Digital Edition

Feb. 2014

Issue link: https://jocdigital.uberflip.com/i/336707

Contents of this Issue

Navigation

Page 5 of 31

FEBRUARY 2014 COOL CARGOES 6 THE JOURNAL OF COMMERCE www.joc.com F OLLOWING A FRENETIC decade of ups and downs in volumes and rates, the steam- ship industry is seeking stability through alliances and cost-cutting that has lengthened voyage transit times. While many shippers don't see much of a problem in slow- steaming, exporters of refrigerated goods have more reason to be concerned. In the proposed P3 Network among Maersk Line, CMA CGM and Mediterranean Shipping Co., ships moving from Asia to the U.S. will get a speed boost to 19.9 knots. The three carriers plan to offset the eastbound increase in fuel by using less on return trips to Asia. U.S. food expor ters will see vessel speed slow to just 12.4 knots, subtracting valuable days of shelf life for perishables such as fr uits, vegetables and chilled meats. A decade ago, ves- sels regularly sailed to Asia at 18 to 20 knots, or higher. Perhaps more troublesome to exporters is the move among the P3, the G6 alliance and other indi- vidual and cooperating steamship lines to trim port calls, something that tra nslates into increa sed transshipments. The combination of slower speed and fewer direct routes makes it more challenging to get high-value foods from fi eld to for- eign table. Meat exporters have mixed feel- ings about the slower transit times. "If it adds a day-and-a-half to what is now a 21-day trip, or two days to a 28-day trip, in most cases it would be manageable," said Joe Schuele, a spokesman for the U.S. Meat Export Federation. "Exporters that regu- larly deal in our major markets are confident in where shipments go and are consumed, and they know the leeway available." But Schuele thinks it's unlikely ultra-slow-steaming will lead to a modal shift. "Overall, only a very small percentage of meat is shipped by air," he said. "We had some suc- cess with chilled exports to Russia by air before the Russian market was closed to us. We don't think this will be severe enough to push shippers to air." Meat exporters don't want to "sound like alarmists," Schuele added. "I don't think it's going to cause a major slowdown in sales. But it is not a desirable change for a market that depends on getting a product in place quickly." The concern, he said, increases when looking at markets the pork and beef industries are trying to develop, noting they are farther away geographically. Chilled meats, as opposed to frozen, sell for a much higher price in Asian markets, and the reputa- tion of the premium products is what sets U.S. meats apart, he said. "The growth in chilled meat exports has been an important part of increasing our sales in Asia," Schuele said. "And anything that might hinder market growth or curb enthusiasm for our chilled meat isn't good." In the burgeoning Japanese market, half the beef and pork sold is chilled, a percentage that has been increasing there and in other key markets. "We would like to keep moving forward in Asian markets. As we make our way into those destinations that are farther west, it becomes more and more of a logistical challenge to deliver that product," Schuele said. Robert Brown, an independent contractor who acts as export manager for Delta Packing of Lodi, Calif., and Pinnacle Trading Inter- national of Gilroy, Calif., agrees that the slower speeds shouldn't impact the status quo on shipping. "About 90 percent of cherries go by air," he said. "At 12 knots, we aren't about to switch that out for ocean, but we might consider it at a higher speed." But perishables that now ship by ocean, including other stone fruits, avocados, citrus, onions and garlic, will continue to move on the water. The biggest problem, Brown said, isn't distance or speed, but the reduction of port calls. "Some ship- pers are refusing to use carriers that have increased transship- ments," he said. "There is always the potential problem of missing a "ANYTHING THAT MIGHT HINDER MARKET GROWTH OR CURB ENTHUSIASM FOR OUR CHILLED MEAT ISN'T GOOD." By Stephanie Nall As carriers power down vessel speeds, perishables exporters worry about a slowdown of their own

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - Feb. 2014