Johannes Eisele / AFP via Getty Images
Bob Sinner, a specialty soybean farmer in North Dakota, has a major problem on his hands: he has a lot of beans, but he’s struggling to ship them to his overseas customers, and his deliveries are late. at least a month and a half. .
“We have had customers in Asia who have had to shut down their operations while awaiting supply,” Sinner said. “Our farmers have to empty their storage facilities because we have a new crop coming in September, October. We have to move this product forward.”
The same freight bottlenecks that have frustrated US importers are plaguing exporters as well.
Shippers are delivering record volumes of back-to-school supplies and fall clothing from Asia to the West Coast. Typically, these containers go to North Dakota or other points in the center of the country to be filled with US exports.
But today, instead of transporting soybeans and other American products across the Pacific as usual, many containers are leaving empty. as shippers rush to import even more imports.
It thrills Sinner and other exporters across the country.
“Trade continues to be one-sided,” said Gene Seroka, executive director of the Port of Los Angeles, the country’s busiest cargo port. “We process a lot of imports, not enough exports, and there are too many voids in return.”
Why the freight economy does not favor farmers and exporters
Typically, about two-thirds of the containers leaving US ports are full of exports. Today, more than three-quarters of the containers leaving Los Angeles are empty.
And while the port handled record import volumes this year, exports in June were the lowest since 2005.
The economy right now is stacked against Sinner and other exporters.
Thanks to the growing demand in this country, freighters can charge more than seven times as much to bring a container from Asia to the United States than for the return trip. According to S&P Global Platts, this price difference has widened sharply since the pandemic.
As a result, it is often more lucrative for shipping companies to return to Asia with empty containers for quick filling, rather than waiting for those containers to be loaded with US exports.
Traffic jams at US train stations and road terminals have also dramatically increased the time it takes to move goods between the center of the country and the coasts, further compounding the disadvantage for exporters.
“That’s the challenge,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition. “The ocean carriers don’t want to spend their time picking up our export cargo.”
Agricultural exports are generally worth less than what importers import. This means that exporters are akin to budget travelers trying to compete with first class passengers for the attention of an airline.
“We are not a high dollar value commodity,” said Alexis Jacobson, who manages exports for an Oregon company that sells straw to customers in Japan and South Korea. “We must ship to the lowest freight, otherwise we cannot ship.”
Shippers say relief is around the corner, but it’s still bad
Farmers and other exporters have complained to the Federal Maritime Commission and members of Congress. But shipping companies insist that neither regulation nor legislation is the answer.
“The much-appreciated economic recovery is translating into record import volumes and putting pressure not only on ocean carriers, but on every link in the complex global and North American supply chain,” John told lawmakers. Butler, President of the World Shipping Council. month.
Carriers argue that two-way bottlenecks will ease once consumer demand in the United States returns to more normal levels.
But in North Dakota, Sinner is growing impatient. For months now, shipping experts have assured him relief is just around the corner, to be disappointed.
“Now they say it could be better by the end of the year. Who the hell knows? Said the sinner. “And let’s be honest. We’re not the only store in town. Our customers have a choice. And if we can’t deliver efficiently and reliably, they’ll look for other sources for their products.”