Market Matters Blog

Container Crisis Continues to Plague US Ag Exporters

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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SSGA recently noted that it has been estimated $1.5 billion in ag exports have been lost during the container crisis, which has come on the heels of a pandemic that has also severely injured the market. (Photo by Michael Embrich, U.S. Army Corps of Engineers)

Specialty Soya and Grains Alliance (SSGA), on their website, recently wrote that, "For more than six months, U.S. ag exporters, including SSGA members who supply Identity Preserved (IP) soya and specialty grains for food manufacture, have suffered under unreasonable practices by ocean carriers. These practices include the declining of U.S. agricultural and other exports in favor of sending empty containers back overseas in order to keep up with the massive demand for consumer imports."

During that time, shippers have asked the Federal Maritime Commission (FMC) and President Joe Biden to intervene on their behalf: https://www.dtnpf.com/…

SSGA said that the imbalance has caused congestion, delays and even cancelation at the ports, and carriers have failed to provide accurate notice of arrival, departure and loading times. "Carriers have also imposed unreasonable, punitive financial penalties on exporters, who, through no fault of their own, have missed loading windows. This is in violation of detention and demurrage guidelines set forth by the FMC."

In an April 19 meeting, USDA convened a meeting with representatives of U.S. agricultural products and leadership from the United States Department of Transportation (DOT) to discuss current issues surrounding shipping U.S. agricultural exports, as well as logistical and technical concerns. Participants included a wide range of agriculture stakeholders in the livestock, grains, specialty crop and dairy industries, as well as representatives from the shipping and value-added sector of U.S. agriculture. The discussion was led jointly by USDA Chief of Staff Katharine Ferguson and DOT Senior Advisor Carlos Monje, the key point of contact for Secretary Buttigieg on this issue.

In a press release about that meeting, USDA noted that the recent resurgence of international trade has placed nearly every sector of the supply chain under stress, including warehousing, trucking, rail service, inland and ocean terminals, container availability and vessel service. "While this disruption is impacting ports along the West Coast and the Gulf of Mexico, the Ports of Los Angeles and Long Beach, the busiest container ports in the U.S, moving nearly a third of containerized agricultural exports by volume, have experienced the worst disruption," said USDA.

"Export challenges began in the fall of 2020 and have escalated to include a broad range of impacted commodities and port regions. Demand in consumer trade has led to a supply crisis in the availability of shipping containers, while refrigeration challenges, lack of certainty in fee structures and booking policy inconsistencies have all made export of agricultural products more difficult for U.S. producers," USDA added. "For far too long, farmers have struggled to find a market for their products and get a fair price for their hard work. With markets opening back up, and more appropriate prices on the board, we must work together to collectively ensure that U.S. farm products reach their intended destination in the hands of consumers around the globe. USDA will continue to serve as a key facilitator and voice for American agriculture on this very important issue."

The DOT team highlighted current efforts underway at their department and committed to work with the Federal Maritime Commission and others to help mitigate these issues facing U.S. agriculture.

On April 27, SSGA joined nearly 300 agricultural and forest product associations and companies, including several SSGA members, in signing on to a letter to Transportation Secretary Pete Buttigieg, urging immediate intervention to remedy the situation.

"We need action now, not additional studies," noted the letter. "We ask the DOT to assist the Commission in expediting its enforcement options. Additionally, we urge the DOT to consider its existing authorities to determine how it can assist with the transportation needs of the U.S. exporters and the farmers and ranchers they serve, in overcoming the current challenges in shipping goods and products."

With no sign of the crisis letting up in the immediate future, SSGA is hopeful that Secretary Buttigieg will act upon this increasingly dire situation. "Our members, allies and partners at the Agriculture Transportation Coalition have specific measures to propose and are requesting the opportunity to present them," said SSGA.

Here is a copy of the letter sent to Transportation Secretary Pete Buttigieg: https://www.dtn.com/…

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

Follow her on Twitter @MaryCKenn

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