Nearly 300 groups representing agricultural exporters, farmers and ranchers are appealing to the U.S. Department of Transportation to intervene in “predatory and unreasonable” practices by ocean carriers.
In a letter to U.S. Secretary of Transportation Pete Buttigieg, the groups said carriers are declining to ship U.S. agricultural commodity exports from U.S. ports and imposing hundreds of millions of dollars in punitive charges already determined to be unreasonable by the Federal Maritime Commission.
“The burden on hardworking exporters, manufacturers, farmers, ranchers and our rural communities is overwhelming. We urge the Department of Transportation to utilize all existing authorities to remedy the challenges experienced by U.S. agricultural exporters,” they said.
The groups said the ocean shipping industry, which once had dozens of carriers, has consolidated over the last three decades. A result of that consolidation is complete reliance on less than a dozen foreign carriers to deliver U.S. agricultural products overseas.
“The tenuous nature of this arrangement is evident as VOCCs (vessel-operating common carriers) are delivering massive volumes of imported shipments to U.S. ports and then electing to leave without refilling empty containers with American goods and products.
The lucrative freight rates paid by the import cargo, combined with congestion and delay at ports on the West and East Coasts are leading VOCCs to immediately return empty containers to their overseas ports of origin, they said.
“The situation is exacerbated by carriers’ failure to provide accurate notice to our exporters of arrival/departure and cargo loading times, and then imposing draconian financial penalties on the exporters for ‘missing’ those loading windows — a practice that the FMC has found to be unreasonable,” they said.
Foreign markets are critical to American farmers and ranchers with more than 20% of agricultural production going abroad. It is cost prohibitive for producers to rework the supply chain and find alternative means of fulfilling their overseas contracts, they said.
“This impossibility coupled with significant pricing increases explains estimates of nearly $1.5 billion in lost agriculture exports. These losses come on the heels of trade conflict and pandemic that have wiped away markets globally,” they said.
The mounting frustration of U.S. agriculture is why a vast array of food and agriculture associations supported the Federal Maritime Commission’s investigation to address VOCCs predatory or unreasonable behavior and its rule setting forth guidelines for detention and demurrage, they said.
“We need action now; not additional studies. We ask the Department of Transportation to assist the Commission in expediting its enforcement options,” they said.
The groups also urged the department to consider its existing authorities to determine how it can assist in overcoming the current challenges in shipping goods and products.
The groups sent copies of the letter to USDA and chairpersons of Senate and House committees involved in transportation and commerce.