Ag shippers say containers, timely capacity top issues

Exports might be booming, but agriculture shippers say finding timely carrier capacity for their now-hot export commodities is far and away their sector's foremost issue.

Ag shippers suffer the frustrating dichotomy that just as the falling U.S. dollar has made their products extremely attractive to overseas markets, fewer cargo ships calling and shortages in available containers are dampening any celebration.

Small- and mid-size agriculture shippers are also facing incredibly long waits, sometimes months, just to receive a slot on an outbound vessel. 

The carriers going to realize that the balance of trade has shifted, and exporters are the new revenue drivers for this industry,?said Peter Friedmann, executive director of the Agriculture Transportation Coalition, at the group's annual conference in San Francisco last week. there is a shortage of space in all areas of shipping, including both reefer and dry bulk. This is not a temporary blip in world trade, it is an ongoing and long-term phenomenon. In his conference opening remarks, AgTC Chairman Leon Dermenjian told the several hundred attendees that they could all commiserate as members of a group on a quest to find containers.

Drewry Supply Chain Advisers' Analyst Philip Damas told the audience that his firm's latest research highlights that shippers across the board were caught unaware by the ocean carriers' redeployment of vessel capacity from the transpacific routes to the Asia/Europe routes.

 

Damas said that because imports have driven the West Coast shipping markets for so long, the entire system was built up around the demands and needs of importers, while the needs of exporters were long ignored.

As a consequence, there are a number of mismatches between import delivery locations and outbound depots. And as we all know, that means a substantial reduction in the availability of empty boxes,Damas said.

Solutions all entail shippers providing additional incentives to carriers for repositioning containers, he said. And while not impossible to implement, any solution will be painful and expensive.

Damas also warned that while flat imports and the low dollar have created a golden time for ag exporters, the dollar would recoup some of its losses in the future. Damas predicted that by 2010, imports are likely to begin ramping up and agriculture shippers should prepare.

In the meantime, agriculture shippers are finding themselves more and more frustrated over the lack of capacity.

I have been a forwarder in this business for over 30 years and I have never felt less capable of accomplishing my mission, said Terri Bartle of Pacific northwest forwarder TLR. Our ability today to service our customers and our partners is being affected by foreign-owned carriers that are extracting U.S. capacity to meet their mission.

According to Bartle, who was representing small shippers, the mission of these carriers does not include return on investment, smart or long-term investments for the greater good.

Everyone has their own focus,