An unexpected effect of the downturn in the construction industry has been a shortage of cargo containers for Irish exporters.

Chief executive of the Irish Exporters Association (IEA) John Whelan said that this was a new obstacle that the Irish economy had never faced before.

“It’s something that is new to the Irish market. If you go back over the decades we always had a surplus of containers from our imports available to exporters. It’s a new phenomenon.”

“We are in a situation now where shipping lines to service Irish industry are having to import empty containers into Ireland,” added Mr Whelan.

In a functioning economy, cargo containers enter the port laden with import goods, which are unloaded. Indigenous goods are then loaded into the containers and exported.

There has been a large decline in imports into Ireland, while the export sector has returned to growth after a marginal decline in 2009.

In 2007, Ireland had 369,000 empty containers as a result of imports of building materials and large volume/low value imports from Asia. That figure had fallen to 207,000 by the end of 2010 and has continued to fall this year.

This has led to a situation where shipping lines are having to import empty containers to Ireland to service the demand.

Fine Gael TD David Stanton raised the issue with Foreign Affairs and Trade Minister Eamon Gilmore in a parliamentary question. Mr Stanton had been informed by a constituent that a shortage of shipping containers was hindering the growth of her business.

“Minister Gilmore said that the issue had never been raised with his department before. After consultation with stakeholders, Minister Gilmore acknowledged that there was a problem but ruled out any Government intervention.

He said: “I am advised that a resolution of any continuing difficulty in this area is essentially a matter for the shipping companies active in the market.”

The IEA is working with the Irish Marine Development Office to try and come up with a solution. The IEA said smaller Irish producers are being hit hardest by the shortage.

According to Mr Whelan: “The large multinationals, who typically would have large multi-year contracts and would be signing up volumes out of multiple locations in a single contract, are not being affected.

“The smaller, indigenous exporters who are seeking one-off container shipments to markets are being impacted. While it is not causing any loss of sale, they are finding it harder to get the best rate.

“They are also finding it harder to get the container when they need it.

“We are continuing to look at the situation to see what solutions can be arrived at. It is reaching a fairly critical point.”

Case study Bord Na Móna

IRISH peat moss is one of the biggest exports to Italy. Bord Na Móna has grown the market by 20% year on year.

It would be a real success story if it wasn’t for the shortage of containers which threatens to destroy the profits of the high-volume, low-margin trade in peat moss. A Bord na Mona spokesperson said: “The challenge of trying to source containers has become a real struggle for us. The reason being is that the number of containers coming back out of Italy is down. There is virtually nothing coming back out of Italy into Ireland.

“Historically, we used to work on the back of the construction business, tiles in particular. Of course that has disappeared. We used to load in Ireland, send it to Italy and then they would load it with construction materials and send it back to Ireland.”

“We have a problem sourcing them here because the shipping lines want to fill them on the way back or, alternatively, they can give them to you and double the price. Obviously, this is a high-volume, low-margin business.”

The shortage of container traffic into Ireland means that Bord na Móna is having to examine the export viability of its product.