Chart of the WeekMarket InsightNews

East coast containers running at a discount due to overwhelmed west coast ships

SONAR Chart of the Panama Spread (FBX.PANA), the difference rate for shipping a 40-foot container to the North American West Coast vs East Coast.


Chart of the Week: Panama Spread – (SONAR:FBX.PANA)

Last week the major west coast ports of Los Angeles and Long Beach reported all-time high volume for the month of September. With tariffs on Chinese goods increasing on January 1st from 10% to 25%, supply chain managers across the country have been trying to get as much inventory into their warehouses as possible. Possibly the most interesting price activity resulting from this is the decreasing “Panama Spread” value (FBX.PANA), the cost differential between shipping a 40-foot container from China to the North American West Coast (FBX.CNAW) versus the North American East Coast (FBX.CNAE).

This past week the Panama Spread dropped from $1,126 to $856, a 24% drop. Rates to the west coast are increasing while the rates to the east coast are decreasing. With the Savannah and Charleston ports reporting 9% and 10% increases in YOY volume respectively, one might wonder why this is happening.

Many of the maritime carriers reduced capacity on transpacific lanes in August and early September in preparation for reduced volume resulting from tariff concerns. The tariffs have effectively split peak maritime shipping season in two. The result has been limited capacity going to the western ports this fall. Whether or not this was planned to be a way to increase rates and take advantage of the geopolitical situation is unclear.

The good news for the importers is that the maritime carriers are offering discounts to the east coast where capacity is more available. This is why we see rates declining in those lanes on the spot market.

Importers need a lot more time to adjust their supply chain dynamics than the maritime carriers need to alter their capacity on the water. Carriers may have anticipated a more rapid change in behavior than has occurred. In the near-term importers have been bringing in as much freight as possible while they try to figure out the long-term impact of increasing tariffs.

About Indices presented in this article

(SONAR: FBX.PANA) Panama Spread. The Panama Spread is the difference in the spot price for 40-foot containers shipping from China to the North American West Coast (FBX.CNAW) versus the North American East Coast (FBX.CNAE) offered weekly. As the rates for the two lanes converge the FBX.PANA goes down. Conversely as the rates diverge the FBX.PANA increases. i.e. if the FBX.CNAW is $1,200 and the FBX.CNAE is $2,200 the FBX.PANA is $1,000.

About Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real-time. Each week the Sultan of SONAR will post a chart, along with commentary live on the front-page. After that, the Chart of the Week will be archived on for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry- in real time.

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Zach Strickland, FW Market Expert & Market Analyst

Zach Strickland, the “Sultan of SONAR,” curates the weekly market update. Zach is also a one of FreightWaves’ Market Experts. With a degree in Finance, Strickland spent the early part of his career in banking before transitioning to transportation in various roles and segments, such as truckload and LTL. He has over 13 years of transportation experience, specializing in data, pricing, and analytics.