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'Ageing' infrastructure hurting US grain exports

'Ageing' infrastructure hurting US grain exports

Write: Weema [2011-05-20]

An "ageing" and underinvested logistical infrastructure is damaging US export prospects, a leading grain organisation has warned, as it was revealed that China is taking steps to boost imports from South America.

"Deficiencies" in America's export infrastructure have "started to become more apparent, and problematic", the US Grains Council, which promotes American crop exports, said.

"The question is, can our nation's transportation system move grain from farm to port with the speed and efficiency that today's international trade demands? The answer is rapidly becoming a glaring 'no'," the council said.

The comments came as the Colombia's president, Juan Manuel Santos, said that the country was in "advanced" talks with China over building a rail alternative to the Panama Canal.

The 220-km line between Colombia's Pacific and Atlantic coasts would be used to promote transport of Chinese goods to the Americas, and enhance shipments of raw materials in the opposite direction.

'Wake-up call'

However, a USGC meeting heard that the US was not even going to be able to exploit upgrades to the Panama Canal to accommodate 1,200-foot vessels, compared with a maximum of 965 feet today,

"Unless the US does a better job of maintaining its navigation channels?our channel dimensions will not keep pace with larger ships," Kurt Nagle, chief executive of the American Association of Port Authorities, which represents facilities in both North and South America, told the USGC session.

"[The US] will not realise the full advantage of the export opportunities the expanded Panama Canal will bring.

"A nation is judged by its infrastructure, and the US is getting worse by the year, if not the day," he added.

Ken Eriksen, senior vice president at analysis group Informa Economics, said the US needs a "wake-up call" on infrastructure, with its spending on logistical improvements below that of the likes of Brazil, Europe, Japan and Singapore on a per capita basis.

Rising silt

However, the call comes at a time of tight public budgets in the US. Indeed, President Barack Obama on Monday unveiled plans to cut Amerac's budget deficit by $1.1 trillion over a decade.

The Port of New Orleans warning last week that pilots guiding ships into the Mississippi river were, thanks to dredging worries, advising barges to go light and loads, and keep draft levels below the usual 45 feet.

The US Army Corps of Engineers, which maintains Mississippi channels, faces a cut of more than 25% to its dredging budget.

Bunge is building an export facility on America's west coast which the crop trader and processing says is the first of its kind in 25 years.