shipping container

Trade Imbalance Hits American Crop Exports With Lack of Containers

Bloomberg
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October 15, 2020

Photo: MOLPIX / Shutterstock

By Michael Hirtzer (Bloomberg) — With the U.S. importing more goods than it’s exporting, shipments of American cotton, grain and hay are getting squeezed due to limited availably of shipping containers.

Peter Friedmann, executive director of the Agriculture Transportation Coalition, warned that customers in Asia will avoid U.S. supplies if container shipments from competitors in Australia or South America are cheaper.

“If we can’t deliver affordably, dependably, then our foreign customers will go somewhere else,” Friedmann said in a webinar Wednesday hosted by the Port of Los Angeles, the U.S.’s largest such facility for containers.

Containers come to the U.S. carrying goods such as TVs and shoes generally are either shipped back to Asia empty or filled with grain or other raw materials. Shippers in Asia sometimes would rather have a container come back empty rather than delayed by picking up goods in the middle of the U.S. in states such as Texas or Wisconsin, Friedmann said.

“The price margins are very thin, so they can only afford to pay so much for freight,” Friedmann said. “Our objective is to get more of those containers.”

Last year, 9% of U.S. waterborne grain shipments were in containers, according to the U.S. Department of Agriculture.

U.S. imports arriving at Los Angeles port stay near record but exports lag
Inbound shipments arriving at the Port of Los Angeles totaled 417,795 containers in September, a little less than the record 516,286 units in August as retailers continue to replenish inventories ahead of the holiday-shopping season, port Executive Director Gene Seroka said at the same event.

The number of empty containers leaving the port to return with imports was 281,434, slightly less than the prior month’s record. Exports, which were on a downward trajectory before the start of the pandemic, snapped three months of gains and declined to 130,397 units.

The U.S.’s goods-trade deficit widened in August to a fresh record of $82.9 billion as companies raced to replenish depleted stockpiles with imports in the face of firmer demand.

“Regardless of who wins the upcoming elections, our country is in desperate need of a cohesive export plan, as well as a national infrastructure program, and a digitization strategy for ports across the country,” Seroka said.

© 2020 Bloomberg L.P.

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