A historic peak shipping season with significant container ship backlogs is being used by a coalition of U.S. agricultural exporters to promote regulatory changes attempting to rein in alleged abuses by container carriers.
In a letter sent to the White House on Monday, 76 groups representing various agricultural export commodities warned that steps taken so far by the Biden administration to address the problem are not enough. They claim that operational tactics that carriers continue to employ are burdening exporters with unreasonable costs and robbing them of foreign-market opportunities.
“Carriers are increasingly declining or canceling export cargo bookings, while frequent ship delays and cancellations with little or no notice to our exporters is delaying shipments by weeks or even months,” the groups stated. “The resulting inability of shippers to deliver their products on schedule affects the reliability of American exports and subsequently decreases export values and market share.”
The coalition noted that the cost to ship a container has increased between 300% and 500% in the past two years, causing U.S. producers to lose 10% to 40% of their export value and 22% of overseas sales.
“With the holiday import surges soon upon us, the challenge is growing,” they wrote. “Regulatory action and enforcement steps take time to be implemented, and while those important processes need to move ahead, we call on you and your administration to take effective steps to gain immediate relief. Recognizing that relief may be incremental, it must begin very soon.”
Among “near-term” actions the coalition is seeking from the White House:
- Direct the Department of Justice to review the existing Shipping Act law to determine if the enforcement tools in that act can be activated to gain compliance with the other provisions of the act setting forth reasonable practices.
- Support legislation, including the bipartisan Ocean Shipping Reform Act, HR 4996, to address “unfair” practices that are currently damaging U.S. agriculture exports.
- Establish an interagency working group focused on facilitating agriculture exports.
- Sponsor initiatives to increase operational tempos, including increasing gate operations, to include port authorities, terminal operators, labor, ocean carriers, shippers and truckers. Incentivize ocean carriers to increase export flows by fully utilizing their existing capacity.
- Increase coordination between the Federal Maritime Commission and the Surface Transportation Board on oversight of multimodal container shipments to assure that the FMC and the Shipping Act apply to the complete international transit of goods from origin to destination.
Groups included in the coalition are the Agricultural Transportation Coalition and American Trucking Associations’ Agricultural & Food Transporters Conference and its Intermodal Motor Carriers Conference.
The ATA and the Agriculture Transportation Coalition were also among 156 businesses and trade groups that signed onto a letter sent on Monday to John Garamendi, D-Calif., and Dusty Johnson, R-S.D., the co-sponsors of the Ocean Shipping Reform Act, urging passage of the legislation. The bill is aimed at addressing systemic supply chain and port disruption issues, including demurrage and detention policies by the carriers that shippers claim are unreasonable.
Carriers and their representatives are adamant that they have been operating within the legal borders of the Shipping Act and that any operational actions affecting rates, fees and service to exporters have been a direct result of unprecedented demand for U.S. imports.
FMC Chairman Daniel Maffei recently told FreightWaves after a meeting between the FMC and its regulatory counterparts in the European Union and China that no evidence has yet emerged among the three agencies that carriers are manipulating the container markets or are colluding on price within the alliances.
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