Tag Archives: container shipping

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.

https://www.spglobal.com/platts/en/market-insights/latest-news/shipping/082820-containerized-soybean-exports-from-us-to-asia-spike-long-term-opportunity-seen

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Blanking voyages masks real impact of Covid

Spot rates for container shipping are staying up, but only because ocean carriers continue to blank voyages big time.

If you were shipping and you feared your voyage would be blanked, what would you do?  You would be prepared to buy some shipping at spot, to be sure you can get on the ship.   Your ratio of long-term (and possibly delayed) contracting for shipments and your short-term purchases would change in favor of the short term.  And that would keep short term demand up in spite of a long-term need going down.  That’s what’s happening now.

With COVID-19 out there, and no certainty about international trade, it seems certain that conditions are much worse than are being reported based on shipments. At some point the other shoe will drop, and all prices will go down.  We need not to trust the BIMCO spot prices for future predictions right now.

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via Blanking voyages holds ocean rates steady, but masks the real impact of Covid – The Loadstar