Increased levels of international trade are creating shipping container shortages. The upcoming holiday season is expected to exacerbate the problem even further. Traditional trade flows have also been significantly altered due to COVID-19. The demand for containers particularly in China and Southeast Asia is making it difficult for American agricultural producers to get their products exported.
“It’s something we see every year but not to this degree,” said Roger Isom, President and CEO of Western Agricultural Processors Association (WAPA). “The problem is that every empty container, they don’t want to give them to ag to load with almonds, or walnuts, or pistachios. They want as many empty containers as they can get their hands on and get those back as quickly as possible.”
Demand for containers in China is so strong it has created a substantial imbalance in shipping rates. Freight rates moving products from Asia to the U.S. West Coast have been as much $5,000. Exports leaving the U.S. to places like China have a shipping rate between $400 and $500. Carriers have been incentivized to neglect U.S. exports. Instead of waiting for containers to be taken from the port and loaded with American ag products, it is more economically viable to take empty containers directly back to China. That scenario has results in agricultural orders being rolled over for weeks at a time or cancelled altogether.
“We were hearing that there were no 40-foot containers available, then there were no 20-foot containers available. On Thursday last week we started hearing that at least two shipping companies have said ‘no more ag exports until after the Chinese New Year, so probably March of ’21.’ Well, what are we going to do?” Isom noted. “This is devastating, and it couldn’t have happened at a worse time.”
WAPA has been working to find a solution to help address the issues created by the shipping container shortages. Isom explained that they have been in contact with the Ports of Oakland, Long Beach and Los Angeles, the Department of Commerce, and the International Trade Commission. WAPA has also been working with Senator Dianne Feinstein’s office and the California Congressional delegation.