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

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.
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.
29 Aug 2014
At least two ocean carriers are cutting intermodal fuel surcharges for dry and refrigerated shipments to and from the United States, effective Oct. 1, as a result of falling diesel prices.
The spot rate to the U.S. East Coast was $4,344 per 40-foot container this week.
29 Aug 2014
While some September 1 general rate increases seem to be successful, others have not taken hold, and spot rates in those lanes may drop to new lows.
Drewry’s Hong Kong-Los Angeles container freight rate benchmark was unchanged for the second week in a row at $2,075 per FEU.
27 Aug 2014
Spot rates in the trans-Pacific trade are holding steady as peak-season volumes continue to keep capacity tight on trips to the U.S. East and West Coasts.
Containers in port
25 Aug 2014
Cargo is being rolled and space allocations are being cut on trans-Pacific eastbound services as capacity continues to tighten to the U.S. East Coast. Space to the U.S. West Coast is also extremely tight, shippers say, reflected in stronger volumes moving through West Coast ports.

Commentary

Nightmare scenarios are occurring all day, every day at the two biggest U.S. container ports, and the customers receiving some of the worst service are among the nation's largest shippers.

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.