The Top 5 Major Trade Lanes in the World

The Top 5 Major Trade Lanes in the World

The export-import trade between countries is bifurcated into groups by the continent/region they belong to. These groups are called trade lanes. For example - the trade between countries in Asia with countries in Africa forms one trade lane. Similarly, trade between European nations with the South American States forms another trade lane. 

These trade lanes not only give a holistic view of the trade relations between the different continents but also simplify the business of shipping. Calculation of freight rates, application of tariffs and surcharges, and availability of space/containers for shipping between two regions depend on how the trade lane is performing. 

While almost every country in the world is involved in some form of global trade, there are some trade lanes that generate more export-import transactions than others. 

The top 5 major trade lanes in the world are: 

Asia - North America: The trade between Asian countries and North American nations is one of the most busiest and important trade lanes, with China and the United States being the prominent players. The transpacific trade lane - the regional container service that connects East Asia to the US (import bound to the US), accounts for approximately 40 percent of the world’s GDP. According to reports, in container shipping, this trade lane witnessed a 30.6 percent capacity increase YOY in July 2021. In recent times this is the largest capacity increase in the main trade lanes. This trade lane is serviced by the Panama Canal. 

Asia - Europe: This trade lane facilitates the export-import between Asian nations and European countries. According to reports, the annual trade between the two regions is valued at USD 1.5 trillion. Among the Asian nations, China accounts for 45% of the trade, Russia is second at 18% and, Japan, South Korea, and India contribute 8, 7, and 5 percent respectively. Generally routed through the Suez Canal, this is one of the most prominent trade lanes in the global supply chain. The Asia - Europe trade lane is reported to have grown by 19.7 percent YOY in July 2021. However, the recent Russia - Ukraine war may adversely impact the trade in these regions.

Intra - Asia: It is the largest trade lane in terms of volume with approximately 33 million TEUs shipped across the trade lane annually. Serviced through the Strait of Malacca, this trade lane covers the movement of goods between Asian countries such as China, Japan, India, Singapore, South Korea, Taiwan, Philippines, and Vietnam. Among the ASEAN nations, Vietnam is currently China’s biggest trading partner in the region. 

Europe - North America: Also known as the Trans-Atlantic, this trade lane covers the export-import transactions between European nations and North American countries. Among the North American countries, the US is the biggest trade partner for the European Union. And the UK is the largest trading partner for the USA in this trade lane. This trade lane saw a capacity increase of 21.4 percent YOY in July 2021. The trade between the two regions is facilitated via the English Channel. 

North America - Canada: The US is Canada’s biggest trading partner. And Canada is the third-largest trading partner of the US, globally. Approximately 63.9 percent of Canada’s total import trade is with the US. Canada imports automobiles, machinery, minerals, fuels, plastics, electronics, and pharmaceuticals from the US. And exports minerals, fuels, vehicles, machinery, wood articles, and various commodities to the US. This trade lane is connected via the St. Lawrence Seaway. 

19 Mar 2024

Keywords
Shipping
Logistics
Freight
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