Shipping Containers for Ag in Short Supply

A surge in Asian imports bound for U.S. retailers preparing for Christmas is causing an acute shortage of shipping capacity for U.S. exporters, with agricultural producers struggling to find containers.

The high demand in the U.S. for imports has pushed container freight rates from China to the U.S. West Coast seaports beyond $4,000 per container. Meanwhile, the average price to ship goods by container from Los Angeles to Shanghai in recent weeks was $518.

For carriers, that means it makes more financial sense to hustle boxes back to Asia rather than wait for them to travel inland for several weeks to reach exporters and then return to the coastal gateways.

“Right now we are grappling with a true emergency—carriers refusing bookings for trans-Pacific agricultural exports and canceling those already booked,” said Peter Friedmann, executive director at the Agriculture Transportation Coalition, a trade body representing U.S. farmers. “We are getting locked out of foreign markets.”

The shortage is in part the result of the steep imbalance in the value of the goods moving across the Pacific. U.S. imports from China, for instance, include big volumes of electronics, apparel, toys and other manufactured goods. U.S. exports lean heavily toward bulky agricultural goods, along with food and beverages, which have a lower market value.

Container shortages aren’t uncommon during the busy summer months, but it is more intense this year and has spread to ports around the world as demand swung sharply from record lows to record highs within a few months.

A report from the National Retail Federation and Hackett Associates said major U.S. ports imported 2.11 million containers in September, 12.5 percent more than the year before and the highest monthly total in records going back to 2002.

With retailers continuing to bring in goods in record numbers, industry executives expect the imbalance and the shortage in outbound equipment to continue through the holidays.

Source: Wall Street Journal