Numbers don’t add up on the record-breaking transpacific

Sea-Intelligence, a leading container shipping analyst, is warning the record rates seen on the transpacific are unlikely to last much longer.

Rates from Asia to the US west and east coast have been in record territory for the last three months with carriers injecting significant capacity onto both tradelanes. However, the US is in recession.

“We do have an uneasy sense that the current cargo bonanza cannot be sustained,” the Danish consultancy warned in its latest weekly report, saying the numbers do not add up.

“It does not add up to a sustainable supply/demand equation to see 20+% growth rates in demand in a time of marked recession,” Sea-Intelligence pointed out.

The capacity growth now seen in the transpacific trade is much higher than anything seen since Sea-Intelligence started detailed measurements in 2012.

At the same time, all economists are pegging the US economy as being in a recession. As an example, the IMF’s latest outlook anticipates the US GDP to contract -4.3% in 2020.

“It is difficult to see a model whereby this is sustainable in the longer term,” Sea-Intelligence concluded in its editorial on the transpacific.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.


  1. The US is replenishing inventories and there is a seasonal rush of cargo movements. This explains the surge in demand and linked to the reduction in liner capacity during nthe earlier part of the year explains the rise in freight rates. The owners have played a canny game and making money whilst they can. They are not some sort of benign entities but commercially driven. As and when the US and European economies grow again more sailings will no doubt be introduced and rates will ease.

  2. Another insightful remark – the Chinese are the only developed economy in expansion growth at present and they are pumping the seasonal demand from the US because America ran out of consumables, toys, etc. prior to the ‘holiday season’.
    This is a typical Boom-Bust cycle which will be disrupted in the New Year and, depending on the result of the US elections and how Covid develops in Europe, could result in a lot of woes for liner companies in Q1/21.

  3. [6:19 AM] Jeff Geygan
    Interesting – the US is not in a recession; Q3 being reported this Thur is expected to be ~+30%. Granted for the full year est US GDP is -4%, but the recession is over. We see many instances of increased demand for inventory replenishment by US manufacturing companies.

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