US exporters are having difficulty moving their goods due to a container shortage. The reason behind the lack of containers? Brian Conrad, executive administrator of the Westbound Transpacific Stabilization Agreement (WTSA), explains:
Most of the container manufacturing plants in China pretty much shut down and closed all their production lines, and the carriers are having a real problem in getting these people to ratchet those production lines back up again.
Stats from a Containerisation International article show that only 350,000 TEUs were produced in 2009. That number is a drop in the bucket compared to 2008's 3.25 million TEUs and 2007's 4.25 million. Agricultural exporters are especially having a tough time. Most are located in rural areas, and the cost of repositioning containers to get to their locations is sky high.
To give shippers a break, WTSA members have decided that no GRIs will be applied until September or October. When the general rate increases are rolled in, carriers will take “a more traditional commodity-based approach.” General Rate Increases are only one of the items on shippers' long list of problems. To address some of the issues, WTSA has decided to create a "shipper-carrier advisory board." According to Conrad,
It is not going to be a board that will talk about what is the rate for wastepaper and is it acceptable to raise rates out of Houston for resin -- it will talk about some of the broader issues.
Hats off to the WTSA for taking action. They are also working with the U.S. Department of Agriculture on a pilot project related to the equipment shortages, as well as participating in the Federal Maritime Commission’s investigation of capacity issues. For more information, read American Shipper's article.
