US cries out for badly needed export container capacity

US exporters are complaining about the lack of available containership space to transport their goods and the increased use of slow steaming by carriers on outbound journeys, reports American Shipper.

"Currently and for the foreseeable future, the ability of US exporters to meet the demand of their customers will be constrained by the lack of ocean carrier capacity," said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC).

Mr Friedmann's comments came after about 35 AgTC members met earlier this month in San Francisco with the 10 member carriers of the Westbound Transpacific Stabilisation Agreement (WTSA) whose ships transport sea freight from the United States to Asia.

"The focus of the meeting was 'how do we get additional capacity in the trade to support US exports,' which are currently stymied by the lack of capacity," he said.

It's a sentiment echoed by Hayden Swofford, executive director of the Pacific Northwest Asia Shippers Association, reported American Shipper. "We are facing a crisis point of equipment availability and space issues, and they are distinctly coupled," he said.

Mr Swofford, who represents members from the forest product industry, said the problem has been caused by carriers reducing capacity in response to falling demand for world trade in the wake of the financial economic crisis that crippled global markets from the fourth quarter of 2008.

"I'm in the (US) northwest and right at this point about 46 per cent of the available tonnage compared to this point last year is gone," he said.

Peter Gatti, executive vice president of the National Industrial Transportation League, said the depreciation of the US dollar has made the nation's exports more attractive. However, US "shippers are having cargo rolled from one week to another, and in some cases are having to turn down sales because they may not be able to get cargo on a ship for two months," the report said.

On the other hand, Mr Friedmann was cited as saying that if a shipper can get its cargo to the ports of Los Angeles, Long Beach or New York, it will be able to find capacity on ships for export cargo. The problem is that the extra cost of transporting cargo to such ports wipes out the profit margin for some agricultural products and makes overseas sales impossible, he said.

"During the five-hour meeting, the AgTC found carrier projections for export sales were way off base and we are going to provide the carriers with better export volume data. They are not going to put ships in the trade if they think cargo volumes are declining. Exports are increasing," Mr Friedmann said.

"For example, WTSA is forecasting a seven per cent decline in US exports, which generated a collective gasp from our AgTC attendees, who believe that true forecast is exactly the opposite - a significant, even possibly double-digit increase in export sales.

"A lot of sales are being left on the table because companies can't make commitments to foreign buyers for delivery of cargo if it is eight weeks out before you can make a booking. So the foreign buyer goes somewhere else."

He added, "Exporters would be willing to pay more if they were able to get a container and get on a ship within two weeks on a ship."

The AgTC plans to next meet with the WTSA for another closed-door dialogue in June.

Source: www.schednet.com