German international shipping and transportation company Hapag-Lloyd has told exporters it is suspending overseas agricultural container shipments from North America, which is likely to affect US shipments of soyabeans, World Grain reported on 23 October.
“Hapag-Lloyd has been one of the most reliable and dependable carriers for rural, inland ag shippers, so this announcement is devastating and shocking,” said Bob Sinner, president of North Dakota-based SB&B Foods and chair of the US-based Speciality Soya and Grains Alliance (SSGA)’s competitive shipping action team.
The move would disrupt the food supply chain, Sinner said, noting that consumption of soya goods had been strong during the COVID-19 pandemic and that worldwide inventories were low.
“For those of us in the soyabean arena, we are just coming off a harvest that our overseas food manufacturing customers are anxious and desperate to begin receiving.”
Hapag-Lloyd delivered 878 shipments of US bulk soyabeans overseas between 22 October 2019 and 25 September 2020, according to information from global trade data company Panjiva. The majority had been shipped to Japan, Indonesia, Hong Kong, Taiwan and Malaysia, as well as to Thailand and South Korea. During that period there had been 172 shipments of identity preserved (IP) non-GMO food-grade speciality soyabeans.
“Companies in those countries rely on us for their food manufacturing. We’ve got our new crop harvested and we’re making significant and consistent bookings with carriers to get our products shipped quickly and as soon as possible,” Sinner said.
The decision by Hapag-Lloyd had been driven by ‘hard economics during a time of unprecedented demand for higher-value North American consumer imports by containers from Asia at premium prices, World Grain said. Hapag-Lloyd had reportedly decided it needed to quickly reposition empty containers back to Asian shipping centres, even if this meant forgoing hauling critical food and agriculture products back to manufacturers overseas.
The decision ‘could cause major hardships within the entire US agriculture community’, SSGA said. However, it could particularly hit exporters in the Minneapolis-St Paul region as there was a frequent shortage of inbound containers to meet demand in this area.
SSGA said the move by Hapag-Lloyd posed an ominous sign for US agriculture exporters if other ocean carriers decided to follow suit or delay shipments. The organisation said it was encouraging Hapag-Lloyd and any other carriers considering similar decisions to rethink this policy.