Savills
2023 - Industrial
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West Coast ports continue to lose market share as shippers look to avoid delays and labor disputes
Port congestion has improved from last year but has gotten worse at fast-growing East Coast ports
While property markets are cooling, vacancy is low and remains a challenge for occupiers
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02
03
A slowing global economy will negatively impact container volumes in 2023
2023 Outlook
For more information, please contact us:
Mark Russo
Senior Director, Head of Industrial Research
mrusso@savills.us
Gregg Healy
Executive Vice President, Head of Industrial Services
ghealy@savills.us
savills.us
Megatrends
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Virginia
Savannah
Oakland
Northwest Seaport Alliance
New York & New Jersey
Los Angeles
Long Beach
Houston
Charleston
Warehouse occupiers should gain leverage as vacancy rates rise and rents stabilize
Lower demand is likely to help ease port congestion and loosen labor markets
Top Ports
Market share at East and Gulf Coast ports swelled to 51.8%, up from 44.5% in 2016.
2022 TEU Volume % Change
Special thanks to the collaborative efforts of all cross-function contributors who helped bring the inaugural Savills Ports Report to life.
Q1 2023 - Industrial
Savills Ports Report
9.5M
+5.7%
3.7M
+5.1%
5.9M
+5.0%
2.8M
+1.5%
4.0M
+15.1%
2.3M
-4.5%
9.1M
-2.7%
2.6M
-10.2%
shanghai
rotterdam
Creative Services Digital Services Marketing PR/Communications Research and Data Services
East Coast
West Coast
17-19 days
10-12 days
33-35 days
#WeAreSavills
Click on the port name on the map for a detailed overview
Ports Report
9.9M
-7.2%
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Capital Investment
Completed in late 2022, the harbor was dredged from 45 feet to 52 feet to allow container ships of all sizes/weights to pass through regardless of the tide.
Phase 1 opened March 2021 and by completion the state of the art terminal will boast three berths and 286 acres, adding 2.4 million TEUs and doubling current port capacity.
Multiyear project will bring new container-handling equipment, a modernized container yard and refrigerated cargo yard, a strengthened wharf and an on-terminal transload facility for mega retailers.
$600 M
$2.0 B
$500 M
Transportation
Port of Charleston
Port - East Coast
U.S. Rank by trade
port characteristics
2022
2.8 M
+1.5% Y-O-Y
#7
2021
#8
Terminals
3
Berths
6
Cranes
19
Post-Panamax Cranes
Depth
52 feet
Credit Rating (Moody's)
A1
TEU VOLUME
Charleston Harbor Deepening Project
Hugh K. Leatherman Terminal
Wando Welch Terminal Modernization
Annual TEU Volume
Port Congestion
After a brief spike in delays in early 2022, efficiency returned to Charleston for the remainder of the year.
Labor*
Both supply and demand for labor exceeds the national benchmark.
Supply (jobs)
Demand (monthly postings)
Compensation (annual)
*Labor data represent transportation and material moving occupations **Value represents national average adjusted for region size Source: EMSI Burning Glass
Class I Operators:
CSX, Norfolk Southern
Major Highways:
I-26, US-17
Real Estate
With an average asking rental rate of $6.39 Charleston is a more affordable East Coast port option for occupiers.
Rent vs. Vacancy
KEY STATS: Charleston
Vacancy Rate
1.9%
Inventory
73.3 msf
Annual Rent Growth
21.3%
Average Asking Rent
$6.39
Under Construction
11.4 msf
Class A, 100K+ SF
TEU volumes have grown 14.6% from their pre-pandemic 2019 levels.
After a brief pandemic slowdown in TEU volume, Charleston bounced back to its historically steady growth, handling a total of 2.8 million TEUs in both 2021 and 2022. Investment by the Port Authority of over $3.0 billion for various projects helped set the groundwork for the port to handle larger TEU volumes as cargo began to migrate to the East Coast throughout 2022. From January to mid-April, congestion at the port proved a challenge, reaching over 14 days at the peak. The brief bottleneck has since eased, and Charleston has quickly returned to an efficiently operating seaport. The construction pipeline of 11.4 million square feet will provide larger distribution centers for e-commerce and logistics providers, and with vacancy at 1.9%, expect new supply to be absorbed quickly.
Photo Source: Shutterstock
Source: Savills Research
Source: EMSI Burning Glass
Source: MarineTraffic
Source: Local Port Authority
National Average
31,940**
969
32,313
635**
$33,892
$35,467
MSA: CHARLESTON - NORTH CHARLESTON, SC
2023 - hello test
Will widen the channel by 170 feet along its Galveston Bay reach, from 530 to 700 feet. It will also deepen some upstream segments to 46.5 feet.
Will add 50 additional acres of container yard storage area and includes construction of new wharf, stevedore building and electrical infrastructure at Bayport Terminal Wharf 6.
$40M to purchase three dockside electric ship-to-shore container cranes for Bayport Terminal and $65M to buy 26 new hybrid-electric rubber-tired-gantry yard cranes for use at both facilities.
$1.0 B
$133 M
$105 M
Port of Houston
4.0 M
+15.1% Y-O-Y
#5
3.5 M
#6
2
30
41
13
45 feet
Aa3
Project 11 - Ship Channel Expansion
Bayport Container Terminal Expansion
Expansion of Crane Capacity
Congestion at the port has become more volatile throughout 2022 as TEU volume reached record highs.
Supply of labor exceeds the national benchmark, making the Port of Houston an attractive option for warehouse occupiers.
Kansas City Southern, BNSF
I-45, I-10
Houston is not faced with the same land constraints as some other port markets, offering a more affordable option for occupiers.
KEY STATS: HOUSTON
5.3%
587.9 msf
14.8%
$6.37
32.9 msf
Gulf Coast
Since 2019, Houston has grown faster than any major port with annual TEU volume up 32.9%.
The Port of Houston has seen a net benefit from the shifting market share of cargo volumes. TEU volume grew 7.5% annually from 2012 to 2021, and then amid West Coast congestion and labor bottlenecks, TEUs increased 15.1% from 2021 to 2022. To go along with its No. 1 ranking for waterborne tonnage volume, Houston ends 2022 as the fifth-busiest port by TEU volume. Demand historically driven by manufacturing and petrochemical industries has been aided by growth in e-commerce and logistics & transportation/3PL operators. The growing diversification of the tenant base has seen rental rates touch record highs and net absorption continues to exceed deliveries of new product.
Photo courtesy of the Port of Houston
269,459**
3,911
280,061
5,356**
$35,511
MSA: HOUSTON - THE woodlands - sugar land, tx
10-year construction program combining two aging shipping terminals into one of the world’s most advanced and greenest container terminals, completed in 2022.
Adds a second rail line running approximately 8,000 feet long that enables four terminals in the port's south basin area to simultaneously handle arriving and departing trains.
The project calls for deepening the approach channel from 76 feet to 80 feet deep and deepening parts of the West Basin and Pier J from 50 feet to 55 feet.
$1.5 B
$35 M
$170 M
Port of Long Beach
9.1 M
-2.7% Y-O-Y
#3
9.4 M
#2
62
68
76 feet
Aa2
Middle Harbor Redevelopment Project
Pier G/J Double Track Access Project
Long Beach Dredging Project
Congestion at the Port of Long Beach settled in the second half of 2022.
Unresolved labor disputes at the port add more stress to an already difficult labor market.
533,138**
8,900
10,596**
$36,883
Union Pacific, BNSF
I-710, I-5
Low vacancy and high asking rents have created spill over demand in markets like Las Vegas and Phoenix.
KEY STATs: LOS ANGELES
2.2%
660.9 msf
40.0%
$23.38
6.3 msf
After a year-end slump, annual TEU volume was 2.7% lower in 2022 than in 2021.
The sister port of Los Angeles, Long Beach has historically enjoyed being surrounded by the largest industrial markets in the country. It trailed only Los Angeles in cargo volume over the past decade, and tenants and investors alike soaked up much of any supply. Such historical demand has allowed Long Beach to sit atop some of the most expensive industrial markets in the United States, with Class A rents exceeding $20.00 per square foot. The onset of the pandemic brought a different set of problems — congestion and volatility that forced tenants to find alternative ports to meet their cargo needs. The issues persisted through the first half of 2022 and tapered off to end the year.
*Labor data represent transportation and material moving occupations **Value represents national average adjusted for region size
MSA: LOS ANGELES - LONG BEACH - ANAHEIM, CA
499,475
Extension of existing rail bridge, five new rail storage tracks, new crossovers and switches and modifications to the existing compressed air system of the Pier 400 rail storage yard and bridge.
Dredging of water depth to 53 feet to accommodate ships with up to 16,000 TEUs, berth deepening, construction of additional 1.5 acres of backland, electrical infrastructure for 3 additional cranes.
Adding five new tracks of approximately 12,000 linear feet, this project will increase the capacity of the existing overall on-dock railyard by about 10%.
$73 M
$65 M
$52 M
Port of Los Angeles
9.9 M
-7.2% Y-O-Y
#1
10.7 M
Pier 400 Corridor Storage Tracks Expansion Project
Everport Terminal Improvement Project
On-Dock Railyard Expansion at Fenix Marine Services Container Terminal
Congestion improved since early 2022 as trade volume declined.
Low vacancy has caused rents to surge 40% year-over-year creating affordability issues for occupiers.
53 feet
72
84
57
9
The Port of Los Angeles saw fewer TEUs in 2022 as it lost market share to the East Coast but remains the nation’s busiest port.
Holding the title for the nation’s busiest container port for 23 years, the Port of Los Angeles saw a 7.2% reduction in TEU volumes from 2021. A perfect storm of port congestion, labor headaches and expensive and sparse warehouse space options forced tenants to divert cargo to East and Gulf Coast markets. Ongoing labor negotiations between dock workers and their employers persisted through the end of 2022 and forced occupiers to diversify their exposure away from future backlogs. The congestion bottleneck did ease, however, in the latter half of the year, with wait times hovering around four days between October and December.
Photo courtesy of the Port of Los Angeles
Replacement of mission-critical, timber-supported wharf structures vital to marine cargo activities at five port facilities.
Further dredging the channels to 55 feet to allow more post-Panamax ships to call the Port of New York & New Jersey.
Completed in 2019, the final installment of the ExpressRail network that connects cargo head to key inland markets.
$20.0 B
$85 M
$143 M
Port of New York & New Jersey
9.5 M
+5.7% Y-O-Y
9.0 M
32
61
47
50 feet
Port Wharf Replacement Program
NY NJ Harbor Deepening Project
ExpressRail Port Jersey
No drastic spikes in wait times and relatively low volatility throughout 2022 demonstrate why this port is picking up market share.
There is a large but expensive pool of labor in the greater New York area.
CSX, Norfolk Southern, Canadian Pacific
I-95, I-80
Low vacancy and double-digit rents have driven some tenants to neighboring markets in Pennsylvania.
KEY STATs: Northern New Jersey
3.0%
635.1 msf
36.1%
$18.39
17.2 msf
From August through November, the Port of New York & New Jersey made headlines surpassing Los Angeles as the busiest port in the U.S.
Northern New Jersey has long been a preeminent industrial market and the largest East Coast port, historically trailing only Los Angeles and Long Beach in cargo volume. Recently, it has been benefiting from trade volume shifting eastward, and in 2022, its ranking increased to second-busiest port, overtaking Long Beach. Tenants citing delays and the volatility of wait times on the West Coast have found quite the opposite in New York and New Jersey, with total wait times hovering at only around three days. The real estate market has responded as expected, with port-centric submarkets exhibiting less than 1% vacancy and rental rates in excess of $20.00 per square foot.
Northern New Jersey
781,090**
7,380
682,566
15,524**
$40,548
MSA: NEw york - newark - jersey city, NY-NJ-PA
Phase 1 completed in Q1 2022, delivering four super post-Panama cranes, the largest cranes in the world. Phase 2 is underway and focuses on further modernization of the south berth.
Development of new Tacoma South Facility will accommodate 50,000+ annual container lifts, increasing container capacity and chassis availability.
Deepen the existing channel in the Blair Waterway from 51' to 57' and widen portions of channel to between 450' and 865'.
> 50,000 lifts
$295 M
11
23
43
Terminal 5 Modernization Project
BNSF/NWSA Development of Tacoma Rail Hub
Tacoma Harbor Navigation Improvement Project
Congestion peaked at 5.9 days in January and flatlined the remainder of the year with an average wait time of 2.4 days in 2022.
Wages are the highest out of the major U.S. port markets.
I-5, I-90
Vacancy has averaged 5.1% over the past 5 years causing rents to grow nearly 45% over the same period.
KEY STATs: Seattle/puget sound
4.0%
220.0 msf
6.9%
$10.65
12.8 msf
Seattle/Puget Sound
The port has not seen more than 3.0 million annual TEUs since 2019.
After a busy 2021 that saw 3.0 million TEUs processed by the Ports of Seattle and Tacoma, volume fell 10.2% in 2022. Congestion was less of an issue compared with other ports, with weekly median wait times peaking at 5.9 days at the start of the year and stabilizing in the following months. The vacancy rate declined 130 basis points from Q4 2021 following another year of strong net absorption, totaling 7.6 million square feet. Labor, however, does present an obstacle for occupiers, as the market had lower supply and greater demand compared with the national benchmarks of similar-sized markets and with the highest average compensation of major U.S. port markets.
2.6 M
3.0 M
-10.2% Y-O-Y
NW Seaport Alliance
183,812**
5,924
166,539
3,653**
$44,785
MSA: Seattle - tacoma - bellevue, wa
Development of a 130-acre, port-owned site by CenterPoint Properties including modern distribution centers and a railyard close to marine terminal in the heart of the port complex.
Proposal to increase the width of existing turning basins to accommodate a vessel with a capacity of 19,000 TEUs and a length of 1,310 feet with the goal of decreasing transit inefficiencies.
A package of landside transportation improvements including a suite of tech projects to improve efficiency and reliability of truck and rail access and reduce congestion.
< $200 M
$42 M
Port of Oakland
2.3 M
-4.5% Y-O-Y
#9
2.4 M
7
18
34
27
CenterPoint Landing @ Oakland Seaport
Port of Oakland Turning Basins Widening
GoPort Freight Intelligent Transportation System Project
Wait times were volatile throughout 2022, peaking at 33 days in April.
Labor is expensive given the high cost of living in the San Francisco Bay area.
I-80, I-5
Modern space options and developable land are extremely limited in Oakland, resulting in bulk warehouse users looking to the neighboring Stockton market.
KEY STATs: Oakland/East Bay
4.1%
160.1 msf
$15.41
3.9 msf
The port has witnessed declining container volume every year since 2018.
TEU volume at the Port of Oakland has fallen every year since 2018, declining a total of 8.2% in that time frame. Volatility in congestion is one of the factors for declining volumes, with median weekly wait times throughout 2022 reaching as high as 33 days, the worst seen by any major U.S. port. Total vacancy in the Oakland industrial market is the highest of West Coast port markets. However, there is a dearth of modern space in this densely developed region. Only 11% of the inventory meets the criteria of built since 2000 with a clear height of at least 25 feet, which is why tenants seeking bulk warehouses tend to look eastward to neighboring Stockton.
Oakland/East Bay
Photo Source: Adobe Stock
210,500**
4,193
164,637
4,184**
$43,722
MSA: san francisco - oakland - berkeley, ca
Completed in March 2022, the harbor was deepened from 42 feet to 47 feet with the entrance channel extended by 7 miles while the outer harbor was also deepened for 18.5 miles into the Atlantic Ocean.
By linking the Garden City Terminal's two rail yards, rail lift capacity is projected to double to nearly 1 million containers per year.
An additional 90-acres to be developed on GPA-owned land for cargo space, increasing the port’s annual capacity by 1 million TEUs in phases over the next two years.
$973 M
$128 M
$200 M
Port of Savannah
5.9 M
+5.0% Y-O-Y
#4
5.6 M
36
26
47 feet
Savannah Harbor Expansion Project
Mid-America Arc Initiative
Garden City Terminal West Project
Shipping delays spiked in mid-May and persisted through the end of December as the port picked up trade volumes from the West Coast.
Labor costs are relatively low compared to other port markets.
I-95, I-16
A robust construction pipeline has helped keep Savannah an affordable port market.
KEY STATs: Savannah
2.6%
96.9 msf
$6.71
30.5 msf
With no pandemic slow down in trade to speak of, TEU volume has grown 28.1% since 2019.
Ending 2022 as the fourth-busiest container port in the United States, Savannah continues its ascent as a major seaport, with annual TEU volume increasing 46% in just five years. Investment totaling nearly $1.3 billion has been allocated to accommodate larger ships and further expand the port’s container capacity. In the same five years, the industrial footprint in Savannah has nearly doubled, with 19.4 million square feet delivering in the last two years alone. Vacancy in port-adjacent submarkets in Savannah is near zero, pushing future development and tenants to outer submarkets along I-95 and I-16. Congestion at the Port of Savannah has worsened as trade has increased, spiking in May and remaining elevated and volatile through the rest of the year.
16,825**
906
25,289
334**
$33,122
MSA: savannah, gA
Projected to start in 2024, channels will be deepened to 55 feet to allow large-vessel traffic, both commercial and military, to move in and out of the port simultaneously.
Includes 18 semi-automated stacks, 36 rail-mounted gantry cranes, six new low-profile ship-to-shore cranes and a strengthened berth for support which will increase annual capacity to 5.4M TEUs.
Ground was broken on a new rail yard at Norfolk International Terminal with projections to double the annual rail capacity to 630,000 containers.
$225 M
$650 M
$79 M
Port of Virginia
3.7 M
+5.1% Y-O-Y
4
Norfolk Harbor Deepening and Widening Project
NIT North - Terminal Optimization Project
NIT Rail Expansion
Peaking at the end of April at nearly 12 days, wait times returned to early 2022 levels during the second half of the year.
Demand for warehouse labor exceeds that of similar metro sizes.
I-64, US-460
Low vacancy and continued port centric demand has caused substantial rent growth while remaining an affordable port market compared to options further north.
KEY STATs: Hampton Roads
2.4%
78.6 msf
39.1%
$7.22
3.5 msf
Thirteen straight quarters of sub-3.0% vacancy in Hampton Roads is no coincidence. Consistent growth in TEU volume at the Port of Virginia underpins the migration of cargo to the East Coast. A construction pipeline revolving around built-to-suit projects will continue to constrain supply and deter any run-ups in vacancy or risk of oversupply. Close proximity to I-64 and U.S. 460 gives truckers access to the larger I-95 and U.S. 60 freeways.
Despite declines in 2020, volumes are up 26.0% since 2019 making Virginia one of the fastest growing ports.
Hampton Roads
71,380**
1,824
65,232
1,419**
$35,661
MSA: virginia beach - norfolk - newport news, va
