Action Needed to Stop Carriers From Declining Export Bookings, Ag Officials Say
Port congestion and container issues are crippling U.S. exports of pork, dairy and other agricultural products, which could permanently lose ground to competitors in foreign markets if U.S. port problems aren’t quickly resolved, industry officials said. Speaking to a House Agriculture subcommittee this week, officials urged Congress to pass the Ocean Shipping Reform Act (see 2108100011) and do more to penalize carriers for leaving the U.S. with empty containers.
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“We need Congress to act, we need the Federal Maritime Commission to act, we need this Ocean Shipping Reform Act,” said Simon Vander Woude, a National Milk Producers Federation executive. “We need to think outside the box and do things we haven't done before.”
Some committee members agreed the government should do more to prevent carriers from sending empty containers back overseas rather than filling them with exports, a practice that allows carriers to profit off higher rates for imports (see 2104280031). Although several lawmakers endorsed the bipartisan Ocean Shipping Reform Act, which seeks to hold carriers accountable for unjustly declining export bookings, they also said the Biden administration should look for more immediate solutions.
“We have agricultural commodities sitting at the ports, paying fees to be staged there. So we need the administration to wake up,” Rep. Glenn Thompson, R-Pa., said during the Nov. 17 Livestock and Foreign Agriculture subcommittee meeting. “We need to be able to ship our commodities.”
Rep. Jim Costa, D-Calif., the subcommittee chair, said export bookings are especially difficult to secure at the ports of Los Angeles and Long Beach. “A lot of these products have a shelf life in terms of their perishable nature,” Costa said. “And the notion that they can simply wait is not acceptable.” But he also said he’s confident the administration will soon take more action. “Let me just assure you that in my conversations with the secretary of agriculture,” Costa said, “they are very acutely aware of the situation.”
Vander Woude said dairy exporters are experiencing “unpredictable access” to shipping containers, “many of which are being rushed back to Asia empty to restock imported items.” When containers are available, he said, exporters are facing “soaring” rates. “This volatility is wreaking havoc on our dairy exports and supply chains,” he said.
He also said dairy exporters have lost access to equipment due to continuous export cancellations. “We are the largest exporter of milk powders in the world and 60% of our loads got cancelled last month,” said Vander Woude, who is also the owner of Vander Woude Dairy in California.
Pork exporters are also facing losses from the “enormous backlog” at U.S. ports, said Jen Sorenson, president of the National Pork Producers Council. She said these slowdowns are hurting the trade relationships formed by U.S. pork producers. “Trading relationships take a long time to form and we want to deliver the product that has been ordered,” Sorenson said. “When we're shipping chilled pork, we do not want to have to freeze it down because of a backlog at the ports.”
The Federal Maritime Commission recently issued a series of long-awaited recommendations to address congestion issues in the international freight delivery system, including calling for “double reparations” for shippers that prove carriers imposed unfair fees (see 2107290021). But it’s unclear whether those measures will convince carriers to treat export and import bookings equally, even as nearly 300 agricultural groups and companies criticize what they say are unfair practices (see 2104280031).
“We all understand these are international carriers coming into our ports. we only have so much control over them,” Vander Woude said. “But let's exert any control we can to get our products on those ships headed back to the Middle East and headed back to those other countries.”