North American Containerized Trade with Asia, 1995-2020

North American Containerized Trade with Asia, 1995-2020

Source: UNCTAD, Review of Maritime Transport, various years.

North American trade (particularly the United States) with several countries of the Pacific is systematically imbalanced, notably with China, Japan, and South Korea. These imbalances emerged during the 1990s. From an import/export ratio of close to 1 in 1995, this ratio surged to 2.8 in 2006 (2.8 times more loaded containers traded between Asia in the United States than between the United States and Asia). This trend has important implications for the movements of containers as well as for transport costs. The Asian financial crisis of 1997 was a factor contributing to the growth of transpacific container imbalances, mostly due to the debasement of several Asian currencies. China also maintained through that period a fixed exchange rate with the US dollar as part of its export-oriented strategy.

Due to economies of scale in maritime shipping, the costs of moving a container from East Asia to the United States dropped by a factor of 50% during the 1990s. However, trade imbalances force Asian exporters to pay on average 50% more in container shipping costs than their American counterparts. However, economic and political events can impact imbalances, particularly after the financial crisis of 2008-2009. While the import/export ratio reached 2.7 in 2006, it corrected sharply down to reach 1.7 in 2009. Afterward, the ratio gradually recovered to values above 2.5. The Covid-19 pandemic resulted in a surge of imports from China, pushing the import/export ratio to historical heights (2.9). It remains to be seen what impact future political, economic, and technological changes will have on the balance of containerized trade.