial gains in cargo volume, despite ongoing delays. Year over year, there was a 30.6% increase in twenty-foot equivalent units (TEUs) handled at the Port of NY/NJ with almost 4.4 million handled in total – the third best in the nation.
Meanwhile, import volume rose by 31.2% through midyear as the Port of NY/NJ was one of just three ports that exceeded 2 million TEUs of inbound cargo. Trans-Atlantic trade continued to help bolster volume totals at the Port of NY/NJ this year as it remained the top North American destination for goods from Europe, representing 30.5% of the total port market share for inbound cargo from the region. Furthermore, rail volume at the Port has risen 10.0% in the last year.
Looking forward in the second half of 2021 the Port of NY/NJ could begin to show tempered monthly import totals due to the growing delta variant risk, specifically in China, which has caused some port shutdowns already.
Meanwhile, delays at the Port of NY/NJ will likely persist as the shortage of chassis has already added to congestion issues. Vacancy reached a new historical low of 1.9% at midyear 2021, while overall net absorption totaled more than 850,000 square feet during the last six months. Robust demand for Class A logistics space persisted in recent years as 3PL and logistics companies and e-commerce users accounted for most of the deal volume, specifically within new construction.
Finally, the asking rental rate climbed to a new high at the close of the second quarter: $11.04 per square foot—a 42.6% increase over the last three years and among the highest in the region.