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.

News & Analysis

31 Dec 2020
With the massive surge in US imports from Asia in the second half of 2020 projected to continue well into 2021, year-over-year growth is likely to accelerate thanks to comparisons with a weaker first half of 2020.
31 Dec 2020
Vessel space in Asia is so tight that US importers are booking shipments three and four weeks out in order to get their containers on board.
23 Dec 2020
Unprecedented trans-Pacific volumes and steadily growing exports of petrochemicals, agricultural products, and resins have prompted members of THE Alliance to launch a new direct service between Asia and the US Gulf.
11 Dec 2020
The real possibility that Asia imports will stay elevated through at least the first quarter, coupled with labor and trucking shortages, are creating a so-called perfect winter storm for more port congestion.
25 Nov 2020
Shippers shouldn’t expect carriers to easily agree to increasing their minimum quantity commitments (MQC) within trans-Pacific service contracts, said Philip Damas, head of Drewry Supply Chain Advisors
18 Nov 2020
Zim this week announced new Asia-Australia and US-Mexico services and said another new service announcement would come soon.
04 Nov 2020
Matson says e-commerce demand for expedited Asian service will remain high even when the impact of the pandemic COVID-19 recedes.
30 Oct 2020
The disruption and unpredictability caused by the pandemic earned trans-Pacific carriers some early 2020 patience from their customers, but that goodwill is fading as service and price diverge sharply as contract talks near.
16 Oct 2020
Two recent studies show how cheaper rail prices are helping drive port routing changes, and a new JOC analysis of data from the Intermodal Association of North America reveals how significant the shift has been in just five years.
25 Sep 2020
With economists believing the sharp economic recovery seen in the US during the third quarter is already sputtering, questions are growing about how long the import surge will last.
22 Sep 2020
Despite the decline in forwarder market share, more than half of the top 25 non-vessel-operating common carriers (NVOs) in the eastbound trans-Pacific trade handled more volume in the first eight months of 2020, with six recording double-digit percentage increases.
21 Sep 2020
The intensity of the Asia import surge is such that executives believe a return-to-normal container flow might still take months given how out of balance the system has already become in recent weeks.
21 Sep 2020
With cargo volumes and spot rates out of Asia surging as the United States and other countries begin to climb out of the COVID‑19 recession, US importers are increasingly turning to non-vessel-operating common carriers (NVOs) to secure capacity.
18 Sep 2020
Amidst confusion involving blank sailings, extra-loaders, and announcements this past week by government regulatory agencies in Beijing and Washington, spot rates in the eastbound trans-Pacific continued to climb higher.
11 Sep 2020
In what is still very much an evolving scenario, carriers are digesting what they were told by the Chinese government and how it will impact their businesses going forward.
07 Sep 2020
Data shows that whether it is for e-commerce or inventory restocking, importers and their forwarders and carrier partners are favoring Southern California, and there’re plenty of reasons for Los Angeles-Long Beach to hold that oft-begrudging allure among e-tailers.
21 Aug 2020
Forwarders say shipping lines in the eastbound trans-Pacific are telling them to prepare for a Sept. 1 general rate increase (GRI) that could push West Coast spot rates above $4,000 per FEU.
10 Aug 2020
Spot rates from Asia to both US coasts spiked by several hundred dollars last week as carriers in the eastbound trans-Pacific prepare to implement an Aug. 15 general rate increase.
06 Jul 2020
The move, bringing an end to APL’s 170-year legacy as a commercial trans-Pacific carrier, is part of the Marseille-based shipping group’s broader effort to clarify its offering to customers since a series of major acquisitions.
12 Jun 2020
Eastbound container spot rates from Asia to the US West Coast rose to their highest point in a decade this week as an unexpected spike in volumes collided with blank sailings by carriers.
07 Apr 2020
A coalition of 80 agricultural shippers is urging the Trump administration to get involved in the detention and demurrage debate now before the Federal Maritime Commission, saying the issue is even more important now amid supply chain disruptions caused by the coronavirus pandemic.
01 Apr 2020
The Port of Savannah will be closed to truckers on Saturdays this month due to blank sailings and BCOs unwilling to retrieve containers with stores and factories closed due to the coronavirus disease 2019 (COVID-19) pandemic.
31 Mar 2020
The Federal Maritime Commission will engage stakeholders on how it can maintain cargo fluidity in the supply chain during the coronavirus disease 2019 (COVID-19) pandemic in a bid to avoid disruption.
27 Mar 2020
Pressure is building as some shippers fail to pick up containers because warehouses are full or closed due to not being deemed essential service providers responding to COVID-19, or because retailers have requested delayed deliveries at distribution centers.
25 Mar 2020
Reports of cancelled Asia to North America ocean bookings are a sharp reversal from just a few weeks ago, when shippers were looking to accelerate shipments through the supply chain to replenish inventories depleted due to the prolonged China shutdown.
19 Mar 2020
While truck activity is rampant for essential goods, US fashion footwear freight movement is slowing to a halt as department stores shut down, according to supply chain executives.
12 Mar 2020
Wracked by the US-China trade war and the coronavirus disease 2019 (COVID-19), US imports from Asia and China in February hit three and four-year lows, respectively.
28 Feb 2020
COSCO Shipping and OOCL again handled the largest share of US container imports from Asia in 2019, while CMA CGM and APL maintained the top spot in westbound US–Asia trade, despite declining overall volumes.
24 Feb 2020
Driven mostly by increases in bunker fuel charges due to the IMO 2020 global low-sulfur fuel requirement, carriers say they intend to achieve all-inclusive freight rates that are slightly higher than the rates in last year’s service contracts.
21 Feb 2020
The vulnerability of the container shipping supply chain has been repeatedly — and painfully — exposed, but as 2020 gets underway, the industry is facing disruption on a scale not seen in its more than 60-year history as a result of the coronavirus (COVID-19) outbreak in China.
05 Feb 2020
Maersk will blank six sailings this month due to the coronavirus, and said while the backlog of barge operations from Wuhan was easing, it was working with reefer shippers to mitigate port plug-in power capabilities.
NYSHEX volume tripled, membership doubled in 2019
29 Jan 2020
New York Shipping Exchange (NYSHEX) said 96.4 percent of contracts last year were fulfilled, meaning that carriers accepted the cargo for the sailing it was booked for and cargo owners and non-vessel operating common carriers delivered the containers they contracted.
31 Dec 2019
Despite an easing of trade tensions between the United States and China, shippers will continue to diversify their sourcing options to mitigate risk.
24 Dec 2019
With growth in trade between Asia and North America projected to continue at a slow, steady pace in 2020, container carriers will be focused on keeping a floor on rates and recouping the added cost of low-sulfur fuels.
13 Dec 2019
A number of ocean carriers are adjusting their detention and demurrage fees in the next 30 days, causing shippers to pay more for these penalties being reviewed by the Federal Maritime Commission.
27 Nov 2019
The extent to which US retailers rebuild their inventories post-Christmas will provide a hint as to how consumers will respond to mixed economic signals and higher prices on some Chinese goods.

Commentary

The Trump administration's recent labeling of China as a currency manipulator is unlikely to have the desired impact with respect to larger trade negotiations.

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