Shipping Issues for US Ag Exporters Becoming 'More Dire,' Trade Groups Say
Despite recent steps by the White House and the Federal Maritime Commission to address supply chain issues hampering agricultural exporters, the problems are worsening, trade groups said this week. Carriers are increasingly declining or canceling export bookings, ship delays are backlogging orders by months and agricultural exporters are seeing steep drops in revenue due to continually rising container costs, 76 trade associations said.
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While the groups said they are “grateful” for the White House’s (see 2107090056) July executive order and the FMC’s recently issued recommendations to address freight delivery issues, U.S. exporters have yet to feel relief. “[D]espite these positive steps, the problem not only persists,” the groups said in a Sept. 13 letter to President Joe Biden, “but is becoming even more dire.”
They said ocean carriers are continuing to refuse to carry U.S. agricultural exports because the carriers can charge higher rates for imports, a trend that has sparked outrage among U.S. trade groups for months (see 2104280031 and 2103050014). Exporters are also experiencing “frequent ship delays and cancellations with little or no notice,” which has led to lost sales and a reduced U.S. market presence in other countries since the start of the COVID-19 pandemic.
“The resulting inability of shippers to deliver their products on schedule affects the reliability of American exports, and subsequently decreases export values and market share,” the groups said, adding that the cost to ship a container has increased 300% to 500% in the past two years. The letter said U.S. agricultural exports are losing 10% to 40% of their export value to those added costs.
The groups lauded the FMC’s July recommendations to expand its authorities to address the issues. FMC Commissioner Rebecca Dye said the commission should ask Congress to revise several shipping statutes, allowing the FMC to authorize “double reparations” for shippers that successfully show that a carrier or marine terminal operator violated detention and demurrage rules (see 2011200024) and provide “restitution” to parties injured by a shipping violation. But those ideas are just recommendations, the groups said.
“Regulatory action and enforcement steps take time to be implemented, and while those important processes need to move ahead, we call on you and your administration to take effective steps to gain immediate relief,” the letter said. “Recognizing that relief may be incremental, it must begin very soon.”
The White House should support legislation that seeks to address unfair practices that hurt U.S. exporters, the groups said, including the bipartisan Ocean Shipping Reform Act, which could hold ocean carriers more accountable for unfairly declined bookings (see 2108100011). It should also order the Justice Department to review shipping regulations to determine if it can more actively enforce those laws, establish an interagency working group focused on agricultural exports and sponsor initiatives to increase the speed of operations at U.S. ports and terminals and among carriers and shippers. The letter also includes several other recommendations for the White House, asking it to provide support to ports to help deploy a national data-sharing portal, increase coordination between the FMC and the Surface Transportation Board and provide more support and resources to the FMC.
The groups said it is “vital to the American economic recovery that additional steps be taken to relieve the crisis facing American exports.” The White House didn’t comment.