Tag Archives: agriculture

US exporters revolt over cost of changing earliest return dates

This story isn’t pretty. It details how shipping lines are not providing accurate information on earliest return dates, and in fact are often changing them at the last minute. Those changes often result in penalties charged to shippers.

It’s another example of how ocean carriers refuse to look out for their real customer’s well-being. This sort of business model would be doomed to failure in most industries. But the ocean carriers seem to get away with it.

No wonder they are in such disrepute.

I’m not saying such customer service is easy to provide. There are lots of barriers.

I’ll tell you a story about my days as an IT guy. It was the disk drive business, not ocean shipping, but the idea is similar. Our top management asked us to provide a system so customers could call in and find out the status of their orders– where they were in the build process, and when we expected they would ship. This was long ago when there was no text messaging or even an internet. We used modems and dumb terminals, not PCs.

We devised a text-to-voice phone system which would read our manufacturing data (specifically the MRP workorder system) to locate the customer’s order and read her the status over the phone. the system worked great– you could call in from any phone and the system would find your order and read its status to you. We expected the system would be wildly popular, and customers would love it.

It started with a splash. Customers and salespeople dialed and got the message. It was very busy. But in a couple of weeks no one called.

When we investigated why, we found that the system worked great. The problem was that manufacturing decided the only statuses were order received and order shipped, nothing in between, and no time prediction. so the system worked great, but people had decided not to provide good information.

Manufacturing didn’t want to reveal the estimated dates; they wanted the freedom to change schedules at will without notifying customers.

I think that’s the real problem here– ocean shippers don’t want to limit themselves by revealing ERDs to customers. They think it would constrain their operations too much. No commitment. And to boot, they are able to collect fees from customers who didn’t realize there was no commitment. The game is patently unfair– there’s no economic incentive to get the carriers to reveal valid info.

Without a fair game with incentives for cooperation, there won’t be any. Prepare for some attempts to gain that fairness. Perhaps a search for regulation of the information rules and standards by government.

By Alex Lennane 19/10/2020

US exporters in revolt over the cost of changing earliest return dates – The Loadstar

Heartland shippers feel 20-foot box squeeze

Twenty-foot containers are better than 40-foot containers for many ag products, and for machinery. Neither of these completely fills a container, and the smaller size means less blocking. But the containers are in short supply in the Midwest.

Twenty-foot containers are also ideal for products like soybeans, which have considerable Midwest-to-Asia container trade. They are a better size for shipments, because they are a bit smaller. We can’t always get a full forty-foot container because of the order size, which for premium products tends to be smaller. High-quality non-GMO beans often are not grown in the large bulk quantities.

Fewer products are shipped to the Midwest in 20-foot containers. And apparently, many of the 20-footers from the Far East are simply reused in California and Washington, rather than moving east. Goods could even be transshipped there to 53-footers for the ride into the Midwest. There’s no shortage on the West Coast.

This kind of problem is what plagues logistics operators of all kinds, as well as shippers. A simple little issue, very hard to do anything about. How do we cope with it?

By Chris Gillis Tuesday, April 28, 2020

Link: https://www.freightwaves.com/news/heartland-shippers-feel-20-foot-box-squeeze

Containerized soybean exports spike

There are suddenly more exports of soybeans to China in containers. It’s earlier than usual, and more of them. Over several years now, containerized exports of soybeans are rising, but suddenly it’s faster. A Taiwanese source said that “it’s more competitive than bulk” right now. Taiwan seems to be the main purchaser.

There are a few reasons why containers might be better for soybeans. First, you can trace the source much more closely than bulk. For customers who care, this may be a big deal. Second, the quality may be controlled better. In bulk vessels the beans are mixed with other lots, and even when an attempt is made (usually with a tarp or other barrier) to keep beans from two sources separate, some may escape the barrier. A third reason is ease of off-ship handling in areas where there aren’t good bulk unloading and storage facilities. Many remote regions can handle containers, load right on a truck, and transport inland to a distant point, when it might be difficult with bulk beans. And of course, it is a product that can be loaded for reverse travel for containers, to get them where they will be needed next.

I think in general we would expect bulk beans to be cheaper, because according to the article, the containers hold 20-22 metric tons of beans whereas bulk lots tend to run to 60,000 metric tons. However, it is nice to see that the niche is growing.

Chris Clott and I wrote a paper on this some years ago: Clott, Christopher B., Bruce Hartman, Elizabeth Ogard, and Althea Gatto. (2014). “Container Repositioning and Agricultural Commodities: Shipping Soybeans by Container from US Hinterland to Overseas Markets”.  Research in Transportation and Business Management. DOI: 10.1016/j.rtbm.2014.10.006.