Ag shippers feel pain from lack of ocean containers
A perfect storm of container unavailability, labor shortages and lack of chassis and warehouse space is wreaking havoc for U.S. agricultural shippers this fall, according to panelists participating in the Agriculture Transportation Coalition’s (AgTC) virtual meeting Tuesday.
“This is one of the most difficult seasons we’ve been facing trying to move our cargo out of the United States,” said Maria Zermeno, logistics manager for Hughson Nut, a coalition member.
Zermeno said her bookings with ocean carrier Yang Ming were getting canceled earlier this fall initially because of a lack of space on Asia-bound vessels. But then her November and December bookings were getting canceled because Yang Ming was seeking to return empty containers quickly to Asia so that they could be turned around to send goods back to the U.S.
Zermeno’s concern is that if she can’t fulfill her customers’ needs for almonds, then her buyers will turn to competing producers in places such as Australia and Chile.
“To me, the carriers are sending us a clear image that they’re not interested in our cargo,” Zermano said.
Indeed, other coalition members told of similar experiences with the lack of container availability, which is occurring because the profit to send and reposition empty containers in Asia is far greater than waiting several days to fill up containers in the U.S. interior with export-bound goods.
Although U.S. Shippers Association Executive Director Beverly Altimore represents producers of agricultural chemicals and resins, her association is experiencing similar problems as other AgTC coalition members, such as “outrageous demurrage and detention” fees from carriers.
As a result of the carriers’ refusals to book exports for four months, her members’ livelihoods are at stake, Altimore said. Members with the U.S. Shippers Association include producers of fertilizers and food additives.
“Carriers forget that this is not just containers and cargo going on their ships,” Altimore said.
Altimore’s members are also seeing other costs. For instance, her members use railcars to store exports as they wait to be loaded onto a vessel. But those railcars are sitting under demurrage because the commodities that the railcars are holding can’t be emptied onto a export-bound container.
Altimore urged the federal government to intervene and put controls on carriers. “We’re allowing overseas businesses to control our economy,” she said.
Indeed, the Federal Maritime Commission decided last month to allow Commissioner Rebecca Dye to investigate the carriers’ practices. Dye, who was a panelist during Tuesday’s meeting, will be meeting with the CEOs of the major ocean shipping lines. She encouraged meeting attendees to share their experiences with the FMC.
While container availability has been one concern among agricultural shippers, other factors come into play, according to Franck DeDenis, senior vice president of Maersk. DeDenis is Maersk’s global head of ocean products in North America.
Volatility and unpredictability “are the new norms,” DeDenis said, noting that the North American export network remains tight even though Maersk has added 50% more capacity since July and leased “tens of thousands” of pieces of extra equipment as social distancing restrictions lifted following the pandemic-related lockdowns last spring.
The labor shortage at the ports has exacerbated the market tightness, as has the lack of space in the warehouses and the lack of chassis, DeDenis said.
Other panelists also commented on the labor shortage, saying that even though port terminals typically do well handling larger vessels, there are caps or limits on how much skilled labor a terminal can order, according to Harbor Trucking Association CEO Weston LaBar, who said that lack of labor also lengthens dwell time as a result.
Meanwhile, social distancing restrictions limit the number of workers at a warehouse, he said.
The appointment system to secure an empty container at the port is “a bit of trial and error,” plus congestion at the terminal affects the ability of exporters to get a productive truck labor force, LaBar said. His group has been trying to work with other stakeholders to gain more visibility on where to position assets.
However, the labor shortage turned out to be “a blessing in disguise” for SSA Containers President and terminal operator Ed DeNike because his terminals didn’t have the space to accommodate the empty containers that the ocean carriers want.
SSA, also known as Stevedore Services of America, has had to turn away ships because of its inability to load empty containers, DeNike said.
“The terminal operator really wants to do the job, but with these issues it’s very difficult,” DeNike said.
Our source: https://www.freightwaves.com/news/ag-shippers-feel-pain-from-lack-of-ocean-containers