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August 20 2018

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10 The Journal of Commerce | August 20 2018 Cover Story down" rate is 30 percent or more. "There are no real issues with space," said George Goldman, pres- ident of Zim Integrated Shipping Services USA. "It's not just Zim. It's all carriers." Export shipments never delivered to the carriers can be 30, 40, 50 percent of all bookings, he said. "It is a fall down issue," said Law- rence Burns, senior vice president of trade and sales at Hyundai Shipping Agency. Carriers can book their out- bound vessels to 120 to 130 percent of capacity and still consistently sail with available space, he said. Hyun- dai Merchant Marine last month became the sixth carrier to join the New York Shipping Exchange, a technology-supported platform that offers enforceable ocean freight contracts for both shippers and car- riers. "We want to use these tools to get reliability from our customers," Burns said. HMM is now posting offers on the exchange. The loss or diminution of the China market for some commodities is disrupting containerized exports from the US. In the first five months of 2018, scrap paper exports dropped 14.1 percent to 408,234 TEU, iron scrap declined 35 percent to 72,249 TEU, and plastic scrap plummeted 43 percent to 37,084 TEU, according to PIERS, a sister prod- uct of The Journal of Commerce within IHS Markit. Total US containerized exports in the same period, how- ever slipped just 0.2 percent to 5.3 million TEU. The decline AS THEIR VOLUME slipped because of environmental and tariff restrictions, exporters of agricultural and scrap products are finding new markets in Southeast Asia and the Indian subcontinent, but they say ocean capacity constraints are keeping them from keeping up with demand. Ocean carriers counter that the capacity is there, but the booked cargo isn't. "Carriers are going where they want to go. They want a backhaul to China," said Bruce Abbe, president and CEO of the Midwest Shippers Association. As exports to China drop while volumes to Southeast and South Asia pick up, agricultural exporters are struggling to get slots on vessels serving the growing trade routes, he said. The problem has intensified since carriers recently rationalized their trans-Pacific services — reduc- ing capacity 6.7 percent to the West Coast and 1.3 percent to the East Coast — to cut costs, said Hayden Swofford, independent administra- tor of the Pacific Northwest Shippers Association, whose members ship forest products and related commod- ities. Rationalize is another word for combining service strings to reduce capacity in a trade lane. "You might have five or six carriers on a ship to India. The ships fill up," he said. Carriers disagree with those assertions, saying the perpetual ex- porter habit to overbook shipments is filling up the ships on paper, but the vessels are often departing with available space because the cargo "fall Struggling to get goods to market Scrap and ag exporters say ship capacity isn't there, while carriers say it's a booking issue By Bill Mongelluzzo

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