Trans-Pacific Trade

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

The results of the 2014-15 service contracting season in the eastbound Pacific are in, and from the perspective of ocean carriers, they’re not pretty.

News & Analysis

15 Oct 2014
A record number of ship deliveries will combine with declining scrapping rates and mid-single-digit growth in volume to extend the gap between container ship supply and demand through 2015, according to a leading maritime research consultant.
07 Oct 2014
Containerized exports from Asia to Europe and North America increased year-over-year in August, but spot rates in the Asia-to-Europe and North America trade lanes dropped, according to Container Trade Statistics.
03 Oct 2014
UPS added 766 U.S. postal codes to its UPS Worldwide Express Plus network in the third quarter, extending the reach of its international earliest morning service deeper into the U.S.
03 Oct 2014
When the new, expanded Panama Canal finally opens sometime in early 2016, an armada of ships twice the size of those capa
Drewry’s benchmark spot rate from Hong Kong to Los Angeles jumped 14.5 percent, or $300 per FEU this week.
03 Sep 2014
After weeks of stagnation, Drewry’s benchmark spot rate from Hong Kong to Los Angeles jumped this week on the back of Sept. 1 trans-Pacific general rate increases.
Weekly wrap-up for Aug. 30, 2014
30 Aug 2014
Members of the International Longshore and Warehouse Union ratified a new collective bargaining agreement with grain handlers in the Pacific Northwest, ending a two-year battle between the two parties.

Commentary

If there’s a theme to this year’s TPM Conference, it’s that 2014 is the year of the game-changer in international logistics. The changes the industry is grappling with as we congregate in Long Beach this week are profound and will define the main challenges confronting shippers, carriers, third-party logistics providers and others possibly for years.

Video

William Rooney, Kuehne + Nagel vice president, responds to questions about the current slower growth environment and the NVO ability to provide “something broader than rates” as the trans-Pacific trade evolves.
Stephane Rambaud, senior vice president at C.H. Robinson, discusses the integration of Phoenix International, which the logistics firm acquired in 2012, the company's consolidation services, and the challenges of volatility in the trans-Pacific trade.
Steven Cernak, chief executive and port director of Port Everglades, and James Hertwig, president of Florida East Coast Railway, discuss their organizations’ recent performance, their partnership in a new intermodal container transfer facility, and the opportunities they see and projects they are pursuing for further growth.