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

08 Apr 2021
Zim’s launching of another expedited trans-Pacific service reflects the container line’s ability to quickly capitalize on rising e-commerce demand in the United States.
18 Mar 2021
The consensus among shippers, forwarders, and carriers is that strong consumer demand in North America will continue through the second quarter and into the traditional peak season.
11 Mar 2021
Container line CEOs and others told the JOC's TPM21 conference that carriers have been doing their best to adjust to volumes that surged to record levels in the second half of 2020 after plummeting during early COVID-19 lockdowns.
04 Mar 2021
Too often procurement “activity” at a company is episodic and rarely strategic, and this is particularly true in the transportation category.
01 Mar 2021
Backups at US ports will diminish gradually over several months only as COVID-19 vaccines are distributed and infection rates slow, IHS Markit’s chief economist told JOC’s virtual TPM21.
24 Feb 2021
Container carriers that deployed extra loaders and those that provided express services in the resurgent Asia-US trade saw the largest volume gains in 2020
22 Feb 2021
Entering annual trans-Pacific contract talks, carriers — in a position of negotiating strength after months of sustained demand growth — are signaling they will push for less free time and resist expanding volume commitments without significant rate increases.
19 Feb 2021
Trans-Pacific shippers are being hit with a double whammy of huge rate hikes and poor service as ports and inland supply chains struggle to handled a seemingly unending deluge of imports from Asia into North America.
18 Feb 2021
Just when the container shipping system needed more capacity to handle resurgent volumes, the reduced circulation of containers caused a contraction in available capacity, driving up rates and further compounding massive cargo delays.
04 Feb 2021
Under pressure from an unexpected second-half surge in demand, US importers turned to core production sources in China as the urgency of not missing orders outweighed additional tariff and manufacturing costs.
26 Jan 2021
Shippers can complain, but pricing power — at least for now — has shifted away from shippers due to carrier consolidation and growing capacity discipline seen most dramatically in the swift spring withdrawals following the onset of the COVID-19 pandemic. That puts pressure on shipper to engage more with carrier not less.
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.

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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