Some grain exporters are being caught in the rough waters that two years of economic crisis has churned up, the Wall Street Journal reported.
Holdups in ag shipments -- soybeans to Vietnam, pork to Hong Kong and South Korea, dried peas to India, hazelnuts and wheat and animal feed to unnamed destinations -- are a result of a perverse twist to a ship glut, the WSJ said.
"U.S. ports, thanks to the huge appetite Americans have developed for goods made abroad, are oriented more to the import than the export trade. So are the big foreign ship companies, which gear their schedules and their routes to American imports, not to exports.
"The ship glut, instead of providing more vessels, perversely is helping make fewer available. That's because the glut, in combination with a fall in trade during the recession, cut shipping rates below the cost of operation for some routes. Carriers responded by idling many ships and reducing their trips to the U.S., to save money and try to force shipping rates higher," the WSJ stated.
Later in the piece, it states, "Pork producer Smithfield Foods Inc. used to ship from ports in the Pacific Northwest. Because of a shortage of ships and containers there, Smithfield is instead hauling pork raised in the Midwest to Houston and putting it on vessels that traverse the Panama Canal. The result is higher costs and delays of seven to 10 days for customers in Hong Kong and South Korea, Smithfield says.
"The crunch is especially troubling to agricultural exporters, who mostly don't sell branded products. 'There are not enough ships or containers to handle the exports that the world wants to buy from us. This situation is becoming more dire by the day,' said Peter Friedmann, executive director of the Agriculture Transportation Coalition, a lobbying group. 'This isn't Nike or Adidas. If they can't get our hazelnuts, they'll buy them from Turkey.'
"Jeff Pricco, a Minneapolis-area soybean exporter, says he told a customer in Malaysia it would take 60 days, compared with the usual 15 to 21, to deliver 40 tons of soybeans. The customer said 'we need it sooner' and went elsewhere, Mr. Pricco says."
The story, by Jennifer Levitz, Tamara Audi and John W. Miller, appeared Friday and is still available to WSJ online subscribers at http://bit.ly/…
There are also some comments posted on the story which may be of interest to anyone interested in freight issues.