The Shanghai-Los Angeles route is recognized as the most profitable container shipping route in the world. According to new analyses, revenues from transportation on this route are five times higher than similar routes to Northern Europe via Cape Horn.
Increase in Shipping Revenues
Research shows that the extraordinary strength of U.S. trade continues beyond its traditional peak season, and shipping rates have approached levels seen during the pandemic. With an average of $7,500 per container (feu), the 5,775-mile Shanghai-Los Angeles journey generates $1.30 in revenue per container. In comparison, the Shanghai-Rotterdam route generates only 26 cents, and the Shanghai-New York route generates 96 cents per nautical mile.
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Shipping Response to Market Demand
Shipping companies are responding to market demand by increasing their capacity. MSC has recently bolstered its Sentosa service with new 23,600 teu ships, and ZIM, which has allocated 52% of its capacity to the Pacific, will launch a new China-California service in December.
This boom directly impacts company revenues. COSCO reported shipping profits of $2.66 billion in its third-quarter report, double that of last year, and transpacific revenues have increased by 61.2%. Additionally, recent surveys indicate that shipping rates from Asia to the U.S. West Coast have reached $8,340, and to the East Coast, $9,911.
However, signs of a decline are also observed. Drewry reported that rates for Shanghai-Los Angeles fell by 6% last week to $7,514. It is expected that U.S. maritime imports will decrease by 11% in November.
Meanwhile, Sea-Intelligence has warned that transpacific capacity deployment has reached unprecedented levels. Weekly capacity from Asia to the U.S. West Coast is expected to reach 400,000 teu in November, although traffic and delays in ship movements have contributed to these numbers.
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