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Shipping crisis disrupts industry

U.S. ag associations calling on Biden administration to use government tools to stem current ocean carrier practices.

Compiled by staff

February 26, 2021

3 Min Read
Containers Cargo shipping Logistic freight warehouse Import Export Business
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Seventy-one agricultural associations are calling for President Biden to intervene in a shipping container crisis that has injured food and other U.S. ag and forestry.

In the letter sent Wednesday, the group requested that provisions available to the Federal Maritime Commission via the Shipping Act and other government tools “be immediately applied to stem the current ocean carrier practices that are so damaging to our agricultural products.”

CNBC reported in January that shipping carriers rejected U.S. agricultural export containers worth millions of dollars during October and November, instead sending empty containers to China to be filled with more profitable Chinese exports. U.S. agricultural exporters petitioned the Federal Maritime Commission, which launched an investigation.

In February, California state officials called for immediate action from the Federal Maritime Commission. 

On Feb. 17, Federal Maritime Commission Commissioner Rebecca F. Dye issued "information  demand orders" to ocean carriers and  marine terminal operators to determine if legal obligations were being met.

Rep. Jim Costa, D-Calif., the second-ranking member on the House Agriculture Committee and longtime congressman from California's Central Valley, spoke exclusively with Western Farm Press about the issue. Costa says he is working with California congressional colleagues to gather information and hopefully help solve a months-long fight for empty shipping containers.

Related: Global logistics company Hillebrand addresses the question: Where have all the containers gone

This isn't a problem only in the U.S. The BBC reported on Jan. 22, 2021, that the shortage of shipping containers is causing additional headaches for British businesses already facing challenges trading with EU countries because of Brexit. The owner of a Hong Kong-based clothing company who has been supplying clothes to British retailers for more than 40 years says his family firm won't be able to absorb inflated shipping rates for much longer. He says he's being quoted $14,000 to ship a container to the United Kingdom, compared to the usual rate of $2,500.

In the U.S., the Agriculture Transportation Coalition organized a letter to President Biden.

It reads, "According to their own public reports, the ocean carriers are enjoying their most profitable period in decades by controlling capacity and charging unprecedented freight rates, imposing draconian fees on our exporters and importers, and frequently refusing to carry U.S. agricultural exports.

"These refusals and charges by the ocean carriers dramatically increase costs to our exporters, making foreign sales inefficient and uneconomical, rendering farmers and processors (for the first time), unreliable suppliers to the global supply chain. The international ocean container carriers which carry over 99% of our foreign commerce, are headquartered overseas - perhaps unaware of the injury their actions are causing to the US economy, as they profit from the pandemic."

The letter was also sent to USDA Secretary Tom Vilsack, along with Transportation Secretary Pete Buttigieg, Council of Economic Advisors Chair Cecilia Rouse and Federal Maritime Commissioner Michael Khouri.

“The only way to get out of this is for ocean carriers to return to previous levels of taking containerized exports out of the U.S. instead of such a high percentage of empty containers,” said Darwin Rader, SSGA’s secretary/treasurer and competitive shipping action team chair. “There’s a lot of frustration among U.S. exporters. We have to keep pushing as hard as we can for carriers to treat U.S. exporters fairly to help restore the balance of trade."

Source: Specialty Soya and Grains Alliance, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. 

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