Peter Stewart, PortandTerminal.com, January 22, 2019
Hamburg, Germany Jan. 22, 2019 – Grain is usually shipped as bulk cargo in ships like the one shown in the photo
How much grain is being shipped in containers?
In 2016, 7% of American grain was exported in shipping containers. That may not sound like much, but it
Grain exporters in America are not alone. Analysts estimate that between 12 to 15 % of Australia’s grain exports are also now shipped in containers to Asia.
The same story holds true in Canada, another major grain exporting country. Statistics collected by the Canadian Grain Commission show the amount of containerized grain shipped through ports at Montreal and Vancouver (Canada’s main export ports for grain) nearly tripled to 3.87 million tonnes last year from 1.38 million tonnes in 2001.
What’s driving the growth in containerized shipments of grain?
The global transport of agricultural commodities traditionally has taken place on vessels filled with 60,000 to 70,000 tonnes of a single cargo like corn or sugar.
Some food importers in Asia though are switching from dry bulk cargo ships to container vessels, which normally carry goods like toys, TVs and a million other things we all buy at Walmart, America’s #1 importer of containerized goods from China.
The bottom line is that China exports more to the United States in containers than vice-versa. Which leaves a lot of containers lying about in America that need to get home.
Shipping costs reflect this. It’s 77% cheaper to ship a container to China than it is from it.
Market dynamics of bulk versus container freight rates also come into play as well. Back in the mid-2000s when bulk vessel freight rates took off, it was cheaper to ship grain to
Part of choosing to ship grain via container has to do with scale – the inventory requirements of a small end-user processing facility are not the same as a large one, and small bulk shipments fit the bill.
“Bulk grain handling has changed very little in the past 150 years, since we gave up on burlap sacks. Containerization is a new supply chain based on ‘steel sacks.’”Barry Prentice , University of Manitoba
“With containers it’s different. A farmer can theoretically sell 100 tonnes of grain on eBay and ship it to China.” Jan Tiedemann, a shipping analyst with consultancy Alphaliner.
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