During the height of the pandemic, the World Trade Organization (WTO) published a report titled “COVID-19 and Agriculture: A Story of Resilience,” claiming that most agricultural trade had remained resilient throughout COVID-19.
The WTO reached that conclusion based upon the essential nature of food and the fact that “most agricultural trade takes place in bulk marine shipments that have not been subject to major disruptions.” Lately, however, it seems as though most U.S. agricultural exporters can only wish that were a true statement.
The reality is that nearly every part in the U.S. supply chain is struggling. Whether its trucking issues, railroad delays, container shortages, vessels departing without servicing U.S. exporters, outlandish demurrage fees, or a shortage of air freight cargo flights, the U.S. agricultural, and specifically dairy, supply chains are hurting.
The stories shippers are telling should raise all of our collective eyebrows: Products are sitting on rail sidings, unable to even reach a coast, much less a port, for export for weeks on end. Small dairy exporters are unable to gain traction with vessel carrier scheduling bookings and are having to barter and beg with larger dairy exporters for space in one of their vessel bookings. Truckers are waiting hours in queues to try to connect with the vessels from which they are either receiving or providing their goods. Vessels are circling or anchored outside ports for months in vain hopes they will be called up to dock and offload their goods. Vessels are returning to Asia so far behind schedule due to port congestion and delays stateside that they are skipping entire ports of call in Asia, resulting in goods being offloaded at the wrong destination. Agricultural products, viewed as less profitable than other goods waiting to export, are being offloaded or held in favor of other, higher value or easier products for carriers.
Untangling the web of causes behind these issues has been a struggle for U.S. officials and congressional representatives and staff. Questions exist about whether ports are following basic good practices, using demurrage only when merited, and providing reasonable windows in which importing vessels can offload their goods. Rail and truck carriers and ports all equally voice concerns about each other’s practices in handling the congestion, and through it all, consumers remain at home, causing massive pressure on the shipping supply chain through online ordering. Murky blame appears to be shifting between rail carriers, truck carriers, ports, labor rules during the pandemic, and China, all while basic U.S. importing and exporting infrastructure capabilities are simply inadequate to meet the demand.
So, what do we do about it?
Many agricultural organizations, including the International Dairy Foods Association (IDFA) have been advocating on behalf of our members with Congress and the Biden administration. We understand the complex nature of our members’ supply chains and the related disruptions, and that our government and congressional colleagues may not have visibility into these supply chains. We also understand these supply chain disruptions may result from a myriad of factors, not solely market conditions, and that they may not be under a single agency’s jurisdiction. That’s why we are working to educate our congressional colleagues about the far-reaching nature of these delays and their impact on the dairy industry in particular.
We’re also asking our federal government colleagues to hold interagency discussions about how to most rapidly address U.S. agricultural shipping delays. We’re joining with the Agricultural Transportation Working Group and Coalitions to make President Biden aware of the urgent nature of these concerns, and encouraging acknowledgement that this issue has reached the unsustainable point of no return that can no longer be resolved through a simple federal investigation.
With recognition of the tremendous performance of U.S. dairy exports in 2020, IDFA calls on U.S. officials to look not at export data for symptoms when diagnosing the problem, but at the stories of our membership, like the above. The longer the delays continue, the more backed up our industry becomes, and at what point do we lose foreign buyers and suppliers altogether because our shipping windows aren’t reliable or consistent and our ports aren’t handling imports responsibly?
More importantly, must we really reach the point where we’re losing foreign buyers and suppliers before the administration takes more urgent action to support U.S. agriculture? IDFA argues that cannot – and must not – be the case, and we’re working tirelessly to ensure our government colleagues have whatever tools they need from us to effectively support our importing and exporting members.
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Becky Rasdall is a Vice President, Trade Policy and International Affairs at the International Dairy Foods Association.