the film
forum
library
tutorial
contact
Economic and dam related articles

Container Shortage Crimps Exports

by Dave Wilkins
Capital Press, May 16, 2008

Boom curtails availability of ocean-going containers

U.S. farmers and ranchers are facing a problem they could only dream about a few years ago.

There isn't enough shipping capacity to export all the American grain, hay, beef and other ag commodities that the world wants.

Exports of U.S. farm products topped $10 billion in February and are on track to easily exceed last year's record shipments of $81.9 billion.

The big export boom has contributed to a shortage of ocean-going containers - the big metal boxes that goods are shipped in.

At the Port of Lewiston in Idaho, the container shortage peaked sometime between November and January, manager Dave Doeringsfeld said.

"We easily could have shipped an additional 30 percent in volume during those months if we'd had access to enough equipment," Doeringsfeld said this week.

Goods shipped from the Lewiston port are moved by barge down the Columbia-Snake River system to Portland where they're loaded onto ships for export.

About 780,000 tons of bulk wheat and barley were shipped from the Lewiston port last year.

An increasing amount of wheat and nearly all of the dry peas, lentils and chickpeas handled at the Idaho port are shipped in containers.

The container shortage has eased a bit since January, but there are still issues related to ship capacity in Portland, Doeringsfeld said.

"There is limited vessel space," he said. "That is more of an issue right now as far as we're concerned than getting the (containers) up here."

Shippers often get farm goods to port only to find out that the containers they thought were available aren't.

That can trigger extra costs for storage and rehandling, said Tim Gustavson, a trader at North Pacific Group Inc., a Portland-based shipper and one of the world's largest distributors of agricultural and forest products.

"There are often unforeseen costs because containers aren't available as we need them," Gustavson said.

"Cargoes are shipping, but things are a lot slower," he said. "It's tremendously more difficult."

The problem has affected all North American ports and agricultural commodities ranging from frozen french fries to compressed hay cubes, said Peter Friedmann, general counsel for the Agricultural Transportation Coalition, a Washington, D.C.-based trade organization.

The declining value of the U.S. dollar has made U.S. ag exports more affordable around the globe, Friedmann said.

Exports are up and imports are down, resulting in fewer containers being offloaded at U.S. ports.

Major ocean carriers, meanwhile, have moved more capacity from the U.S. as U.S. imports have declined.

Jay O'Neill, an agricultural economist at Kansas State University, said container traffic from Asia to the U.S. is down 12 to 14 percent compared with last year.

"Now what we have is everyone hustling trying to find and compete for empty containers, and the rates have been going up," said O'Neill, a consultant to the U.S. Grains Council.

The cost to ship a container from the United States to Asia is now about $1,650 - a jump of about 20 percent in one year, he said.

The availability of containers in the Midwest has been further reduced because more containers are being unloaded on the West Coast rather than being sent to Chicago or Kansas City.

"Container companies, due to increased domestic rates, have been unloading a greater number of containers on the West Coast and not in the interior United States," O'Neill said.

Getting containers moved to where they're needed can trigger repositioning charges.

"That's another surcharge we're facing," said Matt Harris, director of trade for the Washington State Potato Commission.

The situation has the potato industry concerned, he said.

"These ships are at full capacity," Harris said. "We could export more, but there isn't the availability."

It wasn't that long ago that containers filled with goods from Asia were sent back empty because there were so many of them and because the strong U.S. dollar was a drag on exports.

But no more.

"We're not sending back empty containers," said Josh Thomas, a spokesman for the Port of Portland. "We have commodities to fill them."

The number of containers leaving Portland was up 13.2 percent during the first three months of this year compared with the same period last year, Thomas said.

The number of containers arriving at the port was up 12 percent.

"A lot of ports have seen increases in exports, with a decrease in imports, but we've seen increases in both," Thomas said.


Dave Wilkins writer Dave Wilkins is based in Twin Falls, Idaho.
Container Shortage Crimps Exports
Capital Press, May 16, 2008

See what you can learn

learn more on topics covered in the film
see the video
read the script
learn the songs
discussion forum
salmon animation