US exporters are warned of a shortage of empty containers

Shipping lines are warning US exporters that Chinese factories were paralyzed for the third week in a row and carriers announced more than 80 trains were canceled in February and March, a shortage. Empty containers starting to appear within the United States will increase in the coming weeks.

In addition, freight rates for exports to Asia are starting to increase as space on ships leaving the US port is scarce. According to the World Container Index, shipping rates from Los Angeles to Shanghai have risen to $ 450 per FEU since February 13, from $ 355 per TEU on December 12, 2019.

“One thing that is about to happen is that the number of canceled trains is increasing. That will have an impact on the flow of equipment into the US, ”said Uffe Ostergaard, president of Hapag-Lloyd America.

The sudden decline in imports could lead to a shortage of containers for US exports. With the small number of containers entering the country being unloaded at major hubs such as Chicago, Minneapolis, or Columbus, Ohio, there will not be enough empty containers in those areas to meet the needs of exporters. Imports for products such as scrap or agricultural products.

Canceled sailings may cause container shortages

Shipping lines are beginning to inform customers that the number of canceled trains on the transpacific trade is increasing due to the shutdown of factories in Asia during the week of the Chinese New Year at the end of January. , followed by a shutdown due to Corona virus (COVID-19) in China, will disrupt the flow of containers imported into the US.

"Shipping lines are informing us of this shortage," said Hayden Swofford, an independent administrator of the Pacific Northwest Shippers Association, representing forest product exporters. Container shortages usually begin inland, but eventually spread to the West Bank, he added.

Bruce Abbe, transportation strategy advisor at Special Soya and Grains Alliance (SSGA), said exporters of soybeans and agricultural products in the North Central region of the United States had begun to run into problems. when taking empty containers they need.

"It's because the trains are canceled one after another," Hay Abbe said. Canceled trains and staff shortages at shipping lines and warehouses across Asia, especially in China, are limiting Asia's exports to the United States, he said. Container shortages are emerging near centers such as Chicago and Minneapolis. “Currently there are many uncertainties. People will find ways to handle work in the best way possible, ”Abbe said.

Kevin Krause, vice president of shipping services at SEKO Logistics, said that although he had ordered large quantities in January and February, he still had not seen a widespread shortage of containers at regional warehouses. Chicago. "But I predict that we will be short," he said.

From past experience in the post-Lunar New Year period, exporters around Chicago, Minneapolis, Detroit, Cincinnati and Columbus in Ohio Valley, may experience a shortage of empty containers. That situation is likely to occur more this year due to the closure of the plant becoming more common due to the Corona virus, Krause said.

Peter Friedmann, executive director of the Agriculture Transportation Coalition, said a shortage of empty containers was also appearing in California's Central Valley agricultural affluent area.

So far, trans-Pacific export shipments have not been hampered by a lack of space on board. Export shipments this season have been smooth, but Krause said SEKO Logistics is warning its customers that exports may spike in March, usually the peak month of the trans-Pacific.

Export shipping rates on ships heading west across the Pacific Ocean increased

The carriers are also informing customers of the general rate increase (GRI) for the western Pacific service, which shows they anticipate the number of seats that will be reserved. Previously, we have seen GRI ranging from $ 50 to $ 200, but increased from $ 100 last month, ”he said.

According to JOC's logistics and transport pricing center, the average export shipping price over the past two weeks was US $ 450 per FEU from Los Angeles to Shanghai. In contrast, shipping from Shanghai to Los Angeles is $ 1,423 per FEU. Therefore, the general price increase (GRI) for the westbound train transpacific is usually indicative of a higher percentage increase than the eastbound train, but the total transportation cost is low for the goods. exports are of lower value.

A number of shipping lines shared with JOC.com this week that they not only predicted that export shipping prices would increase but also began limiting shippers to the agreed-upon volume of volume commitment. minimum quantity (MQC). Exporters must sign a new contract if they intend to exceed MQC.

The US East Coast has not yet felt the decline in imports due to longer transit times from Asia. Sam Ruda, port director at New York and New Jersey Port Authority, said, "At this point in terms of unloading and loading is not a problem, but it will become a problem by March." .

“I do not see any imbalance in equipment. That could start to look a bit different in the next few weeks when we are shaping production, so we are following this very closely, ”he added.

Phaata (Source: JOC)

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