Letter To The Honorable Ray Lahood, Secretary, Department Of Transportation

Conrad Calls on DOT to Address Container Shortage

Senator Kent Conrad today urged the U.S. Transportation Secretary toaddress serious challenges that are impeding North Dakota exporters' ability to ship goods to the global market. In a letter to SecretaryRay LaHood, Senator Conrad warns that exporters in North Dakota and other rural areas in the Midwest are being disproportionately impacted by the lack of service.

"This situation is simply unacceptable. If our exporters are to remain competitive, they must be able to rely on the transportation network to get their products to markets, and that network must not unduly penalize those who are in rural areas," Senator Conrad said.

Senator Conrad is concerned about reports that producers in North Dakota and other rural areas have been unable to access containers needed to ship their products overseas. When containers are available, prices per container are often 50 percent higher than those at other inland areas, making it prohibitively expensive to ship products.

Many exporters have resorted to trucking containers hundreds of miles, at considerable expense, just in order to obtain equipment to ship products to overseas markets. These costs are ultimately passed on to the producer, which leads to lost export opportunities and overseas customers because they cannot remain competitive in the global marketplace.

"Producers tell me they have lost business when customers can't get timely delivery of products or they have been priced out of the market. Allbecause they can't get containers to ship commodities to market. This is a serious issue that threatens North Dakota's economic competitiveness," Senator Conrad said.

Below is Senator Conrad's letter to LaHood.

The Honorable Raymond H. LaHood
Secretary
US Department of Transportation
West Building, 1200 New Jersey Avenue, SE
9th Floor
Washington, DC 20590-9898

Dear Mr. Secretary:

I write to follow-up on our conversation in Bismarck, North Dakota, regarding shippers in the upper Midwest being negatively impacted by the lack of competition. I ask that you work to address the serious transportation impediments that exist to international trade that is hurting our rural exporters.

As we discussed, rural exporters in my state and other areas in the Midwest are being disproportionately impacted by the lack of service. Producers are not getting access to the containers needed to ship their products overseas. Carrier bookings have become worthless as many exporters are left without containers to ship their products, despite contract stipulations that containers will be available. More often than not, shippers will book containers, but truckers will arrive at the rail intermodal ramp only to discover that no containers are available, forcing sometimes long waits to access the needed equipment. These problems have magnified in recent years as carriers cut capacity and consolidated equipment to a few key inland areas.

When containers are available, prices per container are often 50 percent higher than those at other inland areas, making it prohibitively expensive to ship products. For example, rates per container are $750 higher from Minneapolis than if the container is shipped from Chicago to an overseas Asia port. Many exporters have resorted to trucking containers hundreds of miles, at considerable expense, just in order to obtain equipment to ship products to overseas markets. These costs are ultimately passed on to the producer, which leads to lost export opportunities and overseas customers because they cannot remain competitive in the global marketplace.

This situation is simply unacceptable and it must be addressed. If our exporters are to remain competitive, they must be able to rely on the transportation network to get their products to markets, and that network must not unduly penalize those who are in rural areas. It would appear that this is both an issue for steamship line carriers and intermodal railroad service. Finding a solution, however, is of vital economic importance to my state.

I appreciate your attention to this important issue for my state.

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