inland Port Dillon (copy)

A transporter of agricultural products is building an export site near the State Ports Authority's inland port in Dillon (above). File/Provided/State Ports Authority

The State Ports Authority expects a new distribution site in the Pee Dee region will increase the amount of agricultural goods sent overseas from Charleston, even as such exports nationally are coming under pressure from global shipping trends.

Minneapolis-based Northwest Grains International said it will build a $2.5 million transload site adjacent to the SPA's inland port in Dillon, where crops will be transferred from trucks to containers and sent on CSX freight trains to Charleston to be shipped to China and other markets.

The Carolinas-grown commodities that will be sent through the facility include soybeans, peanuts, cotton, cotton seed and yellow peas. The Dillon site along Interstate 95 will open in time for soybean season this October and will employ as many as 10 workers.

"Agricultural exports are an area where we need to grow significantly," said Jim Newsome, the SPA's president and CEO.

He added that demand from overseas customers coupled with the size of the market could propel agricultural exports past plastic resins, which account for about 50,000 20-foot shipping containers per year.

Wando Welch Terminal containers (copy)

Exporters of agricultural goods in some parts of the U.S. are complaining that shipping lines are sending empty cargo containers back to Asia instead of filling them with farm goods. File/State Ports Authority/Provided

Northwest Grains is expected to ship about 1,000 cargo boxes annually from the Pee Dee site, which opened in 2018 to give companies along the I-95 corridor quick access to the Charleston waterfront.

At least one other company is opening a Carolinas transload facility to help farmers get their crops overseas. Omaha, Neb.-based Scoular announced a partnership in January with the Port of Wilmington to export North Carolina-grown soybeans from that site.

Micah Mallace, the SPA's vice president of sales and marketing, said Northwest Grains will provide an export alternative to North Carolina and South Carolina growers who've traditionally had to rely on domestic sales. Farmers in the interior U.S. have said that crushing import boom has made that side of the business more challenging.

At a hearing in Washington, D.C., on July 15, maritime experts said shipping lines are leaving agricultural exports behind so they can instead send empty shipping containers back to Asia.

The pandemic-driven boom in imports of consumer goods to the U.S. has left an Asian manufacturer with a shortage of the steel cargo boxes needed to send their products overseas. So, instead of sending an empty container to the Midwest so it can be loaded with crops, shipping lines are taking those containers to Asia where they can make more money.

Shipping lines are getting as much as $12,000 per box for Asian exports compared to $800 in freight charges for U.S. agricultural exports, Alexis Jacobson, accounts manager for BOSSCO Trading, told a U.S. House Transportation and Infrastructure subcommittee.

"Too often, U.S. agriculture and forest products are left stranded here in the U.S., unable to be delivered to foreign markets," she said, adding U.S. exporters are reporting, on average, a loss of 22 percent in sales. "They choose to cancel or deny (agricultural) export bookings to favor those empty containers away from the United States."

Pre-pandemic, typically 65 percent of containers on a ship from the U.S. to Asia were loaded. That number is now 50 percent or less, Jacobson said.

"There is some truth that ocean carriers will carry fewer containers of American exports than they otherwise would have in order to get empty containers more rapidly back to Asian ports to fill with higher-value import loads," Daniel B. Maffei, chairman of the Federal Maritime Commission, told the subcommittee.

John Butler, CEO of the World Shipping Council, said data doesn't back up the agricultural exporters' claims. He told the subcommittee that U.S. shipments of soybeans, corn, tree nuts, beef, wheat and chicken are at record levels and the large numbers of empty containers moving back to Asia is a reaction to trade imbalances.

"When overall U.S. import volume surges and overall U.S. export volume remains relatively flat — as has been the case since mid-2020 — this results in an increase of empty containers in the U.S. that need to be repositioned to overseas locations to be filled with U.S. import cargo." If that didn't happen, he said, "U.S. importers would not be able to meet the demands of U.S. businesses and consumers that purchase those imported products."

There is no shortage of empty containers at the Port of Charleston port — Newsome said about 10,000 were available at the Wando Welch Terminal earlier this week — but the demand for imports means shipping lines no longer want to wait for those boxes to move to the Midwest and back for farm exports that don't pay as well.

"I understand what the shipping lines are doing — they need the boxes back in Asia," Newsome said. "Someone told me today about freight rates of $15,000 (per container) from Asia to the U.S. Who's going to turn that down?"

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Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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