Low outbound container shipping rates are one of several factors, including low electricity rates and competitive labor costs, that will help the United States grab $70 billion to $115 billion in annual exports from competitors over the next seven years, according to The Boston Consulting Group.
The imbalance of imports to the U.S., coupled with an increased port capacity, has produced low outbound shipping rates on some major trade routes, according to the latest report from the global consulting group on U.S. export potential. The cost of moving a 40-foot-equivalent unit from Yokohama, Japan, to Rotterdam in late 2011 and early 2012, for example, was about $3,900, compared with $1,400 to move the same unit from New York City to the northern European port.
“Although freight costs from the West Coast of the U.S. to Japan are only slightly lower than those from Europe to Japan, U.S. exporters have an advantage because the shipping distance is shorter, meaning they can more quickly get their goods to Japanese buyers,” BCG said in its report released Tuesday. “
The group said shipping cost from the U.S. to China was as cheap as $850 per FEU because containers returning to the Asian manufacturing powerhouse often return empty. A shipment from Japan to China costs about $700 per FEU, according to the report.
"As a result, Japan’s proximity to China will not necessarily be enough to offset the U.S. advantage in lower overall production costs for many products that are not time sensitive," according to the report.
U.S. port capacity utilization was about 54 percent in 2010 after capacity nearly doubled between 2000 and 2008, according to the report. Capacity utilization at European ports was 59 percent in 2010; 69 percent at Northeast Asian port; and 76 percent at Southeast Asian ports.
The boom in domestic energy production will also help drive the creation of 2.5 million to 5 million U.S. jobs tied to exports, the report’s authors Harold Sirkin, Michael Zinser and Justin Rose wrote. BCG says the U.S. could snatch up to 5 percent of exports produced by Germany, Japan, France, Italy and the U.K.
As shale gas production has expanded more than tenfold, U.S wholesale prices have fallen 45 percent since 2005. That has made the U.S. far more attractive to energy-intensive manufacturers, such as makers of plastics and chemicals. BCG sees the biggest potential for U.S. exports in transportation equipment; chemicals; machinery; petroleum and coal products; computer and electronic products; electrical equipment, appliances and components; and primary metals.
“The U.S. labor market is currently more attractive than that of all other major manufacturers among the developed economies,” according to the report. “This is especially true when factory wages are adjusted for output per worker, which is considerably higher in the U.S. than in Europe and Japan.”