COVID-19 strikes again
Mar 17, 2021
WEST COAST, USA -- Agricultural transportation disruptions continue to persist here and in the Gulf of Mexico due to widespread container and port crew shortages as a result of the COVID-19 pandemic. This is leaving exporters reeling, while saddled with the burden of near-record shipping costs and logistical chaos.
U.S. container shortages first started impacting shippers in early 2020, however, over the past several months, the issue has gotten progressively worse. A breadth of agricultural products, including meat, produce, and grain are feeling the negative effects of the backlog on containers, all while detention and demurrage fees, as well as other penalties, rack up.
Because of a generous premium, inbound containers from China are being unloaded and immediately returning to China without being reloaded with U.S. goods for export, leading to container shortages across the country. COVID-19 restrictions and protocols have severely limited the number of port crews to load and unload shipments, hampering what is normally an efficient process.
USA Rice has been engaging with the Federal government through multiple avenues, including outreach to Capitol Hill and the Biden Administration, and through coalition involvement in Washington. Staff has met with and briefed the Federal Maritime Commission (FMC), along with the DC-based Ag Transportation Working Group, to provide some examples to their Commissioners about the impact container and port crew shortages are having on the rice industry, as well as the agriculture industry as a whole.
The FMC has issued a request for information from ocean carriers and marine terminal operators. Unfortunately, while the call for information is likely to show the carriers and operators that the FMC is serious about the issue, the May deadline for data submission means the issue is likely to persist or get worse over the coming months.
USA Rice provided specific information to educate Congressional offices looking to address the problem. This effort, in addition to a nationwide effort by many facets of the agriculture industry, resulted in a letter from over 140 Members of Congress to the FMC, which included many Members representing rice districts.
“While meat and produce shipping delays risk product spoilage, U.S. rice exports risk expiration of foreign import certificates and missing contract delivery windows as we heavily rely upon containers to ship to our more than 130 export markets,” said Peter Bachmann, USA Rice vice president of international trade policy. “We need to find a workable solution, but unfortunately this may be a lengthy process, and in the meantime, our exporters should not be penalized for actions by the freight companies and other factors outside their control.”
Bachmann added: “However, we’re not alone in this fight. USA Rice will continue to partner with other industries impacted and various coalitions until a sense of normalcy in the shipping business returns.”
In addition to the Congressional letters sent, USA Rice joined more than 70 agriculture organizations on a letter to President Biden asking for resolve.