Latest Market Insights – Transportation and Logistics

The Headline Numbers: A Structural Shift, Not a Blip

Twenty years ago, the ports of Los Angeles and Long Beach handled roughly half of all U.S. container imports. By 2023, that combined share had fallen to about 33%, and the erosion hasn’t stopped. In the first half of 2026, both ports posted year-over-year volume declines of roughly 1.5% even as they still closed out 2025 near record levels individually: Los Angeles at 10.2 million TEU and Long Beach at a calendar-year record of 9,881,595 TEU, up 2.4%. Meanwhile, Houston set its own record at 4,303,345 TEU, up 4%, on the back of expanded ship channel capacity, and New York and New Jersey closed the year at 8,897,531 TEU, also a record.

The pattern is consistent even where the individual numbers are still growing: West Coast volume is holding roughly flat to slightly down, while East and Gulf Coast ports keep taking a larger slice of a market that isn’t growing as fast as it used to.

Why the Shift Is Happening

Two forces are doing most of the work. The first is infrastructure investment on the receiving end: Savannah’s $220 million Mason Mega Rail facility doubled on-dock intermodal capacity to 2 million TEU annually, giving it direct unit-train service to Chicago and Memphis, while Houston’s expanded ship channel is what’s driving its consecutive record years. The second is simply risk diversification. After years of West Coast labor negotiation uncertainty and, more recently, Panama Canal drought disruptions that briefly made East Coast routing look risky too, many importers concluded that routing everything through one coast is itself the risk, regardless of which coast it is.

Cost has reinforced the trend at times. In May 2026, a trans-Pacific rate surge of 33% to 37% hit West Coast lanes disproportionately hard as carriers withdrew capacity through blank sailings, while East Coast lanes routed through the Panama Canal ran at comparably lower rates that same month, despite a transit time that’s still 7 to 15 days longer.

The Panama Canal Isn’t Fixed, It’s Just Not in Crisis Right Now

The canal’s 2023-24 drought, which cut daily transits from a normal 34 to 38 down to as few as 18, is part of why some shippers hedged toward the West Coast and rail in the first place. That crisis has passed, but 2026 is a reminder that the underlying vulnerability hasn’t. A developing El Nino pattern has pushed the Panama Canal Authority through a series of phased draft reductions at the Neopanamax locks, stepping down from 49.5 feet in July to 47.5 feet by early September, with daily transit slots trimmed only modestly, from around 36 to 34. The Authority has been explicit that this is a precautionary, far milder response than the 2023-24 crisis, not a repeat of it, but the fact that it’s happening again underscores why the canal remains a variable rather than a constant in routing decisions.

The Caveat: How Much of 2025’s Growth Was Pulled Forward

Not all of last year’s East and Gulf Coast gains represent a durable shift in demand. Trade press coverage of Houston’s record year, in particular, noted that much of the growth reflected cargo pulled forward ahead of tariff changes rather than steady underlying volume. That doesn’t undo the structural case for diversification, but it does mean 2026 and 2027 comparisons need to be read carefully. A port that set a record partly on pulled-forward cargo can look like it’s cooling off the following year even while its actual competitive position keeps improving.

What This Means for Shippers and Investors

The practical case for multi-coast routing no longer rests on a single disruption story; it rests on a market that has been quietly rebalancing for two decades and shows no sign of reversing. For shippers, that means treating port diversification as a standing part of network design rather than a reaction to the next crisis, and building contract and drayage relationships on both coasts before they’re needed rather than after. For investors evaluating port-adjacent infrastructure, rail connectivity, or terminal capacity, the more interesting opportunities are increasingly on the East and Gulf Coasts, where volume growth, infrastructure investment, and improved inland rail access are compounding, even as the West Coast remains the larger and faster gateway for time-sensitive trans-Pacific freight.