Container, equipment shortages, software issues delay US beef imports

The timeline for US beef imports to arrive at domestic ports, cross through terminals and clear inspection is taking longer than anticipated due to slowdowns caused by multiple factors at various ports nationwide, according to US beef market participants.

A US-based beef buyer said Aug. 13 he received notice that two containers en route to the US were delayed by a month due a number of issues, including refrigerated container shortages, software malfunctions and overall equipment availability.

Additionally, market participants have continued to report delays at the Port of Houston due to the impact of Hurricane Beryl, which hit the Texas Gulf Coast in early July.

Despite these delays, prices have not been strongly impacted -- Platts, part of S&P Global Commodity Insights, last assessed CIF US 90CL beef at $2.82/lb, or $6,217 per metric ton, on Aug. 15, unchanged from the previous assessment day. Comparatively, Platts assessed the price 6 cents, or 2%, lower a month prior at $2.76/lb, or $6,093/t, on July 15.

Current shipment delays are rooted in a surplus of beef entering the US market from Australia due to large harvests of mature cattle, according to a transportation and shipping specialist. As the US dollar is doing well compared to other currencies, the US is the prime destination for beef. This, coupled with historically low US cattle herds, has created the "perfect storm" for shipping challenges, the specialist said.

Carriers have reported problems with electronic data interchange software that have delayed container status updates. Common issues include EDI software marking containers as "on hold," which means ports of entry are often not expecting the containers upon their arrival.

Additionally, Generator sets required to power refrigerated containers are also in short supply, the same specialist said. Delays at the Port of Houston may be attributed to the use of these generator sets to offset the effects of rolling brownouts.

As carriers continue to re-route around the Cape of Good Hope instead of transiting the Suez Canal, the extended transit times have added pressure to equipment availability and fleet capacity, tying up ships and equipment for longer voyages.

Furthermore, East and Gulf Coast ports saw early peak season volume upticks throughout the summer, as many shippers frontloaded cargo ahead of a potential labor interruption on Oct. 1, when the International Longshoreman's Association contract expires. If the two parties fail to reach an agreement before the existing contract expires, East and Gulf Coast ports could see an impactful work stoppage, further adding to any existing congestion.

The ILA, which operates in multiple major meat trade ports, may negotiate by slowing production before the contract expiration, multiple market sources have said, which could cause further delays in the import market.

These factors come together to create congestion at US ports of entry, further delaying trucks and US Department of Agriculture inspection services.

Amid the equipment hurdles and early peak season, Platts container rates for cargo from China into East Coast North America reached the highest levels since 2022 in July, peaking onJuly 1 at $10,200/FEU -- more than 350% higher on the year. Since then, prices have receded slightly, according to Commodity Insights data.

Refrigerated container rates typically trade at a premium to bulk container rates. The most recent indication for the cost to ship beef in a refrigerated container from Santos, Brazil, to Philadelphia was $170/t, or about 8 cents/lb.