U.S. exporters of agricultural and forest products are still experiencing devastating delays and added costs as the supply chain crisis continues, a new survey shows.
Exorbitant freight rates, demurrage and detention fees, chassis shortages, port congestion and more have led to lost sales, additional costs and employee burnout, according to the survey by the Agriculture Transportation Coalition.
Exporters reported extreme difficulty in getting their products on ships and to overseas markets as ocean carriers continuously shuffle schedules or decline bookings. They reported numerous booking changes — one of up to 75 times — and multiple handling of the same shipment.
Many reported the challenges have led to the need for additional employees, increased overtime, lost employees, trouble finding employees and a considerable amount of time chasing all the booking cancellations, vessel delays and per diem charges.
“The survey quantifies the collapse of the agriculture export supply chain, the lack of predictable, dependable ocean carrier service and dramatically increasing freight rates leading to lost foreign sales,” said Peter Friedmann, executive director of AgTC.
“Our agriculture producers are being prevented from being the affordable, dependable suppliers of food and fiber to the world,” he told Capital Press.
The human toll reported in the survey speaks volumes as well, he said.
Lost sales by individual companies in 2021 ranged from $120,000 for the smallest exporter to millions of dollars reported by many companies — up to $65 million.
The survey found carrier arrival, loading and sailing dates were consistent with advance schedules only 6% of the time and exporters were able to deliver timely to overseas customers just 35% of the time.
The vast majority — 87% — of exporters said when export sales are lost, they are forced to sell into domestic markets, generally at significantly lower prices. A vast majority also said they have shifted some of their business to other countries due to lack of dependable delivery time and additional costs.
The survey also found:
• 85% of exporters who lost export sales attributed it to the inability to deliver within the contracted time period.
• 40% of exporters who lost export sales attributed it to unaffordable (to exporter or foreign customer) additional transportation costs, including higher freight costs, storage and demurrage and detention fees.
• 28% who lost sales said it was due to lack of notice by the carrier of changes to sailing, arrival and loading schedules.
• 40% of requested export bookings were declined by a carrier at first request and 28% of those were declined by all carriers and not shipped.
• 31% of confirmed export bookings were canceled by a carrier.
• 41% of export cargo was subjected to detention and demurrage charges, frequently greater than the freight rate.
• Exporters said the primary causes leading to demurrage and detention charges were carriers changing the schedule and inadequate notice of changes. Those were followed by unrealistic short receiving window at the terminal, lack of terminal gate appointments or space on terminals and terminal policies.
• 92% of exporters said lack of available chassis delayed export and import agriculture shipments, at rail ramp, marine terminal, container examination stations and container yards.
Projections for the supply chain getting closer to normal are toward the end of 2023 because it’s expected the deluge of U.S. imports will be reduced and additional vessels are coming into the marketplace, Friedmann said.
“But Congress is intervening to address the most damaging ocean carrier practices,” he said.
To view the survey results, visit: https//agtrans.org .