The Ports Are Looking to the Future

LOS ANGELES—When the Port of Long Beach and the Port of Los Angeles welcomed the CMA CGM Benjamin Franklin, the world's largest cargo ship, in February, it established its competitive edge both domestically and internationally. The L.A. and Long Beach Ports are now the only two ports in the US that can accommodate the world's largest cargo ships—and the benefits were seen instantly. Cargo volumes soared the month of February to the highest numbers in history, as did trade values,  which climbed to $58.6 billion in the first two months of the year.

“The evolution of the container ship is happening because the demand of goods is so strong,” Christopher Beck, managing director at Newmark Grubb Knight Frank, tells GlobeSt.com. “As the demand continues to grow, the Los Angeles and Long Beach Ports are the only ports that can sustain and accommodate this size of ship and the future of the ships as they evolve and grow. Other ports in the US cannot sustain that growth for a myriad of reasons. In essence, as the ports evolve, we can, as an industry, continue to evolve as well. It is really a partnership.” NGKF created this infographic, which uniquely illustrates the increase in container ship size and in cargo volumes.

Although the Los Angeles and Long Beach Ports already outpace other US ports and rank among the top ports in the world, this move ensures that the ports will continue to be integral to the global supply chain well into the future by evolving in step with technological and other advances in the supply chain, whether that is accommodating these large ships, renovating bridges or enhancing sustainability. Other ports in the US have fallen short of keeping up. “There was some talk that some other ports that were aggressively going after L.A. and Long Beach, and they are attempting to do it,” says Beck. “In a lot of instances, ports don't have the ability to sustain that growth.”

Beck attributes much of the ports' natural success to the density of the surrounding area. From the Ventura County line to the Mexican border, there are 15 million people, or, from the ports' perspective, 15 million consumers. “That really isn't duplicated anywhere else in the United States,” says Beck. “In a 24-36 hour period, from the time the ships arrive to distribution, consumers can receive those items. You can't recreate that anywhere else, and as you add 12-hour increments onto that, you are into Nevada or Utah or Northern California. There is so much exposure to those goods in such a quick period of time.”

While keeping an internationally competitive port is good for a lot of things—not the least of which is our industrial market—Beck says that a lot of people overlook the economic benefits of the ports. In some ways, he says, they are as big of economic drivers as the tourism and entertainment industries in Southern California. “Everyone always says tourism and entertainment are the big economic drivers for Southern California, but as these ports continue to grow, we will clip at the heels and continue to clip at the heels of those industries in years to come, if we are not already there now,” he says. “It creates so much employment and development, and I don't think that people outside of the real estate world know how many goods come through the port every day. If you look at the graph and you add Newark/New Jersey and you add Detroit together, it doesn't equal the volume that we have here.”

The CMA CGM Benjamin Franklin and the Maersk Edmonton, the world's two largest ships, are scheduled to return this month.

LOS ANGELES—When the Port of Long Beach and the Port of Los Angeles welcomed the CMA CGM Benjamin Franklin, the world's largest cargo ship, in February, it established its competitive edge both domestically and internationally. The L.A. and Long Beach Ports are now the only two ports in the US that can accommodate the world's largest cargo ships—and the benefits were seen instantly. Cargo volumes soared the month of February to the highest numbers in history, as did trade values,  which climbed to $58.6 billion in the first two months of the year.

“The evolution of the container ship is happening because the demand of goods is so strong,” Christopher Beck, managing director at Newmark Grubb Knight Frank, tells GlobeSt.com. “As the demand continues to grow, the Los Angeles and Long Beach Ports are the only ports that can sustain and accommodate this size of ship and the future of the ships as they evolve and grow. Other ports in the US cannot sustain that growth for a myriad of reasons. In essence, as the ports evolve, we can, as an industry, continue to evolve as well. It is really a partnership.” NGKF created this infographic, which uniquely illustrates the increase in container ship size and in cargo volumes.

Although the Los Angeles and Long Beach Ports already outpace other US ports and rank among the top ports in the world, this move ensures that the ports will continue to be integral to the global supply chain well into the future by evolving in step with technological and other advances in the supply chain, whether that is accommodating these large ships, renovating bridges or enhancing sustainability. Other ports in the US have fallen short of keeping up. “There was some talk that some other ports that were aggressively going after L.A. and Long Beach, and they are attempting to do it,” says Beck. “In a lot of instances, ports don't have the ability to sustain that growth.”

Beck attributes much of the ports' natural success to the density of the surrounding area. From the Ventura County line to the Mexican border, there are 15 million people, or, from the ports' perspective, 15 million consumers. “That really isn't duplicated anywhere else in the United States,” says Beck. “In a 24-36 hour period, from the time the ships arrive to distribution, consumers can receive those items. You can't recreate that anywhere else, and as you add 12-hour increments onto that, you are into Nevada or Utah or Northern California. There is so much exposure to those goods in such a quick period of time.”

While keeping an internationally competitive port is good for a lot of things—not the least of which is our industrial market—Beck says that a lot of people overlook the economic benefits of the ports. In some ways, he says, they are as big of economic drivers as the tourism and entertainment industries in Southern California. “Everyone always says tourism and entertainment are the big economic drivers for Southern California, but as these ports continue to grow, we will clip at the heels and continue to clip at the heels of those industries in years to come, if we are not already there now,” he says. “It creates so much employment and development, and I don't think that people outside of the real estate world know how many goods come through the port every day. If you look at the graph and you add Newark/New Jersey and you add Detroit together, it doesn't equal the volume that we have here.”

The CMA CGM Benjamin Franklin and the Maersk Edmonton, the world's two largest ships, are scheduled to return this month.