Shipping container shortage is getting worse

The concerns that the international shipping crisis will get worse for US agricultural exports before it gets better are pertinent again, as shipping container costs continue to rise. Also, incentives to "dead-head" empty containers to Asia for quicker turnaround are at the root of these concerns.

California nut traders have seen their shipping times increase starkly, if they're able to move their products to international markets at all. Yet, monthly reports from the Almond Board of California still point to record export shipments of California almonds. If the trends hold, California will have exported over two billion pounds of almonds in the 2020/21 marketing year, which ended August 1

Jim Zion, managing partner of Meridian Nut Growers in California, said he recently had a load of tree nuts take 77 days to get to Spain, while a more typical transit time was 35 days earlier.

A Rabobank report points to the consolidation of maritime carriers from 18 companies to an alliance of three. This consolidation was done to improve efficiencies. Shipping container fees that once were $2,500 pre-covid are now much higher. A shipping container from Hong Kong to Los Angeles now costs over $7,600. That doesn't include shipping costs on the vessel and other assorted costs. Spot market container costs are said to run between $12,000 and $15,000 per container.

Peter Schneider, president of T.G.S. Logistics in Fresno, California told farmprogress.com that cost spread between what specialty crops pay for a container and what the shipping companies can charge for consumer goods coming from international suppliers, when combined with the three-week turnaround time it takes to unload, process, and return a container that once held US agricultural goods, has become a financial incentive for the maritime shippers.

 

Photo source: Dreamstime.com


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