Port-Adjacent Land Hard To Come By As Shipping Logjam Continues

Clogged ports are a given on both coasts these days, thanks to sustained levels of e-commerce sales, and the need for shipping capacity has ramped up demand for land near ports.

The sustained volume of goods coming into the country via its ports due to the ongoing e-commerce boom that began in 2020 is driving logistics firms and even port operators to search high and low for a place to store all those shipping containers. 

“In Los Angeles, unless you dig up some more ocean, you don’t have any more terminals, and it’s the same thing in New York and New Jersey,” IMS Worldwide President Curtis Spencer told The Wall Street Journal. The firm is involved in developing a container-transfer development in the Inland Empire.

Storage sites offer a way to clear out the containers that would normally be waiting at the port. The regional manager of the Georgia Ports Authority, which runs Savannah’s port, said that in the past, it wasn’t uncommon for loaded containers to sit at the port for up to five days. Now, they are there for as many as 10 days. 

To help clear that out, the authority has leased six lots to use as temporary spaces to store shipping containers, the WSJ reported. Some of the lots are out of state, in North Carolina and Alabama.

Some of the big names in retail have been finding their own pop-up sites for container storage for a while now. Walmart has previously leased space in California and in Georgia, near the Port of Savannah, so that its containers are separated from the rest of the pile at the ports and easily accessible. 

Many of the suitable sites are now spoken for, it seems. The demand for vacant space near some ports has even pushed the rents for vacant land as high as rents for buildings in some cases. One company, Alterra Property Group, which specializes in industrial outdoor storage, told the WSJ that it is considering tearing down a building that is currently rented by a building materials tenant because it’s getting so many calls from companies that want to use the site for container storage.

Los Angeles’ ports have been suffering for about two years from a lack of space to put shipping containers in transit to and from cargo ships. Last year, Port Envoy John Porcari highlighted the lack of availability of off-site properties for staging shipping containers as a particularly challenging aspect of righting the supply chain trouble in Southern California and at other major ports nationwide.

Properties can’t simply be vacant, they also have to be large enough to accommodate a significant number of containers, be properly zoned for industrial use, and be close to railroads and freeway networks for the trucks and trains that move the containers to the next stop on their journey.

In October, Cushman & Wakefield Managing Director Rooney Daschbach told Bisnow that smoothing out the kinks at LA’s ports would require “more area to put all this stuff so it clears out the ports and the docks themselves, but there’s no way to do that when there’s no land.”