Ports go deep to dock bigger ships

Today, US ports handle 95 percent of the volume of goods coming in or out of the country, according to federal statistics. However, "for all intents and purposes, container ships are all under foreign flags," says Mr. Cudahy. Where Americans make their money is in unloading and transporting the containers as they head from the docks to the checkout counters, he says.

Shipping companies have always taken the path of least resistance when it comes to managing routes and keeping costs in check. And with container technology improving and outdated ports straining to handle volumes they never expected, trading routes are changing quickly.

Volume at Pacific ports like Seattle and Long Beach, Calif., grew more than 15 percent last year, which slowed unloading speeds, therefore increasing shipping costs. "One reason the West Coast ports are congested is because the Panama Canal is no longer suited to handle the [larger, deeper] ships coming out," says Mr. Levinson. "So for large ships to get from Singapore to Savannah [Ga.], they can either head around Africa or go to L.A. to offload."

But if for the moment Los Angeles is an attractive option, "that advantage is being lost because of their inability to move cargo," says Mr. Eagar. "Their rail system [built decades ago] is grossly undersized."

Panama, for one, has discussed expanding its canal to meet new industry standards. But if Panama increases tolls to cover what might become a $10 billion price tag, container companies could quickly draw trade routes around the canal to avoid the added cost, Levinson warns. "The industry is extremely price sensitive and not particularly loyal to a particular route," he says.

To find the cheapest combination of open access, location, and infrastructure, many shipping firms are eyeing previously untapped sites.

Just south of the Alaska border, officials in Prince Rupert, British Colombia, are trying to turn their frigid frontier town into a Northwest shipping hub. Their new port, scheduled to open next year, offers a tempting package: the deepest North American harbor not trapped under ice, connection to Canada's rail system, and a location 1,000 miles closer to Hong Kong than is Los Angeles.

Even if container ships head toward deeper waters, Boston, a city historically tied to its docks, is not about to surrender its port business. Over the past decade, it has nurtured its standing as a cruise-line destination. It has also encountered controversy as a major liquid natural gas terminal. "There are a lot of questions that coastal cities have to answer when it comes to sea trade," Cudahy says. "Remember, the container industry is only 50 years old."

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