Thread: Container crunch upends global food trade while ships queue at U.S. ports

Food is piling up in all the wrong places, thanks to carriers hauling empty shipping containers.


Global competition for the ribbed steel containers means that Thailand can’t ship its rice, Canada is stuck with peas and India can’t offload its mountain of sugar. Shipping empty boxes back to China has become so profitable that even some American soybean shippers are having to fight for containers to supply hungry Asian buyers. Strikes in Argentina have also boosted Asian demand for U.S. agriculture products, adding to competition for boxes.


“People aren’t getting their goods where they need them,” said Steve Kranig, director of logistics at IM-EX Global Inc., a freight forwarder that handles cargoes including rice, bananas and dumplings from Asia to the U.S. “One of my customers ships 8 to 10 containers of rice every week from Thailand to Los Angeles. But he can only ship 2 to 3 containers a week right now.”


China has recovered faster from COVID-19, so has revved up its export economy and is paying huge premiums for containers — making it far more profitable to send them back empty than to refill them.


There are also signs the soaring freight rates are boosting the cost of some foods. White sugar prices surged to a three-year high last month, and delays in food-grade soybean shipments from the U.S. could mean higher tofu and soy milk costs for consumers in Asia, said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance.


While it’s not entirely uncommon for containers to transit back empty after a voyage, carriers usually try to backfill them to profit from shipping rates in both directions. But the cost of carrying goods from China to the U.S. is almost 10 times higher than the opposite journey, prompting liners to favor empty boxes instead of loading them, Freightos data showed.



‘Shortage of everything’


At the port of Los Angeles, the U.S.’s biggest for container cargo, three in every four boxes going back to Asia are traveling empty compared with the normal 50% rate, said Executive Director Gene Seroka. In Vancouver, terminals have shortened the time to transport the stuffed boxes onto ships from three days to as little as seven hours, said Jordan Atkins, vice president of WTC Group.


“It’s not possible to get the amount of volume we have here in Vancouver to return containers in those tight windows,” said Atkins. “Pulses in general are struggling getting on the ships,” he said, referring to crops like peas and lentils. Canada is the world’s second-largest producer of pulses.

India, the world’s second-largest sugar producer, exported only 70,000 metric tons in January, less than a fifth of the volume shipped a year earlier, said Ravi Gupta, president of Shree Renuka Sugars Ltd., the nation’s top refiner.


Vietnam, the largest producer of the robusta coffee beans used to make instant drinks and espresso, is also struggling to export. Shipments dropped more than 20% in November and December, said Le Tien Hung, chairman of Simexco Dak Lak, Vietnam’s No. 2 exporter.


Around the world, some foodstuff buyers are waiting while others have halted purchases altogether, traders say. “It’s been like that since December,” said Kranig of IM-EX Global. “You’re going to get not only a shortage of food but a shortage of everything. I would not be surprised to hear some beneficial cargo owners’ freight rates for 2021-2022 shipping season double from previous years.”


If that prediction bears out, once the bulk of North Americans and Europeans are vaccinated, some of those high freight rates could be passed on to them as they return to cafes, restaurants and office towers.


The container crunch comes just as American shippers are trying to boost exports of everything from soybeans to grain meals to Asia. China is scooping up American crops to feed a hog herd that’s recovering from a deadly pig disease faster than most expected. The situation is so dire that some buyers are canceling contracts, opting for bulk shipping methods, the most common for feed products, or delaying purchases to avoid high freight costs.


“We know that some of the industry’s largest and most consistent buyers of soybean containers in Asia over the years are now electing to buy bulk vessel supplies,” said Doug Grennan, vice president for select global grain and oilseeds at Scoular Co., a century-old trader that’s one of the U.S.’s largest shippers of agricultural goods in containers. “And certainly like others, we had some booking cancellations.”

Hapag-Lloyd AG last year told customers it was suspending overseas container shipments of North American agriculture products to reposition empty containers back to Asia. Nico Hecker, director of global container logistics at the German sea-freight company, said in November that the firm was experiencing the strongest increase in demand for 40-foot (12-meter) containers following one of the biggest decreases ever.


“As containers became scarce in Asia, demand outpaced supply” along all container routes, said Judah Levine, research lead at Freightos. Some carriers have canceled sailings in coming weeks to catch up from delays, he added.



Pressure on prices


The pandemic has also upended flows of refrigerated containers. In China, boxes are piling up at ports as workers have to comply with strict COVID-19 testing procedures as well as disinfection of meat and seafood products after frozen-food imports were blamed for the spread of the virus. There are so many cold containers in Dalian that the port is running out of power plugs to keep them on.


As imports are being held up, wholesale pork prices in China, the world’s top consumer, jumped to the highest since September. That’s prompted the government to boost sales of state pork reserves to meet booming demand ahead of the Lunar New Year holiday in mid-February.


Still, some see a major global spike in food costs as unlikely. Only a small percentage of grains and oilseeds is traded in containers, said Arnaud Petit, executive director of the International Grains Council in London, with the rest going bulk cargo. It’s also unclear how much of the rise in shipping costs companies will be able to pass on to consumers, given the economic slowdown caused by the coronavirus.

“It’s a bit of a perfect storm,” said Grennan. ”You have pent up demand in Asia for agriculture products and that’s at the same time you have a pretty substantial consumer goods demand in the U.S.” Around Los Angeles and Long Beach, congestion among laden ships arriving at ports has hit unprecedented levels, worsening a bottleneck at the busiest gateway for U.S. imports.


A record 38 container ships were awaiting berth space according to a note by the Marine Exchange of Southern California last Thursday — 36 at anchor, and two more that were directed to wait in designated areas at sea until anchorages were available.


Those floating off Los Angeles have capacity to be carrying almost 300,000 containers measured by 20-foot equivalent units, according to the marine exchange’s list. L.A. was expecting to handle 155,000 inbound containers this week, 80% more than a year ago, and Long Beach estimated taking in just under 100,000.



Major retailers face disruption


For the queued ships, the wait appears to range from several days to nearly two weeks. The ship that’s first in line to move into berth arrived on Jan. 16, according to the marine exchange’s latest records. The authority is using so-called drift zones for the first time since 2004 to manage traffic into the neighboring ports.


The crunch has developed as American companies try to restock warehouses and consumers, lacking travel and other entertainment options during the pandemic, buy more products for their homes.


As issues on land worsened by the spread of the novel coronavirus — like sick longshoremen, social distancing restrictions for those working and shortages of equipment and truckers — slow operations at ports, they hinder not only container turnaround but also difficulties with moving newly arrived containers.


Companies including Sweden’s Ikea have alerted customers to potential disruptions from global transport delays. Michigan-based appliance-maker Whirlpool Corp. is paying more for faster options like air cargo to get its components and products on time. Other firms are dealing with suppliers that are behind schedule.


“The port situation quite frankly is actually getting worse by the day, not better,” Michael Speetzen, interim CEO of Minnesota-based off-road carmaker Polaris Inc., said according to a transcript of a conference call last week. “So we know that we’re going to be fighting that.”


“This is a problem which does not have a short-term fix,” said Lars Jensen, chief executive officer of SeaIntelligence Consulting in Copenhagen.

Just how long the gridlock lasts hinges on whether the carriers maintain scheduled sailings to the U.S. or cancel some trips in coming weeks. The best-case scenario to relieve the pressure: a seasonal decline in shipments from Asia after Lunar New Year. “This will dampen the inwards flow of goods by the end of February and give some breathing room to clear the backlog — but that clearing will still take some time,” Jensen said.


Southern California’s main port complex has managed such situations before, most recently an episode caused by a labor dispute in 2015. The port infrastructure also threatened to be overwhelmed in 2004 when — three years after China joined the World Trade Organization — dozens of ships laden with Chinese goods also proved a challenge.


The main difference now is cargo ships that are even bigger and take longer to unload, and the host of workplace challenges on the waterfront presented by COVID-19. Inclement weather can also compound the handling of vessels trying to unload. Last week strong winds and 17-foot (5.2-meter) swells prompted several to hoist anchor and seek safety away from shore.


Container crunch upends global food trade while ships queue at U.S. ports | The Japan Times

Jurin eases restrictions on big ships to tackle container shortage



Commerce Minister Jurin Laksanawisit has resolved to tackle the global shortage of cargo containers by easing restrictions at Laem Chabang Port in Chon Buri.


Jurin, who doubles as deputy PM, said the ministry and the Port of Authority of Thailand had agreed to requests from shipping companies to allow large cargo vessels of 18,000 TUE (400 metres-plus) to dock at the port without asking permission.

Meanwhile export permits for shippers will take just one day to process and be valid for two years.The new measures will enable large vessels to transport Thai exports directly to target countries without transferring via Singapore or any other port, which will help reduce costs, Jurin said.

Also, products that do not need to be shipped in containers – such as fruit, coconuts, rubberwood and other agricultural produce – will be redirected to ordinary ships to save container space for exports.

The measures will be implemented from the third week of February.

Jurin eases restrictions on big ships to tackle container shortage

Originally Posted by OhOh

Is it the capatalist ameristani shippers

No, it's the fucking Chinese leadership that unlashed the virus on the world by not reporting facts and the spread and silencing those who wanted and tried to, you fuckwit. If China had been more transparent instead of trying to cover everything up an then blaming India, Italy, Australia, NZ etc . . . what a steaming pile of shit you hail from, now wonder you stink

Originally Posted by misskit

had agreed to requests from shipping companies to allow large cargo vessels of 18,000 TUE (400 metres-plus) to dock at the port without asking permission.

m

Thate going to work well when they have congestion.

Originally Posted by misskit

The new measures will enable large vessels to transport Thai exports directly to target countries without transferring via Singapore or any other port, which will help reduce costs, Jurin said.

Do they have the equipment? The knowledge and know how? Shipping lanes suitable?

This chump seems to he’s discovered how to compete with Hong Kong and Singapore

^Our expert on everything knows it all... (Do we need China?)

US port delays force ‘structural’ blank sailings on Asian services

With Hapag-Lloyd — and by extension its partners in THE Alliance — advising customers of 21 de facto canceled sailings in February in the eastbound trans-Pacific due to schedule disruptions, importers should anticipate even tighter capacity in the coming months.

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Ostergaard said Hapag-Lloyd’s changes to its service schedule are necessitated by vessel bunching at congested ports due to near-record cargo volumes in the Asia-North America trade. Import volumes exploded when the North American economy began to recover last summer following the lifting of initial COVID-19 lockdowns. Eastbound liner reliability from Asia to both US coasts was under 30 percent for both coasts in December, according to Sea-Intelligence Maritime Analysis.

The worst congestion in the US has been at the ports of Los Angeles and Long Beach, with numerous container ships delayed a week or longer, according to the Marine Exchange of Southern California. Ostergaard also cited Oakland and Vancouver as being West Coast gateways that have experienced late vessel arrivals and congestion.

With reports from Asia indicating some factories are planning to remain open through the Lunar New Year, US import volumes may not drop significantly as they normally do during the holidays, so vessel space at Asian load ports is likely to remain tight for some time, Sur said.

De Well Container Shipping (Thailand) Co., Ltd.

Originally Posted by panama hat

So . . . after China unilaterally changes trade agreements, blocks ships from docking on schedule etc

Why the Chinese block the ships in...

the ports of Los Angeles and Long Beach, with numerous container ships delayed a week or longer, according to the Marine Exchange of Southern California. Ostergaard also cited Oakland and Vancouver

And their English is also not good... and of some on TD either...

A rush to get containers back to Asia...

Seems that the Chinese do not buy much soya beans.

Also the wheat is now more available in Russia, the export increased a lot - beside being just the "Gas station" only.

So, what to load into the arrived containers? To send them back just empty?

Commerce Ministry Tackles Global Shortage of Cargo Containers


BANGKOK (NNT) - The Commerce Ministry is tackling the container shortage and opens more border checkpoints to increase trade, aiming to reach the ministry’s goal of export growth of 4% this year.


Minister Jurin Laksanawisit said the Port Authority of Thailand (PAT) has agreed to reduce the port fee for exporters, and also to permit and facilitate ships measuring 400 metres to enter Laem Chabang deep-sea port to import more empty containers.


He said the ministry also aims to promote and stimulate exports to China via land transport, and will speed up negotiations with Laos, Vietnam and China to facilitate land transport through the borders.

National News Bureau Of Thailand