SSGA taking steps with competitive shipping

By Bruce Abbe, SSGA strategic advisor for trade and transportation

As noted in previous editions of Member News Update, Specialty Soya and Grains Alliance’s (SSGA) structure provides that we will have action teams of members whose role is to recommend strategies for our organization to push for expanded intermodal and more competitive shipping options for our members nationwide. Initial steps have gotten underway to form SSGA’s Competitive Shipping action team.

An initial steering committee met Aug. 13 in Bloomington, Minn. to brainstorm next steps to form and activate this vital function for SSGA. Despite “Shipping” no longer being in the title of SSGA (as it was in the Midwest Shippers Association), advocating for more competitive global shipping for ag exporters remains every bit a priority for SSGA now as in the past.

Shipping action team members include: veteran John Andrusko, founder of Professional Export Services, Inc.; Lynn Vorvick, general manager of Globe Runners, Inc., a national Non Vessel Owning Common Carrier (NVOCC); SSGA board members Bob Sinner, president of SB&B Foods; Darwin Rader, international marketing manager for Zeeland Farm Services; SSGA Executive Director Eric Wenberg and SSGA Strategic Advisor Bruce Abbe.

Next Steps – Member Survey Coming
A survey will soon be going out to all of SSGA’s member to gather a more detailed picture about SSGA member’s global-to-local shipping patterns, and most importantly, to hear about issues in transportation you are experiencing and recommendations and ideas you may have for SSGA. While intermodal container shipping will likely remain the key focus of SSGA’s efforts, intermodal by its very nature encompasses ocean, rail and trucking/drayage issues.

We will want to learn about the ports both in the U.S. and overseas destinations our members ship to, markets our members serve, railroads most commonly used, how trucking issues are affecting you, any new markets and trade lanes you see yourself serving in the future. We hope to hear about any new intermodal developments or prospects you are aware of. We want to hear your recommendations about what SSGA should tackle for our organization and members that we can realistically do and provide that will be valuable to you.

Larger Action Team
A larger Competitive Shipping action team will eventually be formed with regular conference call meetings, and likely special group initiatives as the group and board determine. SSGA wants highly-informed member representatives on this group – people who deal with shipping every day, and will provide experience and knowledge about the impact of new issues we face that seem to develop every week now.

What we’ve heard so far

Here’s a brief rundown of some issues we’ve heard from members on so far:

• Trucking weight limits, particularly uneven limits among states for longer hauls, is a long term challenge. Some states have higher weight corridors or limits on state roads.
• Rail heavy weight surcharges, primarily a Union Pacific issue that cropped up last year, is a newer issue that may need attention, especially if other railroads move to adopt. UP has done some refinements, but ocean carriers are including those surcharges on customer bills now.
• The International Maritime Organization (IMO) 2020 fuel cost hikes are coming, mandating the steamship lines either move to low sulfur fuel or take ships out of rotation and install scrubbers. Jan. 1, 2020 is the mandate requirement globally now. Shippers want to see what the price increases are in actuality. That may differ by location, depending upon availability of the fuel. The cost hikes, many believe, should not be determined by pure market forces – i.e., the Walmarts able to bargain for lower fuel hikes compared to small shippers. Can the Federal Maritime Commission be pushed to mandate carriers provide advisements to shippers on costs or availability? It seems information on how IMO will be handled is just now starting to trickle out from the carriers, and the industry is running behind on getting cued up.
• Rail service inconsistency in departure times is another issue SSGA has been tracking. In smaller intermodal hubs like Minneapolis, Omaha, St. Louis and Denver, the trains don’t leave until the railroad has a complete full unit train of container cars. In bigger hubs like Chicago and Kansas City, they’ll leave as soon as the train is full. But the discrepancy in departures can mean some shippers might miss a cut-off time for the ship at the ports. That could mean your freight sits at the port for another week until the next departure to your destination, with detention fees a possibility.
• Drayage availability – there are more intermodal trucking firms leaving the business. Among those in the business, some are no longer willing to haul more than 38,500 pounds in a 20-foot container, some 3,000 pounds less than they could haul. Having enough drayage trucking service may become the number one issue for ag shippers in the coming years.
• Steamship line customer service has been a complaint over the past four years or more. The growth of e-commerce and digitalization of business transactions has brought along an ever-widening hole in customer service. Carriers promote online interaction to resolve problems, but the reality is, very rarely are these online requests addressed in a timely manner or to the satisfaction of the shippers/forwarder. A call is typically needed to reach someone at the steamship line, and the person who answers the call often is not knowledgeable or in position to get the issue solved.
• The deteriorating quality of containers for ag, food and feed shippers, remains a problem. One positive step on that issue – we learned at the Ocean Container Shipping Panel session at the Global Trade Exchange & Specialty Grains Conference in Chicago that Ocean Network Express (ONE), the new combined carrier made up of the three previous, large Japanese carriers, now has acquired or is acquiring all new containers. They’re the only one, and will set the mark most likely for better quality equipment for some time.

Those are examples of the issues this action team wants to learn about from members. We want to consider ways as a group we can advocate for changes to improve competitive shipping from the inland U.S. to global markets.

Your Input
Most importantly, please note SSGA wants to hear from all of our members about transportation issues and developments you are facing. As a member, you are encouraged to contact SSGA. On shipping matters, contact Bruce Abbe, who serves as the staff lead on transportation – bruce@abbecommunications.com or call him at (612) 716-5074.