After having grown used to losing market share in the nation’s container traffic to their West Coast rivals, the East Coast ports and their railroad allies anticipate that the competitive balance will soon shift in their favor.
The major catalyst for change is the current $5.25 billion expansion of the Panama Canal. When completed in 2014, the enlarged Panama Canal will accommodate the larger super post-Panamax container ships and facilitate the migration of container traffic to East Coast ports via the all-water route.
A new ProLogis report titled "Capital Improvements Bolster the East Coast's Intermodal Rail Network" observes that, due to impending capital investments in preparation of this migration, supply chain professionals anticipate East Coast ports to gain market share of the nation's container traffic from their West Coast rivals.
Two Class-1 railroads that dominate the eastern U.S. — the Norfolk Southern and the CSX — are positioning themselves to promote and benefit from the increased container traffic via the all-water route. These railroads and East Coast ports are investing billions of dollars to fund capital improvements in the intermodal rail service between the East Coast ports and the major Eastern and Midwestern population centers.
"With the East Coast ports maneuvering to increase their market shares, the two eastern railroads are attempting to position themselves to increase their market shares of the nation's intermodal double-stack rail freight traffic," commented Leonard Sahling, first vice president of the ProLogis Research Group.