Transportation Tie-Ups Are Causing Headaches For The Export Business
A MARTINEZ, HOST:
Cargo ships are bringing in record volumes of back-to-school supplies and fall fashions. But when it's time for those ships to steam back across the ocean, many of their containers are empty. Transportation tie-ups are frustrating U.S. farmers and companies trying to export their own products overseas. NPR's Scott Horsley reports.
SCOTT HORSLEY, BYLINE: Bob Sinner's (ph) family has been farming in the Red River Valley of North Dakota for more than a century. Today, Sinner runs a company that sells specialty soybeans, mostly to food-makers outside the United States.
BOB SINNER: Primarily in Asia - tofu, soy milk, natto, miso, soy sprouts.
HORSLEY: It's a long way for soybeans to travel - 1,400 miles from North Dakota to the West Coast, then across the Pacific Ocean. Lately, Sinner's been facing delays at every step of the way, first by truck, then rail and finally on a cargo ship.
SINNER: All of the above times 10. It's a mess.
HORSLEY: That's a problem for Sinner's customers, who depend on just-in-time delivery, especially in hot and muggy Southeast Asia, where soybeans rot if they sit around too long. Unfortunately, soybeans that should have been delivered a month and a half ago are still stuck in warehouses in North Dakota.
SINNER: We've had customers in Asia that have had to stop their operations waiting for supply. It also means that our farmers need to get their storage facilities empty because we have a new crop that's coming in September, October. We have to get this product moving.
HORSLEY: Right now, though, the economics are stacked against that. Because of soaring demand in this country, cargo ships can charge more than seven times as much to bring a container from Asia to the U.S. as they can make on the return trip. As a result, it's often more lucrative for shipping companies to raise empty containers back to Asia for a quick refill rather than wait around for those containers to go all the way to North Dakota and back by truck and train.
(SOUNDBITE OF ARCHIVED RECORDING)
GENE SEROKA: The trade continues to be a one-way street.
HORSLEY: This is Gene Seroka, who runs the nation's busiest cargo port in Los Angeles.
(SOUNDBITE OF ARCHIVED RECORDING)
SEROKA: We're handling a lot of imports, not enough exports. And there are way too many empties going back.
HORSLEY: In fact, three out of four containers leaving Los Angeles these days are empty. And while the port's been handling record volumes of imports this year, exports in June hit a 16-year low. Part of the problem is the stuff exporters are selling is typically less valuable than what importers are bringing in. And the gap between cargo fares for goods entering and leaving the U.S. has widened dramatically since the pandemic. Alexis Jacobson manages exports for an Oregon company that sells straw to customers in Japan and South Korea. She's paying more than usual for shipping but says there's a limit to how far she can go.
ALEXIS JACOBSON: We're not a high-dollar commodity. We have to ship at the lowest freight or we can't make the shipment.
HORSLEY: Farmers and other exporters have complained to the Federal Maritime Commission and members of Congress. But shipping companies insist neither regulation nor legislation is the answer. John Butler, who heads the World Shipping Council, told lawmakers last month booming demand from American consumers has stretched every link in the global supply chain.
JOHN BUTLER: What's really driving these problems at root is the massive increase in U.S. imports.
HORSLEY: Carriers argue transportation bottlenecks in both directions should ease once consumer demand in the U.S. returns to more normal levels. But in North Dakota, Bob Sinner's getting impatient. For months now, he's been assured by shipping experts that relief is just around the corner, only to be disappointed.
SINNER: Now they're saying it could be better by the end of the year. Who the hell knows? And let's be honest, we're not the only store in town. Our customers have choices. And if we can't deliver in an efficient and reliable way, they're going to look for other sources for their product.
HORSLEY: Exporters worry even if transportation problems are eventually resolved, once customers go elsewhere, they may not quickly come back.
Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.