The Shipping Container Shortage: A Trade Barrier
A shortage of shipping containers sounds like a problem for electronics. It is just as much a problem for cheese, butter and powder waiting at the dock.
What is the container problem?
Most traded goods move in standard steel containers. When containers are in the wrong place, delayed in port or in short supply, exporters cannot get them when they need them. Rates can rise, bookings can be canceled and schedules can slip.
The headline refers to a shortage as a trade barrier, and details on timing and severity should be checked with sources like the U.S. International Trade Commission and the Foreign Agricultural Service. We describe how it works, not how bad it is.
The shortage can also hit the other direction. Empty containers that should return to exporters get stuck overseas, which makes it harder to load product at home. That imbalance is part of why exporters in inland states like Texas sometimes struggle to find boxes at the right inland terminal.
Why is dairy affected differently?
Many dairy products need refrigerated containers, called reefers, which are fewer than dry boxes and need power at the port and on the ship. Shelf life is also a constraint: a delay that is annoying for canned goods may be costly for fresh or aged cheese.
Powders and some butter products travel in dry containers and handle delays better, but they still need clean, dry, properly sealed boxes.
Packaging matters too. Proper pallet loading, temperature recorders and sturdy cartons reduce the chance that a delayed shipment becomes a damaged one. Ask your buyer what monitoring they expect. Ask your forwarder about the cold chain monitoring they offer.
- Refrigerated containers are limited
- Shelf life makes delays costly
- Dry products handle delays better
How do you work with a forwarder?
A freight forwarder is an expert who books space, prepares documents and tracks shipments. Choose one with dairy experience. Ask what they do when containers are short, how they handle delays and how they communicate. Find out whether they charge detention or demurrage fees when a container sits.
The U.S. Customs and Border Protection describes export documentation requirements. Make sure your paperwork is accurate before the container arrives so it does not wait for corrections.
Get quotes from more than one forwarder if you can, and compare not only the freight rate but also what happens in a delay. The cheapest quote can turn costly if the forwarder has little pull with carriers.
What can an exporter do?
Book early and give the forwarder realistic estimates. Consider flexible ship dates, alternative ports and contract terms that share the risk of delay. Talk to your customer about what happens if a shipment arrives late. Insurance can protect against some losses, so ask about coverage.
Texas exporters may ship through Gulf ports, West Coast ports or by rail and truck to Mexico and Canada, depending on the market. The International Trade Administration offers guidance on logistics. Our dairy guide covers quality, which matters more when transit takes longer.
Keep a backup plan, such as an alternate port or a different carrier, and decide in advance who can authorize a change. Time spent searching for a signature during a delay is time your product spends warming up.
What does it cost, and who pays?
Container costs can swing widely. In a contract, the agreed delivery term decides who pays for freight and who bears the risk during transit. If you do not understand the terms, ask an attorney or your forwarder to explain them before you sign.
Build a cushion into your price quotes or contracts, and keep your cash flow plan realistic. The farm money guide explains how delays can strain working capital. A small buffer in your pricing is cheaper than an argument after a late shipment.
Where can you read more?
The container shortage has inspired its share of jokes, and the satire page at farm.FM has been known to take aim at shipping delays. For serious coverage, try the economics section and a farm.FM story about shipping containers.
The U.S. Dairy Export Council also provides logistics information. Our site is independent and the agencies have the facts. If you need a refresher on the term, the Economic Research Service also explains how supply chain trouble moves through agricultural markets.
Sources and further reading
- U.S. International Trade Commission: tariff and trade data
- USDA Foreign Agricultural Service: export markets and trade data
- U.S. Customs and Border Protection: import and export rules
- International Trade Administration: export help for U.S. businesses
- U.S. Dairy Export Council: dairy exports
- Texas Department of Agriculture: state agriculture agency
Ask locally: Ask a freight forwarder with dairy experience and your trade association's logistics staff how to plan around shortages.