Trans-Pacific Trade

The trans-Pacific ocean shipping market is by far North America’s largest trade lane, accounting for nearly 20 million 20-foot-equivalent container units in the U.S. trade alone in 2012.

The market is dominated by imports by large retailers such as Wal-Mart, Target, Best Buy, Home Depot and Lowe’s, which, unlike in other markets, tend to contract directly with ocean carriers rather than through forwarders, as is typically the case in the Asia-Europe market. As a result of the one-year contracts that retailers and other large shippers typically sign as of May 1 each year, freight rates in the trans-Pacific eastbound trade tend to be less volatile than in Asia-Europe.

Key developments in the trans-Pacific include the approaching 2015 expansion of the Panama Canal and its potentially huge impact on routing of Asia goods into North America, Canadian West Coast ports’ growing success in attracting U.S.-bound cargo, and West Coast ports’ expected response to these competitive challenges.

Exports moving to those markets typically are lower-value commodities such as wastepaper and scrap that keep China’s manufacturing and packaging industries humming.

Special Coverage

Unless something changes dramatically, container lines risk a repeat of the brutal 2015-16 contracting season, deepening industry losses set to approach $10 billion this year alone. 

News & Analysis

09 Nov 2016
US importers of containerized goods from Asia should expect to pay more for their 2016-2017 contracts and be prepared to say goodbye to giveaways, such as free detention and chassis, said the head of a discussion group of container lines on Wednesday.
04 Nov 2016
November should signal the end of the peak-shipping season in the eastbound trans-Pacific trade, but spot rates suggest the peak season is still in swing.
27 Oct 2016
Trans-Pacific eastbound spot rates are building despite the “unpredictable” market, but the Hanjin effect is ebbing.
17 Oct 2016
“To give up the benefits of trade is horrible,” said Paul Bingham, vice president of Economic Development Research Group.
21 Sep 2016
Growth in trans-Pacific volumes has been fairly static this year for non-vessel-operating common carriers, but consolidation, new alliances, and Hanjin’s collapse present new opportunities.
26 Aug 2016
Matson will build two container/roll-on, roll-off ships.

Commentary

Rates in the trans-Pacific eastbound trade from Asia to North America are starting to resemble the paltry Asia-Europe and trans-Pacific westbound numbers. Within a couple weeks, we may have three-digit numbers for spot rates for 40-foot containers moving from China-based ports to Los Angeles and Long Beach. I can’t recall seeing rates this low in my 42 years in the business.