Food-grade container shortages hitting Victorian exporters hard

The Australian Dairy Products Federation executive director Janine Waller said the shortage of containers, on the back of drought, bushfires and COVID-19, was another supply challenge facing agriculture.

"For the dairy industry, we understand products are delayed by about a month, meaning the industry is in a state of constant catch-up," Ms Waller said.

The consequences were felt across the supply chain - right down to the consumer.

"Sales are impacted by around 10-15 per cent; alternate modes of transport are being sought at higher costs to the processor - such as air freight - itself with its challenges," she said.

"Australia does dairy well and government support to help share our world-class products during a time of transport disruption, is welcome."

Many exporters switched to shipping products by sea, after the air freight trade collapsed, due to COVID-19.

Pulse exports have also been affected, with one Winchelsea, Vic, based packer, Southern Grain Storage, saying the shortages have blown out its export program.

Southern Grain Storage director Campbell Brumby said the business currently had thousands of tonnes of faba beans, it hoped to export by the end of May.

"The shipping lines are struggling to keep up with the quantities of food-grade containers, we would normally have access to," Mr Brumby said.

"They are upgrading the general-purpose containers and doing their best to make sure they fit our export requirements.

"We haven't had to reject a container yet, so despite them being a bit rougher looking, on the exterior, to date we haven't had any issues."

Exporters needed to ensure there would be no leakages of dust or water, which could damage the shipped products.

"We use about 500-600 containers, over the next couple of months, carrying about 14,000-15,000 tonnes of beans," he said.

Beans would mainly go to Egypt but also south-east Asia and Bangladesh.

"There is demand within China, where exporters are trying to catch up with their export program," he said.

"They have a backlog of exports.

"The COVID shutdown last year meant there were products they were manufacturing, or needed to be shipped, that couldn't be."

Some shipping lines were sending Chinese-owned containers back empty to meet that demand.

"It works out better, financially, for them to ship them back more quickly, empty, to keep their program going, rather than having the time lag of having those containers filled and work their way through the rest of the world," he said.

Mr Brumby said the company had sought clarity, from the shipping lines, as to when the shortage might end.

"We can't ship the products as quickly as we would have hoped," he said.

"It'll work it's way through, towards the second half of the year.

"But, for our purposes, we need to have that product shipped sooner."

Wimpak Export Trading Group's Nikita Tremble said there was a significant shortage of food-grade containers for the Australian grains export market.

"This has been due to various factors, including, a higher level of exports to imports and highly congested COVID-19 affected trans-shipment ports causing delays moving containers around the globe," Ms Tremble said.

The Minyip, Vic, based company exports pulses and grains, as well as supplying the domestic market.

The shortages made planning at Wimpak a challenge.

"Many containers are arriving on site close to cut-off, requiring immediate turnaround to meet vessels, which is not always possible."

Drewry World Container Index Container Equipment and Leasing Research head John Fossey said empty containers were not being repositioned as quickly as before, due to demand.

"I know containers have been piling up in some ports and in depots across the country, as a result of the surge in the import of consumer durable items in the second half of 2020," Mr Fossey said.

"This has led to empty containers getting held up and not repositioned as quickly as before to areas of demand.

"Consequently, the availability of all containers, but particularly dry freight containers, has tightened."

He said foodstuffs were carried in both dry and reefer (refrigerated) boxes, depending on whether temperature control was needed.

"It seems that reefers have faced fewer availability problems thus far, although there have been a few incidents where some fruit exporters in the southern hemisphere have switched to using specialised reefer tonnage," he said.

"The cycle times of reefers have also been impacted by the Chinese authorities checking cargoes to ensure there is no trace of coronavirus.

"This has led to thousands of reefer containers being delayed in ports in China."

He said ocean carriers needed to get empty boxes back to Asia, as quickly as possible, and were not positioning them to take return cargoes.

"This is particularly the case if the containers have to be repositioned long distances from the point of discharge and when freight rates in back haul trades are generally lower/less remunerative," Mr Fossey said.

"This practice has certainly affected grain/soybean/pulse exports out of China and some sugar out of Brazil."

Port of Melbourne stakeholder adviser Linda Allison said the organisation was aware of a nation-wide shortages of containers.

"PoM has been working closely with key grain shippers and freight forwarders in using 40 foot food-grade containers and have seen significant uptake on utilisation," Ms Allison said.

'We are working closely with the wider grain industry to enhance supply chain innovation."

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