US Ag Exporters Urge President Biden Take Motion In opposition to Ocean Freight Carriers’ Practices

71 U.S. agricultural business teams teamed as much as write a letter to President Biden, informing him of the damage ocean freight carriers are doing to US agriculture, meals, and forestry product exporters and urging him to take motion.

“This can be a disaster: until the Transport Act and different instruments accessible to our authorities are utilized promptly, agriculture industries will proceed to undergo nice monetary losses; these service practices will render US agriculture noncompetitive for years to come back,” they write of their letter.

The associations, federations, and commissions that put their names to the letter aren’t flawed both. Regardless of a gamut of questionable actions by carriers throughout the course of the pandemic from utilizing their alliances to drop capability beneath market demand to charging no-roll premiums, which I argued had been paramount to holding shippers’ cargo for ransom, what carriers are doing to U.S. agricultural exporters appears to be essentially the most damaging.

Again in November, I opened a weblog publish questioning the legality of what carriers are doing to U.S. agricultural exporters with the frank assertion, “U.S. agricultural exporters are getting screwed.” It was due to that publish the letter agricultural exporters wrote to the president first got here to my consideration. After studying the publish, reporter William Schulz despatched the letter to me and requested I remark, particularly asking if the exporters raised a legitimate concern.

“I consider exporters are elevating a really legitimate concern,” I replied earlier than briefly laying out the state of affairs of what’s taking place to agricultural exporters and why I believe their issues are legitimate.

Overview of What Carriers Are Doing to Shippers By way of Pandemic

Right here’s how I laid out the state of affairs for Mr. Shulz:

“For years, I’ve been warning that the service alliances, which regulators all over the world just like the FMC have allowed, shrink competitors within the ocean freight business and would finally lead to shippers paying increased charges. We actually noticed that come to fruition in 2020 when carriers manipulated capability, dropping it beneath demand, and pushing freight charges manner up. That might not be as fully nefarious because it sounds, as I don’t assume anybody anticipated demand to soar as excessive because it did with lockdowns and authorities stimulus transferring a lot spending to items. It’s nonetheless exhausting to consider carriers didn’t transcend what was cheap, particularly after they began pushing no-roll premiums on shippers when carriers’ reliability reached horrible lows regardless of the file excessive charges they had been charging.

“On high of that, the unimaginable quantity of blanked sailings carriers did within the first half of 2020 started a delivery container scarcity, notably in Asia, by not correctly reallocating containers. That was exacerbated by the very excessive demand for worldwide delivery that was seen all via the second half of the yr and past. That’s all dangerous for U.S. shippers, together with agricultural exporters, however right here’s the place U.S. agricultural exporters actually have a criticism: carriers withholding delivery containers and providers from them. It appears fairly clear that carriers prioritized getting delivery containers again to Asia, the place they had been making more cash on eastbound transpacific routes, delivering items from China to the U.S. particularly, over getting containers to U.S. exporters. Reasonably than delivery containers stuffed with U.S. agricultural items to Asia, they shipped empty containers again to Asia, significantly damaging U.S. agricultural exporters’ capability to ship their items.”

Full Letter to the President

Right here’s the total letter the agricultural exporters wrote to the president, together with the checklist of all 71 teams behind it:

February 24, 2021
President Joseph R. Biden
The White Home
1600 Pennsylvania Avenue NW
Washington, D.C. 20500

Expensive President Biden,

As is being broadly reported, one of many nice business challenges of the on-going pandemic has been actions of ocean container carriers, together with declining to hold our export cargo, severely injuring US agriculture, meals and forestry product exporters, stopping us from delivering affordably and dependably to worldwide markets. This can be a disaster: until the Transport Act and different instruments accessible to our authorities are utilized promptly, agriculture industries will proceed to undergo nice monetary losses; these service practices will render US agriculture noncompetitive for years to come back.

In keeping with their very own public stories, the ocean carriers are having fun with their most worthwhile interval in a long time by controlling capability and charging unprecedented freight charges, imposing draconian charges on our exporters and importers, and regularly refusing to hold U.S. agricultural exports.

These refusals and fees by the ocean carriers dramatically enhance prices to our exporters, making overseas gross sales inefficient and uneconomical, rendering farmers and processors (for the primary time), unreliable suppliers to the worldwide provide chain. The worldwide ocean container carriers which carry over 99% of our overseas commerce, are headquartered abroad – maybe unaware of the damage their actions are inflicting to the US financial system, as they revenue from the pandemic.

The state of affairs is so egregious that the Federal Maritime Fee (FMC) final yr issued a Rule setting forth tips as to what can be cheap service practices – nevertheless, none have been carried out by the carriers, deepening the disaster. Whereas the FMC is enterprise additional efforts to realize compliance, the injury being finished to our agriculture and forest merchandise industries is extreme, rising, and with misplaced overseas markets, could also be irreversible.

The Transport Act supplies the FMC with the authority to ban unreasonable, unjust practices, and “to advertise the expansion and growth of US exports via aggressive and environment friendly ocean transportation…’. Given the urgency of this example in commerce, we ask that these instruments and any others accessible to our authorities be instantly utilized to stem the present ocean service practices which are so damaging our agriculture exports.

Sincerely,

1. Agriculture Transportation Coalition
2. African-American Farmers of California
3. Agricultural & Meals Transporters Convention of ATA (American Trucking Affiliation)
4. Almond Alliance of California
5. American Farm Bureau Federation
6. American Feed Trade Affiliation
7. American Forest & Paper Affiliation
8. American Potato Commerce Alliance
9. American Pulse Affiliation
10. California Seed Commerce Affiliation
11. California Cotton Ginners and Growers Affiliation
12. California Farm Bureau Federation
13. California Recent Fruit Affiliation
14. California Prune Board
15. California Rice Fee
16. California Walnut Fee
17. Cascade Shippers Affiliation
18. Colorado Corn Growers Affiliation
19. Shopper Manufacturers Affiliation
20. Corn Refiners Affiliation
21. Dairy Farmers of America
22. DairyAmerica Inc.
23. Harbor Trucking Affiliation
24. Hardwood Federation
25. Idaho Potato Fee
26. Intermodal Motor Carriers Convention of ATA
27. Worldwide Affiliation of Refrigerated Warehouses
28. Worldwide Dairy Meals Affiliation
29. Leather-based and Cover Council of America
30. Meat Import Council of America
31. Nationwide Affiliation of Egg Farmers
32. Nationwide Rooster Council
33. Nationwide Cotton Council
34. Nationwide Council of Farmer Cooperatives
35. Nationwide Fisheries Institute
36. Nationwide Hay Affiliation
37. Nationwide Milk Producers Federation
38. Nationwide Onion Affiliation
39. Nationwide Pork Producers Council
40. Nationwide Turkey Federation
41. Nisei Farmers League
42. North American Meat Institute
43. North American Renderers Assiciation
44. North Dakota Grain Growers Affiliation
45. Oregon Potato Fee
46. Oregon Seed Affiliation
47. Pacific Coast Council of Customs Brokers & Freight Forwarders Affiliation
48. Pacific Northwest Asia Shippers Affiliation
49. Pet Meals Institute
50. Potato Growers of Michigan, Inc.
51. Potato Growers of Washington, Inc.
52. Produce Advertising and marketing Affiliation
53. Specialty Crop Commerce Council
54. Specialty Soya & Grains Alliance
55. U.S. Apple Affiliation
56. U.S. Dairy Export Council
57. U.S. Meat Export Federation
58. U.S. Pea and Lentil Commerce Affiliation
59. United Recent Produce Affiliation
60. United States Cattlemen’s Affiliation
61. US Forage Export Council
62. USA Dry Pea and Lentil Council
63. USA Poultry & Egg Export Council
64. USA Rice
65. Washington Farm Beaureau
66. Washington State Hay Growers Affiliation
67. Washington State Potato Fee
68. Western Agricultural Processors Affiliation
69. Western Growers Affiliation
70. Wine and Spirits Shippers Affiliation
71. Wisconsin Potato & Vegetable Growers Affiliation

CC:  Secretary, U.S. Division of Agriculture, Tom Vilsack

        Secretary, U.S. Division of Transportation, Peter Buttigieg

        Chair, Council of Financial Advisors, Cecilia Rouse

        Chair, Federal Maritime Fee Michael Khouri