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Export Recovery

by Morgan Bell | Nov 01, 2016

The Journal of Commerce reported all of the major West Coast gateways generated year-over-year export gains in August. The U.S. intermodal rail network has sufficient capacity to handle any increase in export cargos that will be shipped to West Coast ports. West Coast export volumes posted on the Pacific Maritime Association's website also show a pickup in exports compared to last year. In July, the most recent month available, the PMA showed the strongest export volume since 2013. 

Asia is the largest destination for U.S. containerized exports. The peak season for exports in the westbound trans-Pacific begins in the fourth quarter of each year and continues into the second quarter of the subsequent year. Now that schools are back in session, large volumes of paper and used packaging materials will be recycled and shipped to Asia.

In a good-news/bad-news scenario for agricultural exporters, the U.S. will enjoy another large grain harvest this fall. The bumper crop of soybeans, wheat and other commodities will drive down export prices, which is bad for farmers. However, the lower sale prices will somewhat offset the strong dollar that continues to make U.S. exports more expensive in Asia.

The Hanjin Shipping's bankruptcy has removed an important carrier of agricultural exports from the upper Midwest to Asia. Exporters in the region that were regular Hanjin customers will start booking with other carriers, and railroads and terminal operators that are refusing to handle Hanjin containers will readily take cargo moving in the other carriers' containers. Reports of chassis and empathy container shortages have arisen in some locations, but the dollar is strong and the worst seems to be over. Exports will continue to build through next spring before going into the usual lull through the summer months. 

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