Cash Market Moves

Since early October, shipments of agricultural products by containers were discontinued by the major shipping line Hapag-Lloyd, a German international shipping and transportation company. I wrote a column highlighting the hardships this would cause for shippers, and since then, not much has improved. Read that article here: https://www.dtnpf.com/….

Many agricultural exporters have requested official action from the Federal Maritime Commission (FMC) to investigate denied and canceled container bookings among other serious issues still causing them difficulties to ship ag commodities. In response to letters from the agricultural export community and USDA, FMC expanded its investigation into whether carriers in alliances that call on the ports of Long Beach, Los Angeles, New York and/or New Jersey are violating federal regulations, USDA noted in its Dec. 3 Grain Transportation Report. Practices under investigation for possible violations concern demurrage and detention, container return, container availability for U.S. export cargoes and other related problems.

On Nov. 19, the FMC approved a supplemental order that expands the authority of Fact Finding 29, "International Ocean Transportation Supply Chain Engagement." The supplemental order authorizes Commissioner Rebecca F. Dye, as the designated fact-finding officer, to investigate ocean carriers operating in alliances and calling the Port of Long Beach, the Port of Los Angeles or the Port of New York and New Jersey. The expanded commission investigation will seek to determine if the policies and practices of those shipping companies related to detention and demurrage, container return and container availability for U.S. export cargoes violate 46 U.S.C. 41102(c). https://www.fmc.gov/…

In a news release on Nov. 20, Commissioner Dye made the following statement in response to the commission's supplemental order: "The time has come to resolve the most serious impediments to port performance. I'd like to thank my fellow commissioners for their support of the supplemental order for Fact Finding 29, as I focus the investigation on the extreme conditions in the Ports of Los Angeles, Long Beach and New York/New Jersey. The Order emphasizes I, as Fact-Finding Officer, have all enforcement options at my disposal to address the crisis that exists in our major port gateways.

"The commission has a compelling responsibility to investigate the situations that currently exist in our major port gateways. The commission is concerned that certain practices of ocean carriers and their marine terminals may be amplifying the negative effect of bottlenecks at these ports and may be contrary to provisions in the Shipping Act of 1984. The potentially unreasonable practices of carriers and marine terminals regarding container return, export containers, and demurrage and detention charges in the Ports of Los Angeles, Long Beach and New York/New Jersey present a serious risk to the ability of the United States to handle trade growth."

The Specialty Soya and Grains Alliance (SSGA) applauded the FMC's decision to expand its fact-finding authority and investigate ocean carrier and marine terminal practices that are leading to delays and other hardships. SSGA also congratulated and thanked the Agriculture Transportation Coalition (AgTC) and its members in efforts to brief commissioners, members of Congress and other officials in federal and state government about practices that are greatly hindering the timely export of agricultural products, especially from rural and inland suppliers in the upper Midwest.

SSGA joined AgTC in calling for a "prompt response and vigorous enforcement of the law in order to quickly stop the bleeding and heal the injury caused by these dysfunctional practices at a critical time for export shipments to serve overseas food-manufacturing customers."

SSGA Executive Director Eric Wenberg said: "Our members have heard from customers in Asia that they question whether the United States and its agricultural exporters can continue to be reliable suppliers based on the difficulties of intermodal shipping today. Ocean carriers need to work with us to solve these transport problems and get our goods back to Asian ports."

"The U.S. reputation of being a strong exporter of quality food to foreign customers is on the line. We have to act," added Wenberg.

Here is the link to USDA's Grain Transportation Report: https://www.ams.usda.gov/….

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

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