Main Export-Oriented Regions and Shipping Routes Servicing North America
Servicing the North American market from the main Asian export-oriented economies can be done through the Eastbound and Westbound routes. The line of cost indifference between the Eastbound and Westbound routes is usually Singapore. The Panama route servicing the East Coast and the Gulf of Mexico is an extension of the Eastbound route competing with the North American landbridge.
Comparative advantages are constantly shifting. While East Asia has been a driver for global economic growth for decades (e.g. Japan, South Korea, Taiwan and Hong Kong), it is the Chinese economy that has the most deeply impacted the global structure of production since the 1990s. For several manufacturing sectors the exploitation of comparative advantages within the North American Free Trade Agreement (NAFTA) was essentially by-passed by the "China effect". This was accompanied by a surge in transpacific trade and cargo handled by West Coast ports to the point that the US-China trade relation was considered the most fundamental growth driver. For a variety of reasons (particularly rising labor costs), the comparative advantages of China are being eroded, which imply a redistribution of elements of the manufacturing base to other locations, namely Southeast Asia and South Asia. Although the interior provinces of China could represent development opportunities, accessibility and reliability issues in freight distribution make this alternative prone to risks.
A salient example of shifting comparative advantages concerns the apparel industry, which since the late 2000s has relocated several assets in Southeast Asia, notably Vietnam and Indonesia. This implies that the associated containerized cargo flows are much more likely to transship through Singapore, which represents the point of indifference between the transpacific and the westbound Suez Canal route. The growth of the export-oriented manufacturing base in South Asia, as well as endogenous consumption, would also be associated with a growing share of the Suez Canal (westbound) route.