US container shortage menaces American export boom

THE benefit of a low dollar for US exporters is being lost because of a lack of containers to ship American goods overseas, reports The Wall Street Journal.

A global commodity boom has increased bulk freight rates, said the newspaper. This resulted in a shift of bulk produce into cheaper America-to-Far East backhaul containers, which in turn increased their rates.

The cost of shipping an FEU from the US west coast to China is now $1,500, up 20 per cent in the past year. And this has exacerbated a shortage of boxes already created by an American consumer slump caused by the US subprime crisis that has reduced the number of containers coming into the country.

Also, American import containers are not sent to places where American grain and cotton exports originate, such as southeast and Midwest and must be moved there at additional cost, thus devaluing export opportunities.

Finding containers was easy when imports were high and exports were low, but as the balance shifted in the other direction, export opportunities were lost because there were not enough boxes where they should be.

"There are some places, particularly in the Midwest, where there's a complete lack of containers," says Philip Damas, the head of container research at Drewry Shipping Consultants in London.