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

The Shanghai-northern Europe spot rate slipped 2.2 percent to $1,203.
25 Jul 2014
Price drops continued to be reflected in the Shanghai Containerized Freight Index this week, as every major lane on the index saw spot rates fall.
07 Jul 2014
Carriers in the eastbound Pacific intend to increase their freight rates effective July 15 by $200 per 40-foot container for cargo moving from Asia to Los Angeles-Long Beach.
Ocean carrier rate revision roundup for July 4
04 Jul 2014
Several container lines have planned general rate increases in multiple trade routes to take effect Aug. 1...
Drewry’s benchmark spot rate from Hong Kong to Los Angeles jumped for the first time in five weeks.
02 Jul 2014
A $200 gain in the spot rate price per 40-foot container in trans-Pacific lanes could be short-lived, Drewry said today.
Bill Rooney
02 Jul 2014
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.
23 Jun 2014
Members of the Transpacific Stabilization Agreement are pushing back the date of a planned peak-season surcharge to coincide with the end of certain market rates on June 30.

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.