DC Velocity - August 2012

Behanna of International Asset Systems takes a more optimistic view. He said that, for the first time in years, exporters and ocean carriers are concluding that ridiculously low westbound shipping rates are helping no one. Higher rates will encourage carriers to provide the equipment needed to get exports to the docks, and exporters will be more comfortable knowing that the boxes will be there when they need them, he said.

Behanna said that talk of a container shortage doesn’t square with reality, adding that firmer shipping rates for carriers are the tonic needed to correct the imbalance. “If rates go up, the ‘shortage’ goes away,” he said.

To be sure, it is premature to say that export containers are in chronic short supply. Fornazor, head of Fornazor International, said his company has no problem securing containers for its export traffic. Douglas W. Gray, general manager, international transportation operations for Caterpillar Logistics, the logistics arm of titan Caterpillar Inc., said Cat Logistics has contractual agreements that guarantee a specific level of container availability, and that the company’s sizable import activity provides a cushion to protect against equipment imbalances.

“We are not generally struggling with getting containers today,” Gray said in an e-mail.

Kemmsies, however, believes the future may tell a different tale. Under a scenario where export and import flows are evenly matched, global container positioning will be turned on its head. For years, fully loaded equipment from Asia entered U.S. commerce and would return empty for re-stuffing. In the future, it would not be surprising to see empty containers actually entering the United States from Asia to be filled with exports for the returning westbound move, Kemmsies said.

The worldwide supply chain has not modeled for such a profound change in equipment balance, Kemmsies said. “This then becomes a global logistics problem,” he said.

Adding to the positioning issue is the potential of a general shortage of containers to move U.S. exports to their ports-of-departure. Although he doesn’t have data to

quantify it, Kemmsies said he suspects
there will soon be shortages of refrig-
erated containers as well as twenty-
foot containers. In addition, the ratio
of container equipment in stock ver-
sus equipment in use is today about 2
to 1, down from the traditional 3 to 1
ratio, meaning there are fewer surplus
boxes available if they’re needed,
according to Kemmsies.

;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;

;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;