WASHINGTON, D.C. — More than 70 agriculture and forest products associations signed a letter Feb. 24 that was sent to President Biden, Secretary of Agriculture Tom Vilsack, Secretary of Transportation Pete Buttigieg, and Federal Maritime Commission Chair Michael Khouri regarding the growing concern over the nation’s agriculture exporters’ access to international markets due to the unprecedented dysfunction and cost of ocean freight transportation services, and rejection of US export cargo by ocean carriers.
The associations representing the interests of pet food and treat processors who export US-manufactured products included the American Feed Industry Association (AFIA), Pet Food Institute (PFI), National Grain and Feed Association (NGFA) and North American Renderers Association (NARA). The letter seeks to draw the Biden administration’s attention to the actions of ocean container carriers, including declining to carry export cargo, that is severely injuring US agriculture, food and forestry product exporters, preventing them from delivering affordably and dependably to international markets.
Calling the situation a crisis, the associations warned that “unless the Shipping Act and other tools available to our government are applied promptly, agriculture industries will continue to suffer great financial losses; these carrier practices will render US agriculture noncompetitive for years to come.”
Explaining that ocean carriers are charging unprecedented freight rates and fees, as well as frequently refusing to carry US agricultural exports, the associations said these refusals and charges dramatically increase costs to our exporters, making foreign sales inefficient and uneconomical, rendering farmers and processors, unreliable suppliers to the global supply chain.
In response to the current situation, the Federal Maritime Commission (FMC) last year issued a rule setting guidelines for reasonable carrier practices, but none have been implemented by the carriers thus far. The letter goes on to explain that the Shipping Act provides the FMC with the authority to prohibit unreasonable practices and asks the administration to apply any tools available to “stem the current ocean carrier practices that are so damaging our agriculture exports.”
Spearheading this plea is the Agriculture Transportation Coalition (ATC), which hasidentified unprecedented volumes of import cargo, terminals so full they cannot accept the return of emptied containers or containers loaded with exports, and excessive daily fees being charged by ocean carriers for contributing to the current situation.
Additionally, ATC says that current freight charges from Asia to the United States have been driven as high as $10,000 or $12,000 per container compared to the export container carrying ag and forest products back to Asia, earning $400 to $1,800 in freight charges.
“Now, instead of letting a container to be loaded with ag and forest products (often in rural areas), ocean carriers are declining that export cargo, in favor of returning empty containers to Asia in order to quickly load US-bound imports, generating unprecedented high freight revenue. Stranding our agriculture exports here in the United States, making it impossible to deliver timely to foreign customers,” ATC explained.
Read more about supply chain issues impacting the pet food and treat industry.
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