Lumber shipper ‘begging’ for capacity

   Ocean capacity for export lumber shippers is tight these days, according to Curtis Struyk, president of Carolina Ocean Lines and a founder of the U.S. Lumber Shippers Association.
   Speaking on a panel about U.S. export expansion at the Virginia Maritime Association’s International Trade Symposium Thursday, Struyk said he has to scrounge for capacity aboard vessels and can’t see why lines won’t serve his business.
   “I understand that repositioning containers for lumber shippers is not always economically viable, but we have exports ready to go,” he said. “I ship 1,000 TEUs a week, every month, and I can’t get space sometimes. I have to beg, borrow, and steal for it every day. It doesn’t matter who it’s with. It’s everybody. I’m leaving money on the table and containers on the dock.”
   Struyk said lumber shippers regularly face severe swings in capacity.
   “We have a much tougher time than we did six months ago,” he said. “Now I call five carriers and I’m lucky if I get two or three containers booked. I’m not quite at the bottom of the totem pole, but I’m just above wastepaper and scrap metal. I go from the being the red-headed stepchild to their best buddies.”
   Steep fluctuations in rates also cause consternation among Struyk’s customers.
   “It’s not the rates, but the changes to the rates,” he said. “The constant change is what’s killing us. Six months ago, I had $700 rates all-water to Asia and now it’s up to nearly $1,300. But I’m not shipping any more containers at $700 than at $1,300.”
   He said his export business stops being viable when rates go to $1,500 per FEU.
   “Rates always win out, but all else being equal, it’s who offers the path of least resistance,” Struyk said when asked how carrier service levels affect his decisions.
   Struyk said he’s seen a 180-degree turn in the ratio of exports to domestic business as a result of the housing bust.
   “Lumber producers used to do 70 percent domestic and 30 percent export, but now it’s 70 percent export and 30 percent domestic,” he said.
   And he commeneded carriers for raising rates in a more digestible manner this year.
   “Rates have been trending up, but they didn’t try to get it all at one time,” he said. “We’re seeing $100 increases, or $150 increases, as opposed to $400 increases in 2010. It’s a little easier to swallow.”
   Struyk also bemoaned the state of service contracts, especially as carriers apply rate increases to approved contracts.
   “I had a customer say ‘I thought you had a service contract,’” he said. “I told them, ‘well I do, but they can change the rate.’ And he said, “then what the hell good is it?’”
   The symposium, held in Norfolk, was co-sponsored by American Shipper. – Eric Johnson