Made in China has made the transpacific one of the world’s busiest trade lanes. So, when not as much is being made in China, North American West Coast ports should brace for a significant business adjustment.
On the bright side of that prospect, a slowdown in transpacific shipping will help untangle the more severe kinks in a supply chain that has been congested since the latter half of 2020.
According to recent estimates from container shipping expert John McCown, West Coast ports now account for 15 per cent of ships waiting for berth space at North American ports compared with closer to 65 per cent back in January.
However, on the darker side of that prospect, less container cargo traffic from China to West Coast ports could be a sign of increasingly slower times ahead.
China’s entry into the World Trade Organization in late 2001 sparked a massive boom in transpacific trade that has only recently begun to lose momentum. The slowdown is not entirely due to China’s ailing economy or the migration of manufacturing out of China as part of the West’s prudent decision to start moving more eggs out of the politically unsavoury business basket that China has become.
A lot of transpacific traffic that was being diverted to Gulf and East Coast ports to avoid West Coast congestion has continued to use those options even as West Coast congestion has begun to ease.
That repositioning of shipping trade lanes through the widened Panama Canal is not good news for any West Coast port.
Vancouver and Prince Rupert, both of which have been adept at winning container traffic from their U.S. competitors, will have to be even more agile and efficient if they and the rest of Canada’s vital Asia-Pacific Gateway are to remain competitive.
Identifying and removing weak links in the gateway’s supply chain will therefore be critical to the long-term success of any Asia-Pacific trade strategy for Canada.
