Shipping Issues Disrupt the Ag Industry

Shipping containers are in demand these days and for different reasons. First, trade has accelerated in the past year, creating an increased demand on shipments and the need for more containers. Manufacturers of shipping containers are increasing production in an effort to meet the increased demand.

Another reason, and of more concern, stems from the trade imbalance between the US and Asia. Agricultural containers that ship from the US typically ship for much less than the same container originating in Asia bound for the US. The high demand for goods from Asia has fueled these freight rate imbalances. The consequence of this trade imbalance is that many containers are leaving US ports empty to return to Asia quicker so they can refill at a premium price. This is creating challenges in the US agricultural industry where products must be moved in a timely manner.

Looking Forward

Adding more shipping containers to meet the demand raises concerns over already congested ports. Long delays at US ports will only get worse without some clever planning. The pandemic has fueled changes in buying habits and consumer demand, and at the same time, it has caused workforce shortages at the docks when an outbreak occurs.

All of these delays are costly for the Ag industry, and especially meat exports, as refrigeration requirements are a must and moving goods on time is critical for business. Some experts believe the port congestion to be seasonal and predict that it will return to normal levels by end of summer, but some believe this congestion is spreading to other ports and will not ease until 2022.

Bottlenecks can cause major disruptions to the supply chain. Knowing where the issues are and how to navigate around them makes for a great food trade partner. We work hard to stay on top of all the global food news, and use our knowledge to help our customers. Let us help you!

Stay tuned to Interra International news. We will continue to monitor the container shortage and port congestion issues and provide you with updates as they occur.