The biggest concerns of agricultural exporters as the 2012 peak-shipping season approaches are equipment availability, adequate vessel space and volatility of freight rates.
Exporters who addressed the annual Agriculture Transportation Coalition conference in San Francisco said Thursday they are looking for a good, though probably not a spectacular year in terms of volume.
Despite strong U.S. exports in recent years, industry analysts have scaled back their growth projections because of economic problems in Europe and the residual impact of the European crisis on major U.S. markets in Asia.
Journal of Commerce economist Mario Moreno this week reduced his forecast for growth in containerized exports this year to 2.3 percent from his earlier projection of 3.5 percent.
Even if export growth is disappointing, shippers in areas of the country that normally experience container deficits may still struggle to get sufficient equipment during the fall harvest.
Emily Deng, director of international logistics at Davisco Foods International, said she is concerned agricultural shippers in the upper Midwestern states such as Minnesota, Iowa and the Dakotas could experience equipment shortages later this year.
Vessel space also could be an issue if carriers don’t deploy sufficient capacity in the Pacific for the fall peak shipping season in the eastbound Pacific, said Jeff Siewert, vice president of operations at global food trader and distributor Interra International.
Trans-Pacific carriers deploy capacity based on the projected volume of imports, and lackluster growth in imports, combined with declining freight rates, could cause carriers to hold back on entering additional capacity into the trade. This could have a negative impact on agricultural exports, Siewert said.
Rate volatility also is damaging to agricultural exporters as their margins tend to be thin. Carriers in the westbound Pacific have taken two general rate increases this year, and in some cases that was enough to price exports out of the trade, Siewert said.
International trade is already a complex endeavor, so a more consistent carrier policy on freight rates would allow agricultural shippers to plan ahead when pricing their export shipments, Siewert said.