Shipping woes tie up growers, exporters

TACOMA — Anybody looking to ship something, whether it’s hay or apples and it’s going to China or simply Chicago, really needs to plan ahead right now.

Because the problems plaguing the shipping industry are likely to persist well into 2022.

According to Pat Boss, a transportation consultant and director of governmental affairs for the Columbia Basin Railroad and Central Washington Railroad, it’s not possible to simply call a cargo company and get something shipped.

“To secure capacity on the rails or by truck you can’t just call up somebody like you used to be able to on a Tuesday and have the truck there the next day or the container there the next day. It doesn’t work that way, right now,” Boss said.

Boss said what could be done in two or three days likely now takes two or three weeks, and that’s just the way it’s going to be for a while.

“And if you can do that, you’re probably going to have more success,” he said.

The problems in global shipping are largely the result of the imbalances caused by the COVID-19 pandemic, when the shuttering of businesses and the start of work from home here in the United States prompted people to buy more stuff and fewer services, according to Steve Balaski, the director of business development for the Northwest Seaport Alliance, which operates the Port of Seattle and the Port of Tacoma.

“Across the board, there’s been an unprecedented demand for imports, and that’s created bottlenecks and impacted exports,” Balaski said.

It’s also driven shipping rates much higher, Balaski said, and caused what are otherwise two very balanced ports in the Pacific Northwest — ports which export nearly as much as they import — to import far more than they ship out.

According to alliance data, the two ports imported 1.45 million TEUs — equivalent to the amount held by a 20-foot-long shipping container, a standard unit in international shipping — during the first 11 months of 2021, an 18% increase when compared with 2020.

Of those imported TEUs, only 6% came into the U.S. empty.

During the same period, the port handled 1.3 million TEUs outbound — primarily to Asia — of which 52%, or 687,850 TEUs, were empty. That’s 58% more empty outbound containers than in 2020.

Figures published by the Shanghai Shipping Exchange shine the clearest light on rising freight costs, which have only been rising since mid-2020. On Jan. 14, 2022, the China Shanghai Containerized Freight Index, a measure of shipping prices from across the world, closed at time 5,094.36, compared with 839.27 on May 29, 2020, just before it began its meteoric rise.

“They felt like they were able to make revenue off of the inbound containers coming in,” Boss said. “So consequently, they decided we’re going to have all these imports coming in and just put these containers back on the ships and send them back empty as fast as we can, because the imports are making us more money.”

It’s led to a backlog in imports and containers piling up at ports and elsewhere, both Boss and Balaski said.

“The ports are congested, and there are vessels at anchor waiting,” Balaski said. “We have a smaller backlog at the Port of Seattle and Tacoma, 12-15 ships, and vessel scheduling is off.”

However, Balaski said this is a worldwide problem, with a huge number of vessels sitting at anchorage off the Port of Shanghai as well waiting to be unloaded and reloaded.

“It’s a global supply chain issue, and that makes the problem more challenging,” he said.

One possible answer is to move some of the container handling away from the big coastal ports like Seattle and Tacoma to places like Quincy and Pocatello, Idaho, where intermodal terminals have the ability to load outbound shipping containers — in the case of Quincy, with frozen, processed potato products — and then put those containers on trains bound for cargo ships.

It doesn’t do much to alter the shipping schedule, but it does lessen congestion in the yards and on the docks. And it may make it easier to keep containers on hand that can be filled with goods bound for export.

“We are working with Quincy, and we’re involved with exploring opportunities for other rail service in Eastern Washington,” Balaski said. “It’s definitely where things have been heading. We’re looking for a place in Eastern Washington to make the concept work, and it does in general improve the supply chain.”

Boss said inland terminals like that being developed in Quincy, and contemplated for Pasco, would give exporters more alternatives.

“That would help a lot with giving shippers more choices and more opportunities,” he said. “And a lot of these products just can’t sit around forever, they’re agricultural products, they don’t have a shelf life of several years, they have to be shipped usually fairly immediately.”

Charles H. Featherstone can be reached at cfeatherstone@columbiabasinherald.com.