Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Tuesday, May 13, 2008 U.S. exports hurt by port bottleneck Los Angeles Times At the time when the struggling U.S. economy needs the biggest boost it can get from booming exports, companies and agricultural producers with American goods bound for overseas can't find enough empty cargo containers and have to wait weeks to get space on ships headed to Asia. Only a few years ago, the trade bottleneck was the reverse. At U.S. harbors there were too few dockworkers to handle surging imports. Inland rail capacity to the rest of the U.S. was similarly strained. Now, because of the container problem, U.S. exporters find themselves unable to take full advantage of the competitive edge of a weak U.S. dollar. "We could export a good 20 percent more in agricultural products from this country if there was the capacity to handle it," said Peter Friedmann, general counsel for the Washington, D.C.-based Agriculture Transportation Coalition, a lobbying group formed to help growers become more competitive internationally. "People talk about how important it is to reduce the trade deficit. Well here is one way to do it, and the opportunity is slipping away." The container problem is felt most acutely in the Midwest, said Friedmann and other experts. "Last year, I could have called for a ship and had it by next week. Now it takes up to six weeks to book one. There just isn't enough room on the ships," said Howard Wallace, president of the Los Angeles Harbor grain terminal, where exports are up 150 percent this year. Friedmann said he knew of a California dairy that could have sold 600 more containers of goods overseas, if it had been able to find cargo boxes. A beef and poultry producer in the Midwest, Friedmann said, missed out on at least $10 million in sales overseas for the same reason. There are several reasons for the bottleneck of exports bound for Asia through the West Coast ports. The weak U.S. dollar has combined with growing Asian economies to increase the demand for U.S. goods, increasing the need for containers. But when the U.S. economy cooled and American consumers began tightening their belts, oceangoing shipping lines pulled as many as 30 percent of their vessels, and a commensurate number of containers, out of the routes from Asia to the West Coast. They moved them to Asia-to-Europe routes and to routes between Asian countries where the economies were more robust, said Paul Bingham, an economist for Global Insight. Another problem is physics, said Asar Ashaf, head of the Washington, D.C., office of the University of New Orleans' National Ports and Waterways Institute. A ship that can carry 8,000 containers of finished goods such as electronics, toys and apparel from Asia to the U.S. can't carry 8,000 containers of exports from the U.S. back to Asia. "The exports are heavier: grains, paper, scrap metals. The ship reaches its tonnage limit much faster, so maybe it is carrying only two-thirds as many containers of exports back to Asia," Ashaf said. Also, the shipbuilding industry has placed far more emphasis on building container vessels than on the bulk carriers that used to dominate trade in items such as grains and scrap metal. Wallace said the competition for the limited amount of space available on bulk vessels has made using them much more expensive than container ships. Plus, Wallace said, his Asian customers prefer their agricultural goods shipped in sealed containers. "Once they start using containers, they don't want to go back to bulk," Wallace said.

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