The economic recovery is still moving slowly, but a new report finds positive momentum at the nation’s seaports, where vacancy rates have fallen 1.4 percent in the past year.
Jones Lang LaSalle‘s third annual report covering ports, airports and global infrastructure found a national vacancy rate of 8.5 percent, besting the overall industrial vacancy rate of 9.7 percent.
The report had even better news for the New York/New Jersey seaport, where vacancy rates are 7.6 percent. The report suggests one key reason for the falling vacancy rates is increasing cargo volume, which is approaching pre-recession levels locally.
The report also scores ports based on its Port Index, a calculation based on cargo performance, investment plans, unit volume and real estate fundamentals. Los Angeles was the top-scoring port overall. New Jersey and New York’s port was the top-scoring port on the East Coast, according to the report, and the fourth nationally.
David Knee, managing director of supply chain logistics solutions at Jones Lang LaSalle, in Hasbrouck Heights, said Los Angeles’ success is a good sign for this region’s ports.
“Most companies like to have dual port operations, or the ability to distribute from the East Coast and the West Coast, and then depending on the size of the company, they may also have Midwest operations,” he said.
Knee said growth in Los Angeles typically precedes growth in the New Jersey area. That means as vacancy rates fall and development begins to pick up out west, Knee said, East Coast ports can be expected to follow suit.
Knee said the higher occupancy rates locally have been driven by the food and beverage sector, third-party logistics providers — which can serve multiple industries — and the apparel business.
“New Jersey is a much more diverse market, so you’ll see a hodgepodge of many industries that grow a little bit,” Knee said.
Longer-term, Knee said the local seaport is also likely to see more cargo when the Panama Canal expansion project is complete in 2014.
As for what the report means for the pace of the recovery, Knee said he would leave economic predictions to professional economists, but expects there’s reason for hope.
“We hit bottom a while back, and we feel cautiously optimistic,” he said. “It’s a slow-moving process, but we think things are slowly getting better.”