Various Way of transport
Transportation costs account for a large portion of the cost of agricultural products delivered to the destination ports.
For exporting crops, products from various places need to be transported from processing plants to central railway stations in various states of the United States, and then containers are transported by train to ports on the east and west coasts of the United States.
Transport & Cost
The products are loaded onto barges from processing plants along the Mississippi River, transported down the river to the port of New Orleans, and then loaded onto bulk vessels and sold around the world.
The transportation cost of imported agricultural products before arriving at the destination port mainly includes two aspects:
(1) Transportation costs from the origin to the export port—Inland freight;
(2) The cost from the port in the United States to the port of the importing country—Ocean freight.
Ocean freight fee is mainly affected by global economic conditions and depends on supply and demand in the entire international shipping market as well.
From the 10-year trend data, there may be seasonal changes within a year, but from the overall trend, the freight rate is consistent with the international economic development. The overall economy is improving, international trade increases, the cargo quantity increases, and ocean shipping costs will naturally rise due to the increase in demand.
Due to the different geographical locations, the ocean freight rates from the PNW ports to the East China ports are lower than the rates from the U.S. Gulf ports to the East China ports. The main reason is that the ships from the Gulf of Mexico have to pass through the Panama Canal to enter the Pacific Ocean, and the sailing time is longer. Ships in the PNW ports directly enter the Pacific Ocean, which shows the advantage of distance.
Generally speaking, the freight rate of the PNW ports is slightly lower than that of the U.S. Gulf port. Therefore, when inland freight rates in PNW ports are higher than those in the U.S. Gulf, the overall transportation costs of crops in the PNW ports are still competitive to a certain extent.