It’s typical of IT projects to ber late or never get finished. Here we seem to have an example that is severely impacting everyone else in the supply chain.
Here at Felixstowe, you can’t return empty containers. You have to return them inland, at considerable extra cost and expense. It’s England, so the truckers are companies, and they can pass their costs along.
If this were the US, the individual owner-operators would have to take the expense, because they get a piece rate for a trip, regardless of where they have to return the container. they would have no way to pass on the cost. We see similar debacles occasionally at US ports.
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.
The constant stream of blanked sailings is predictably disrupting many supply chains and networks. Shippers are not getting the message, and it’s costing them extra, unplanned expense. That will percolate down to their customers as well, both in reliability and costs.
And shippers are complaining. No wonder!! The carriers are bringing it on. They are not considering ultimate customer needs.
Anyone wanting to create a disruption in maritime and hinterland supply chains will pay attention and try to do something about this.
Supply Chain and Logistics 