September 20, 2023–U.S. containerized imports and exports comprise much of the business along the country’s supply chains today. While the two sides of the business are interconnected, they still have different priorities and issues getting their goods to market.
Looking into their interconnections and differing priorities, Cargomatic Chief Spokesperson and SVP of Industry Relations Weston LaBar spoke with two leading industry experts: Peter Friedmann, executive director of the Agriculture Transportation Coalition, and Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
Friedmann is quite clear about the state of the interconnection, noting that there would be no U.S. agriculture exports were it not for the nation’s import trade.
“Ocean carriers put their ships in service to carry the cargo that we import from Asia. The clothing, the electronics, the shoes, the furniture all pay much higher freight rates than do our U.S. agriculture exports,” Friedmann said.
The financial incentives that imports carry for the ocean carriers means a good many problems for exporters down the line since imports tend to gravitate to urban centers, while exports emerge from rural locations.
That creates the problem of “repositioning,” which means someone must pay to move a shipping container to a rural agriculture exporter once it has been emptied in an urban location.
The best solution, according to Friedmann, comes when railway lines recognize they can accommodate agriculture exporters by dropping off empty shipping containers at inland ports en route from one location to another.
“The successful inland ports are places like Pocatello [Idaho] where Union Pacific says ‘We don’t have to go any place different. We’re already hauling empty containers back from Chicago and the population centers to the West Coast gateways to go out’.”
Since the railroad company already is passing through a place like Pocatello, it can just build a siding and does not have to go out of its way to reposition the empty shipping containers. But, Friedman said, “That’s if it’s on the route.” And if it’s not?
Retailers, by contrast, rarely experience any issues with repositioning. But they do have problems of their own.
Gauging the demand of consumers over the past several years has been a major challenge for retailers, according to Gold, who noted the “different buying patterns that have been happening” during that time.
“Consumers certainly have shifted some of their buying patterns, where during the pandemic when they were stuck at home, they were buying up everything to, you know, fix up their house, redo certain elements in their housing, and buying stuff for the kids.”
Things have changed more recently as consumers shift back from only buying goods to buying services, traveling, and heading out to restaurants and concerts.
Another new pattern is that consumers are now buying earlier in the holiday season than they did in past years.
“Years ago you would wait until Black Friday to start your holiday shopping,” Gold said. But now consumers are starting their end-of-year seasonal shopping as early as October, Gold said.
“But even prior to that, we started seeing buying earlier in the season, and retailers certainly were planning for that as they started shifting their peak season,” he said, noting that it has changed from September and October in the past to July and August nowadays.
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