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

22 Nov 2022
The highs for the container shipping industry, as measured by profits and pricing power, hit atmospheric levels, raising questions of just how steep a fall is in store.
22 Jun 2022
With new incentives, the Port of New Orleans and Louisiana state economic officials are targeting retail distribution centers to ease export-import balance that’s cost the port service and volumes.
03 Jun 2022
Trans-Pacific container lines are adding capacity ahead of an expected early peak season, but blank sailings will continue to challenge North American importers even as Shanghai reopens.
19 May 2022
China continues to hold the largest share of US imports despite years of retaliatory tariffs and the ongoing efforts of US importers to diversify their sourcing to countries such as Vietnam, India, and Brazil.
04 May 2022
Chinese exporters could produce another trans-Pacific bullwhip when stalled shipments start moving again, with major stakeholders warning of a surge of delayed shipments.
27 Apr 2022
The longer the Chinese lockdowns last the more intense the scramble by US importers to secure factory production and transport capacity, potentially mirroring the whiplash of order cancellations in early 2020 that were followed by unprecedented demand.
13 Apr 2022
Major retailers and multinationals may have gained greater control of their container shipping supply chains, but smaller US importers lack the scale and are still scrambling for transport capacity.
09 Mar 2022
In reporting a $4.6 billion profit in 2021, Zim Integrated Shipping Services warns shipping disruption could bleed into 2023 but it expects some spot rate normalization in the second of half of this year.
16 Feb 2022
Two years after the pandemic reached US shores, logistics managers at US companies that import from Asia are in the toughest service contract negotiations of their careers, according to conversations with more than a dozen importers.
18 Nov 2021
The looming storage tariffs in Los Angeles and Long Beach are starting to force carriers, marine terminals, and shippers to break through the gridlock of competing interests.
12 Nov 2021
Electricity shortages slowing Chinese factory output and lowered production in Vietnam due to COVID-19 lockdown measures are providing a slight — and likely temporary — easing of short-term Asia–US container rates.
12 Nov 2021
Container lines and their largest import customers are beginning trans-Pacific service contract negotiations earlier month, driven by shippers’ concerns about securing enough contracted space and carriers’ stronger positioning.
09 Nov 2021
The World Shipping Council, representing major container lines, is asking federal maritime regulators to hold off on weighing on new Southern California port tariffs until the fees have been implemented on Nov. 15.
03 Nov 2021
The National Industrial Transportation League wants maritime regulators to clarify whether the new Southern California port fees would fall under rules on demurrage if container lines pass them on to shippers and consignees.
03 Nov 2021
Container lines say the unexpected announcement of a new port tariff targeting excessive container dwells In Southern California is the latest example of being unfairly targeted by politically driven and commercially unviable directives.
21 Oct 2021
California Governor Gavin Newsom has signed an executive order meant to provide temporary storage for containers piling up at West Coast ports and free up trucks to carry more goods.
15 Oct 2021
A flood of imports into the Pacific Northwest is boosting spot truckload rates out of Seattle as shippers facing delays and intermodal container shortages seek new routes for freight moving inland.
07 Oct 2021
A dramatic decline in eastbound trans-Pacific spot rates this week is seen as a temporary reprieve for US importers that was caused by production cutbacks in China and a continuous influx of new capacity of chartered ships.
24 Sep 2021
Pinched at both Asian load ports and US receiving ports, trans-Pacific carriers in August registered their fourth consecutive month of deteriorating on-time performance.
20 Aug 2021
The seeking of legal resolutions to conflicts between shippers and container line shippers and carriers over service contracts brings a new set of challenges to both sides, writes analyst Lars Jensen.
18 Aug 2021
Zim Integrated Shipping Services said it expects governmental pressures on container lines to slow steam ships will blunt significant new capacity additions slated to hit the water 2023.
18 Aug 2021
DB Schenker’s Thorsten Meincke says container lines are doing their “best possible to get the supply chain running,” although he warns US landside challenges will continue to challenge efforts.
13 Aug 2021
Although US imports from Asia have returned to single-digit growth after 11 consecutive months of double-digit increases, the cargo base is so large that even incremental growth this peak season will result in record import volumes.
12 Aug 2021
By transloading railed goods from ocean containers into domestic containers at Ashcroft inland port, Canadian Tire aims to take greater control of its import flows through the Port of Vancouver.
12 Aug 2021
CMA CGM and Cosco Shipping have begun diverting ships away from a Ningbo marine terminal closed due to a COVID infected worker, raising the specter that congestion will build at other port terminals.
04 Aug 2021
Federal maritime regulators have ordered eight container lines to provide details showing how port congestion surcharges meet legal and regulatory requirements, the latest escalation in increased US oversight of container shipping.
29 Jul 2021
The backlog of vessels outside the ports of Los Angeles and Long Beach is rapidly approaching levels seen during last year’s peak season due to continued explosive imports and inland rail bottlenecks.
29 Jul 2021
The average price to ship an FEU from Shanghai to Los Angeles hit an all-time record, according to the Drewry World Container Index, and container lines will begin levying another round of surcharges starting as early as Aug. 1.
27 Jul 2021
Expectations are that reliability is likely to fall further in the coming months as carriers add new services and deploy extra-loader vessels to meet peak season demand that arrives amid the never-ending onslaught of imports from Asia.
21 Jul 2021
Forwarders say US importers of lower-value cargo from Asia and those with low margins are increasingly priced out of the trans-Pacific market as peak season volumes further tax the shipping system.
18 Jun 2021
US imports from Asia grew faster at West Coast ports than at East and Gulf coast ports in January through May as carriers launched a half-dozen new trans-Pacific services to handle the continuing boom in imports from Asia.
15 Jun 2021
Container lines and forwarders say Yantian International Container Terminals is regaining terminal capacity amid a COVID-19 outbreak and is allowing more trucks to drop off exports.
15 Jun 2021
Carriers posted an unprecedented level of profitability in the first quarter, as container shipping companies capitalized on a market in which the supply-demand balance is firmly in their favor.
14 Jun 2021
Current conditions in the trans-Pacific trade, with strong demand and severe capacity shortages leading to hyper-charged freight rates, are temporary, but the question is: how temporary?
14 Jun 2021
Trans-Pacific carriers are expected to follow their June 1 general rate increase with another on June 15 as huge demand for space and increasing costs for equipment and trucking at Asian load ports continue unfettered.
13 Jun 2021
Peter Friedmann, executive director of the Agriculture Transportation Coalition, outlines proposals to Congress to address what his members’ consider unfair detention and demurrage, and how to ensure container lines honor their common carriage responsibilities.

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.