NEW YORK, Oct 22 (Reuters) - Food traders are switching from
containers back to dry bulk vessels to transport refined sugar
and rice, hoping to avoid shipping delays caused by container
shortages and port congestion that the industry is calling
"containergeddon", according to traders.
Container-based transportation has been hit by sky-high
costs and delays amid booming shipping demand, while container
terminals at ports struggle to deal with the flow.
Commodities such as refined sugar, coffee, rice, cotton and
cocoa have moved from dry bulk vessels to containers in the past
since the large boxes were more practical and offered good
quality control. But now shippers are moving back, at least
"Around 80% of the trade on refined sugar was done using
containers before the pandemic. This has now fallen to around
60%," said Paulo Roberto de Souza, Chief Executive of Alvean
Sugar SL, the world's largest sugar trader.
According to Souza, the change is only not bigger because
there are not a lot of small vessels available in the market.
Data from shipping agency Williams regarding port movement
in Brazil, the world's largest sugar exporter, shows that
volumes of refined sugar transported using containers fell 48%
in June and July (latest data available) compared to the
Bob Cymbala, owner at food trader A&J Global USA, based in
Vancouver, said that some clients are turning down offers due to
high prices for container freight, looking for shipping
One of his clients, a rice exporter in India, is looking to
use a dry bulk cargo to ship to Western Africa a volume of rice
equivalent to 10 full containers.
Coffee exporters are not considering a change away from
containers yet, besides the difficulties, mostly due to concerns
over quality. They say containers, with proper lining, better
preserve coffee characteristics such as smell and taste.
(Reporting by Marcelo Teixeira; Editing by David Gregorio)