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

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.

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.