There will be an abundance of U.S. coarse grain and co-products available for export in the coming year. One way to get the grains from U.S. farms to worldwide customers is container shipping.

Benefits of Container Shipping

Containerization allows cargoes to be transferred directly from a ship onto a railcar or truck for quick transportation out of a port to a feed mill or other destination. This ease of transport is convenient for many buyers who need to ship their grains a long distance after it reaches the port.

Some buyers also enjoy the consistent quality of products shipped in containers. Because grains shipped via this method are minimally handled and stay separated in containers throughout the entire transport process, there are few occurrences of inappropriate blending and mixing.

“Buyers who want to purchase an identity-preserved commodity with less blending will often look to buy via container because containers come mostly from the interior of the United States,” said Jay O’Neil, senior agricultural economist for the International Grains Program at Kansas State University. “Containers, by and large, are shipped out of the countryside close to the areas of production.”

Considerations for Using Container Shipping

It is necessary to have the right infrastructure to handle containers. A buyer’s preferred shipping method will depend on his unique situation and needs.

“For buyers who need smaller quantities on a regular basis, containers become very attractive and convenient,” O’Neil said. “The buyers can get the U.S. commodities to their overseas destinations in quantities that suit their purposes.”

The logistics of shipping grain in containers tend to favor smaller quantities because of the cost of using multiple containers. Container shipping also tends to favor those places where grain needs to travel farther distances because it is relatively easy to move containers.

Rates Remain Low Due to Availability

In the upcoming marketing year, projected rates for container and dry bulk shipping remain low thanks to large fleets. Container shipping rate expectations this year dropped to a three-to-four year low.
“In general terms, shipping rates are in the lower range and attractive for buyers,” O’Neil said. “Container rates are lower than they’ve been in the last few years, and bulk dry shipping rates continue to be at historical lows.”