Study Shows Shippers Active in Marketing

Containerization has evolved from an industry serving niche markets to an industry creating niche market opportunities.

The Upper Great Plains Transportation Institute, North Dakota State University and Transportation Marketing Services with the United States Department of Agriculture, recently published results of a survey of containerized grain and oilseed export businesses.

The survey suggests an established and growing U.S. shipper population is active in marketing containerized grains and oilseed products. Respondents reported they marketed an average 212 containers in 2002, a 25 percent increase in average annual volume compared to volumes they report for 2000. The businesses were located across 19 states (see map).

A majority of the containerized grain and oilseed export volume, 76 percent, is originated by shippers located within 350 miles of their primary container terminal.

Shippers report that premiums for containerized grain and oilseed products are approximately $5 per hundredweight, compared to the local bulk counterpart market. The net return to shippers is unknown as business practices and market fundamentals influence the costs associated with delivering the product to a customer overseas versus a local grain terminal or processor. Assuming market activity is positively correlated to profitability, the grain and oilseed container shippers would seem to be achieving acceptable levels of profit.

In aggregate, shippers reported grain and oilseed container exports that increased annually between 2000 and 2002. Shippers estimate that exports will increase another 20 percent by 2005.

Although many factors affect industry ability to realize this growth, shippers deem ocean freight rates as most crucial. Ocean liner routes/services, distance to container terminal, and foreign buyer information are also rated with above average importance. For more information on this research, download publication MPC 03-151 at www.mountain-plains.org.