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 to 2016 contracting season; deepening industry losses are 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.
Containers from more than 30 countries and the U.S. that have recorded cases of the Zika virus are now subject to extra scrutiny from Chinese regulators.
24 Aug 2016
Many U.S. exporters are still confused about how to meet Chinese rules aimed at preventing the spread of the Zika virus.
27 May 2016
An increase in Asian freight shipped straight to Mexico means fewer trucks heading south from the U.S., tighter capacity for northbound shipments.
04 Jan 2016
Carriers are finally achieving some measure of relief in freight rates as vessel load factors improve with the approach of Chinese New Year. Spot rates on the Shanghai Containerized Freight Index spiked to both the West and East coasts this week in advance of the two-week celebrations that begin on Feb. 8.
Panama Canal
16 Sep 2015
Volume-based toll reductions for container lines that regularly deploy large vessels through the expanded Panama Canal will make the canal route from Northeast Asia to the U.S. East Coast highly competitive with West Coast and Suez Canal routings, a Panama Canal Authority executive said.
15 Sep 2015
A year-over-year drop in worldwide TV shipments underscores the link between shifts in global currency values, consumer sentiment and shipping volumes.

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.