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Hapag-Lloyd hit for leaving boxed soybean shippers in lurch

MINNESOTA's Specialty Soya and Grains Alliance (SSGA) was shocked when German shipping giant Hapag-Lloyd dropped its cheap backhaul beans shippers for higher returns elsewhere, reports the American Journal of Transportation

27 October 2020 - 19:00

MINNESOTA's Specialty Soya and Grains Alliance (SSGA) was shocked when German shipping giant Hapag-Lloyd dropped its cheap backhaul beans shippers for higher returns elsewhere, reports the American Journal of Transportation.

'Hapag-Lloyd has been one of the most reliable and dependable carriers for rural, inland ag shippers, so this announcement is devastating,' said North Dakota's SB&B Foods president Bob Sinner.



'We are just coming off a harvest that our overseas food manufacturing customers are anxious and desperate to begin receiving,' said Mr Sinners, who is also an SSGA official.



Hapag-Lloyd informed exporters it is suspending overseas ag container shipments from North America, a decision that could cause major hardships within the entire US agricultural sector, he said.



The decision is being driven by hard economics during a time of unprecedented demand for higher-value North American consumer imports by containers from Asia at premium prices.



Reports to SSGA are that Hapag-Lloyd has decided it needs to quickly reposition empties back to Asian shipping centres, even if it means abandoning food and agriculture produce.



SSGA members in the upper Midwest, including shippers of bulk and identity-preserved (IP) soybeans and specialty grains, note the decision will especially hurt exporters in the Minneapolis-St Paul region.



The strong Twin Cities market frequently finds itself short of inbound containers to meet demand and has long relied on Hapag-Lloyd's services to reposition containers for exports.



Hapag-Lloyd delivered 878 shipments of US bulk soybeans at a volume of more than 17,000 TEU between October 22, 2019 and September 25, 2020 to destinations around the world.



The majority went to Japan, Indonesia, Hong Kong, Taiwan and Malaysia, as well as to Thailand and South Korea. Over that same span there have been 172 shipments of IP non-GMO food-grade specialty soybeans at a volume of 780 TEU.



'This disrupts the food supply chain,' Mr Sinner said, noting that consumption of soy foods has been strong throughout the Covid crisis and that worldwide food inventories are low.



'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 as soon as possible.'



The move by Hapag-Lloyd poses an ominous sign for US agricultural exporters if other ocean carriers decide to follow suit or delay shipments.


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