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

Post-consolidation, US container trade has been dominated by the largest ocean carriers and alliances, but smaller, independent lines continue to find a market in the trans-Pacific.

News & Analysis

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.
07 Nov 2019
Unless the Los Angeles-Long Beach ports attract more cargo, they could wind up stuck with a hefty bill for the intermodal corridor’s bond debt, a report says.
19 Aug 2019
Carrier market share in the trans-Pacific is not expected to change much in the next few months, in part because carriers will manage capacity by blanking individual sailings and deploying extra-loader vessels to handle import surges.
16 Aug 2019
Declining eastbound trans-Pacific container spot rates this week indicate that predictions of a weak peak season could be accurate.
14 Aug 2019
The containerized shipping industry was able to convince the US Trade Representative to take cranes and containers off a list of tariffs going into effect on Sept. 1 and Dec. 15.
08 Aug 2019
Trans-Pacific container carriers have learned that by tactically withdrawing full weekly sailings, or in some cases maintaining the sailing but skipping certain Asia ports, they are able to maintain a floor on rates without severely disrupting the flow of cargo.
08 Jul 2019
Uncertainty surrounding on-again, off-again tariffs by the US on Chinese products has seen a growing shift in US import volume to Southeast Asia.
28 Jun 2019
Spot rates in the eastbound trans-Pacific this week got a pop from the pending July 1 GRIs, but economists are predicting a slow-growth year for the US economy, and carriers’ only hope to keep pricing from declining this peak season is to manage capacity through blank sailings.
14 Jun 2019
US agriculture exporters should brace themselves for a prolonged trade war that will continue to erode their share of the all-important China market because China won’t budge on certain demands, and Trump’s self-image is inflated by being tough on China.
11 Jun 2019
There are plenty of reasons to expect another wave of front-loading, which in the second half of 2018 kept spot rates to the West Coast above $2,000 per FEU for 16 straight weeks and rates to the East Coast above $3,000 for 17 weeks.
07 Jun 2019
Global Port Tracker forecasts slight increases in US imports this peak season, but not the 10-15 percent year-over-year decline predicted by Sea-Intelligence and Drewry.
03 Jun 2019
The outlook for air cargo is turning negative as carriers face headwinds in the form of trade upheaval and falling demand.
03 Jun 2019
China has supplied nearly two-thirds of containerized US household goods imports for several years, but increased tariffs are likely to curtail volumes.
31 May 2019
Exports of containerized scrap products from the US have declined every year since 2014, bad news for ports and shipping lines that depend upon recyclables as reliable backhaul commodities.
Carriers signal blank sailing restraint
29 May 2019
The Ocean Alliance’s announcement of three blank sailings in June puts carriers and BCOs on alert that additional cancellations are likely if shipments from China continue to drop in the coming months.
28 May 2019
Economists and shipping industry leaders warn the US-China trade war could be a potential tipping point for a global economy that was already cooling before President Donald Trump raised tariffs on $200 billion in Chinese goods.
Trans-Pacific carriers begin blanking sailings
22 May 2019
The Ocean Alliance will skip two Asia-US West Coast sailings in June in an effort to maintain rates as the US-China trade war takes a toll on volume.
21 May 2019
Container carriers have been altering stowage plans for neo-Panamax ships to mitigate the current draft limits, according to the Panama Canal Authority.
21 May 2019
The automotive trade is waiting with bated breath for any tariffs coming out of the US Commerce Department’s investigation into the potential national security implications of imports of vehicles and parts.
16 May 2019
Complacent markets that were sure cooler heads would prevail in trade discussions between the US and China have been rocked by a rapid-fire escalation in tariffs.
15 May 2019
Before May 5, when President Donald Trump announced that tariffs on $200 billion of Chinese imports would rise from 10 percent to 25 percent, carriers were relatively sanguine about 2019 and for good reasons.
15 May 2019
Prince Rupert master plan released this week cites key projects that will come online by mid- to late 2020s and assure Canada's Pacific Coast gateways of Prince Rupert and Vancouver can accommodate growth in trans-Pacific cargo into the 2030s.

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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