The Agricultural Transportation Coalition (AgTC) held its 36th – and largest ever – annual Conference in Tacoma the week of May 19th. Peter Friedman and his staff continue to organize and deliver a content-rich experience for their members. Here are some takeaways: The opinions are my personal observations.
Lars Jensen, CEO of Vespucci Maritime, and well-respected industry expert, came from Copenhagen to share his insights. Many of them were similarly expressed by Fabio Santucci, President of North America, MSC (Mediterranean Shipping Company).
- There is no vessel capacity anywhere in the world. If it can float, it is deployed. That is why rates have already started spiking right after service contract signings on May 1st. This is unheard of.
- The result is that import revenue may exceed 90% of a load-load import-export roundtrip.
- Since containers are also in scarce supply, this may make it very difficult for exporters to have access to cost-effective capacity.
- “Cost-effective” is the operative term, because a statutory/regulatory mandate to offer rates does not mean that exporters will be able to afford them.
- Nevertheless, these conditions could change very quickly.
There were two (count them... TWO!) Federal Maritime Commission members present. Chairman Dan Maffei and Commissioner Rebecca Dye. Their attendance was well received given the plethora of issues confronting the industry. I would observe that this may be the most engaged commission since the late 1990s.
The issues of equipment detention and demurrage were “Everything Everywhere All At Once.” There were sufficient apocryphal anecdotes to make a series of shipper horror films. The FMC finds itself between movable objects and irresistible forces with new rules taking effect May 28th. (See Here)
Gene Seroka, CEO of The Port of Los Angeles, gave a speech that identified some of the challenges – but failed to explain how they could be solved. For those who believe that southern California’s maritime preeminence is living on borrowed time, these remarks would certainly not have changed your mind.
There was a lot of discussion of inland intermodal options for agricultural exports. The Northwest Seaport Alliance and Union Pacific Railroad both highlighted their intentions to continue to offer these options; however, there was a great deal of concern that rail service might exist from origins that had no empty container supply. Greg Oberting of Rail Modal Group described their growth of inland origins; however, some shippers expressed concern about getting reservations – if they could even get empty containers.
We (Tri-Cities Intermodal) espoused the opportunity of bringing exports to the container when it is impossible to bring containers to the export. In addition, we described a vision where the Tri-Cities develop a robust intermodal network of ISO imports and exports, accompanied by effective transloading with domestic. This would utilize underserved port assets, provide increased truck efficiency, and do it cheaper, safer, and with much less environmental damage.
There were a number of other panelists who provided interesting insights.
My final observation is that information exchange is still a major shortfall. Unfortunately, there is a belief (especially from IT vendors) that technology can solve structural and institutional obstacles. This is nonsense. New technologies (e.g., APIs, Blockchain, etc.) will just enable greater confusion to be achieved more quickly.
