Rapid Arctic warming accelerates the erosion of permafrost coasts rich in terrestrial organic carbon (terrOC). Once released into the ocean, terrOC can degrade or get buried in shelf sediments, yet its transport pathways and fate remain poorly understood. We collected permafrost material, sediment and surface water along the Canadian Beaufort Sea coast, fractionating samples by density (cut-off 1.8 g/cm3) and size (38, 63 and 200 µm) before performing geochemical and microscopic analysis. Our results show that ~43% of terrOC is trapped in low-density fractions, mainly as vascular plant debris. Surprisingly, this material is trapped within shallow (0-5 m) waters where waterlogging and large particle size increase its density and settling velocity. Less than 10% is transported to deeper waters (30-55 m), indicating that the shallow coastal zone acts as a trap and biogeochemical reactor. These findings challenge the source-to-sink paradigm and highlight the overlooked and undersampled (< 6% of pan-arctic shelf data) nearshore zone.