Shippers say the chronic shortage of container cars has worsened in recent months and is hindering exports of a variety of agricultural goods across North America.
With the United States economy cooling, ocean carriers are reallocating vessels to other markets like Europe, South America and Asia.
The restricted supply of ships and the containers they carry is happening at the same time that demand for North American agricultural exports is skyrocketing, frustrating shippers who can’t satisfy their customers.
“The demand is growing and our ability to export is not growing,” said Jacques Pomerleau, executive director of Canada Pork International.
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He estimates 60 percent of the country’s pork exports are shipped by container. Everything, except product moving to markets in the U.S. or Mexico, travels by refrigerated container.
The industry has wrestled with the problem for years but lately the situation has gone from bad to almost intolerable.
“Since the beginning of the year it is really getting worse and worse and worse and worse,” said Pomerleau.
Cold storage facilities are packed with Canadian pork, a situation the industry hasn’t seen in a long while.
“As far as we’re concerned we could ship a lot more. There are products in storage that could have been shipped if we had the containers.”
Similar complaints are surfacing south of the border. Peter Friedmann, executive director of the Agriculture Transportation Coalition, an American lobby group based out of Washington, D.C., said the North American container shortage is constraining shipments.
“There could be at least 20 percent more agricultural exports by value than what we’re exporting now,” he said.
Friedmann has heard reports of a California dairy that missed out on sales of 600 containers of product to overseas markets, and a beef and poultry producer in the Midwest who lost at least $10 million in export sales because they couldn’t find any boxes to ship their goods.
Exporters are overbooking containers and ordering far in advance of their actual needs in hopes of getting what they want when they want it.
Friedmann believes the problem stems from the outdated and inaccurate notion regarding the profitability of exports from North America that has permeated the ocean carrier community.
“The carriers have just presumed they couldn’t make any money on export cargo and have been totally single-mindedly focused on import revenue.”
He believes that if the carriers started speaking to agricultural exporters they would realize that commodity prices have risen and shippers are willing to pay more for better service.
“We need the dialogue to get underway. When they recognize the additional revenue they can get, they will reallocate ships back to this trade.”
Friedmann hopes the dialogue will begin at the Agriculture Transportation Coalition annual meeting in San Francisco in June when the issue will be aired in front of invited officials from the ports and ocean carriers. He said Canadian agricultural importers and exporters are welcome to attend the event.
His association is lobbying for changes to the Ocean Shipping Act of 1984, which allows ocean carriers to collectively meet and set prices, rates and surcharges.
In other industries that is called price fixing and it is illegal, said Friedmann.
