Containerized Cargo Flows along Major Trade Routes, 1995-2020

Containerized Cargo Flows along Major Trade Routes 1995 2020

Source: UNCTAD, Review of Maritime Transport.

Container flows are quite representative of global trade imbalances, which have steadily been growing since the mid-1990s. For instance, 3 times as many containers are moving from Asia to the United States (20.6 million TEUs in 2020) than vice-versa, meaning that the equivalent of 13.7 million TEUs had to be repositioned across the Pacific. More than half the slots of containerships leaving the United States are for empties, particularly for major container ports such as Los Angeles.

The Asia-Europe trade route is facing a similar imbalance. It is not uncommon to see whole containerships being chartered solely to reposition empty containers. Thus, production and trade imbalances in the global economy are clearly reflected in imbalances in the physical flows of containers and transport rates. Repositioning empties can account for between 15 and 20% of the operating costs of a shipping line.

For trans-Pacific trade, it costs more per TEU for eastbound flows than for westbound flows, making freight planning a complex task for container shipping companies. For Asia-Europe flows, westbound rates are higher than eastbound rates. Thus, production and trade imbalances in the global economy result in imbalances in physical flows and transport rates. Even if eastbound trans-Pacific rates are lower than westbound trans-Pacific rates, in theory conferring an advantage to American exports, cost differences are so in favor of Asia (China) that the American economy does not take much advantage of this benefit.

The issue of imbalanced container flows does not show evidence of receding, although its share of total container flows, at 20%, has stabilized. However, as global container volumes increase, the absolute number of empty containers requiring the be repositioned increases as well. This requires additional physical capabilities in terms of terminal storage space and container shipping slots.