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.

News & Analysis

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.
02 May 2015
A deeper channel and additional berths will help South Korea's Busan Port Authority keep up with rising container volumes and bigger box ships.
01 Mar 2015
Cargo interests undoubtedly are relieved that the International Longshore and Warehouse Union and the Pacific Maritime Association reached a tentative contract deal on Feb. 20 after more than nine months of unexpectedly difficult negotiations, but now it’s time for importers and exporters to reassess their commitment to West Coast ports.
Hyundai container ship at APM Terminals in Los Angeles
28 Feb 2015
The economic fundamentals of the trans-Pacific trade are strengthening, setting the stage for what would normally generate rapid growth in container volumes, especially in the eastbound trade. But this isn’t a normal year.
30 Dec 2014
The year 2015 has not yet begun but is already promising to be one fraught with complexity and unpredictability for beneficial cargo owners in the eastbound trans-Pacific.
21 Nov 2014
Five carriers today joined Mediterranean Shipping Co. in announcing congestion surcharges on cargo heading from Asia to U.S. West Coast ports.

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.