containers: ‘Containergeddon’ brings sugar and rice shippers back to bulk carriers

NEW YORK: Food traders are moving from containers to dry bulk carriers to transport refined sugar and rice, hoping to avoid shipping delays caused by container shortages and port congestion the industry calls ” containergeddon, “according to traders.

Container transport has been hit by exorbitant costs and delays amid booming transport demand, while container terminals in ports struggle to manage the flow.

Products such as refined sugar, coffee, rice, cotton, and cocoa have moved from dry bulk ships to containers in the past because large boxes were more convenient and provided good quality control. But now shippers are pulling back, at least temporarily.

“About 80% of the refined sugar trade was done using containers before the pandemic. This figure has now dropped to around 60%,” said Paulo Roberto de Souza, general manager of Alvean Sugar SL, the largest sugar trader in the world.

According to Souza, the change is not more significant as there are not many small vessels available on the market.

Data from the Williams shipping agency regarding port movements in Brazil, the world’s largest sugar exporter, show that volumes of refined sugar shipped in containers fell 48% in June and July (latest data available) compared to to the previous year.

Bob Cymbala, owner of Vancouver-based food trader A&J Global USA, said some customers were turning down offers due to high container freight prices, looking instead for shipping alternatives.

One of its customers, a rice exporter in India, is looking to use a dry bulk cargo to ship to West Africa a volume of rice equivalent to 10 full containers.

Coffee exporters are not yet considering moving away from containers, aside from the difficulties, mainly due to quality concerns. They say that the containers, with a suitable liner, better preserve coffee characteristics such as smell and taste.

(The one-stop destination for MSMEs, ET RISE provides news, insights and analysis on GST, exports, finance, politics, and small business management.)

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