Container space for agricultural exporters in the US is expected to get tighter in the coming months, according to the executive director of the Agriculture Transportation Coalition Peter Friedmann.
"The free market solution of increasing prices for ocean and transport until demand is reduced to match existing container/vessel space supply, is an answer," he said in American Shipper.
But "the implications for our nation's balance of payments, and our agriculture sector are disastrous, and need to be understood by shippers, carriers and policymakers," he said.
Mr Friedmann said the space constraints are dramatically pushing up freight and fuel surcharges, increases he described as becoming meaningless. "Fuel surcharges are becoming meaningless, as just a conduit to higher revenue for the carriers."
He said that members of his organisation will meet soon in Washington to "consider the crisis, and explore approaches to gaining attention of policymakers.
He warned that in this current market environment of high demand and short supply, the new higher surcharges are sticking, saying: "Concern about retaliation, and in any case, [the exporter] is desperate to get the container on the vessel. And afterwards, the higher charges will be instituted legally in the tariff, because demand continues to exceed supply."
Failure to address these issues could in future spell disaster for US agriculture. "There is nothing produced in US agriculture that cannot be sourced elsewhere," said Mr Friedmann. "If we don't assure a dependable and affordable transportation system to get our products to the foreign markets, those customers will go elsewhere. That is exactly what we are trying to avoid now."
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