This extremely interesting article details what’s happening at the Panama Canal in terms of ocean shipping trade. I learned a lot from it.
For instance, containers are a small part of the trade through the Canals, both the Panamax and NeoPanamax (deepwater, for the larger ships) routes. The largest part is bulk, grains, coal and oil and LNG.
And the majority of the trade in 2020 is Pacific to Atlantic, not Atlantic to Pacific.
Since there’s a lot of export of these commodities, particularly agricultural and oil-based, from the Gulf Coast of the US to Asia, Canal traffic is a good measure of US international trade of these.
Altogether a good read.
Greg Miller, Senior Editor Thursday, October 15, 2020
Transpacific trade won’t recover for at least a couple of years, says an article in the Loadstar.
Most of the tariffs remain in place. And much trade has shifted from China to other Southeast Asia countries, like Vietnam, rather than returning to China. US container imports from China are off by more than 8% compared with last year. Vietnam was up 33%, to 1.4m teu; Thailand was up 18%, to 570k teu, and Malaysia was up 27%, to 335k teu. But total trade from the region is down.
And US consumers have already overpaid by $38 billion for goods from February of 2018 to September of 2019. That is the typical story in trade wars; the consumer pays for the war through increased prices for purchases. It’s a premise of trade economics; when trade is restricted, the consumer must buy at higher prices because they can’t get them from the lower-cost location.
And it’s not clear at all that the trade deal between the US and China will change that trend away from China, and down in general. Of course, we don’t know what is really in the deal yet, or which things will actually happen. And we know there’s been little advance on the intellectual property front, and the US has ceded the opportunity to gain support for dumping claims through the WTO.
This story is a follow up to one I did a couple of weeks ago. Fuel surcharges are varying wildly. A consultant found that there’s a wide disparity, the rate rationale is not very transparent, and rates vary even within alliances. Conditions like this lead to confusion and annoyance among customers, especially smaller shippers. I expect 3PLs will also be annoyed, but they will be figuring out how to explain the surcharges or where to hide them in their reselling agreements. It doesn’t make for great credibility among the ocean carriers.