White House is working ‘from both ends’ to resolve ag export disruptions
The Biden administration is employing a multi-pronged strategy to speed agricultural exports through congested ports, and a project in Oakland is one piece of it, said White House port envoy John Porcari on Monday. The government will pay part of the cost for a 25-acre “pop-up” site near the port that will be dedicated to loading farm exports into scarce containers.
The site could go into operation as soon as early March, said Agriculture Secretary Tom Vilsack. The USDA will pay 60% of start-up costs and a $125 subsidy per container to offset “additional movement logistics.” The USDA estimated that it will spend $5 million as a partner in the project, which was announced by the Port of Oakland on January 3.
Agricultural exports have suffered as part of pandemic-driven disruptions of sea ports; California’s ag exports fell by an estimated $2.1 billion in a five-month period last year— a greater impact than the Sino-U.S. trade war. Shipping lines, hoping to take advantage of high fees for containers at Asian ports, prefer to leave U.S. ports with empty containers rather than carry a load of cargo. Farm and agribusiness groups say carriers have refused to accept loaded containers or repeatedly delayed shipping dates.
“We’re attacking the problem from both ends, finding ways to incentivize and streamline agricultural exports and working with ocean carriers to restore service,” said White House port envoy John Porcari during a webinar sponsored by dairy groups. “So the announcement you heard today for the Port of Oakland is only one part of a multi-pronged strategy.”
Pop-up sites like Oakland’s were announced previously in Georgia, and Vilsack said more of them could be added to ports on the West Coast. “We’ll continue to build fluidity at the ports so that exports are not disadvantaged,” said Porcari. “We’ll emphasize rail use as part of the way that we can do that.”
Reps. John Garamendi of California and Dusty Johnson of South Dakota, sponsors of a shipping reform bill, said the Federal Maritime Commission needed additional power to quash unfair behavior by carriers. Their bill, which was passed by the House in December, would make reciprocal trade part of the FMC mission, prohibit unreasonable refusals to carry U.S. exports, and require carriers, rather than exporters, to prove why late fees should be levied.
“All that you are doing is not going to solve the problem,” said Garamendi to Porcari and Vilsack. He said ships were carrying increasingly larger percentages of empty containers despite pressure from businesses, ports, and the White House. “The carriers do not understand the word ‘reciprocity’…To the Port of Oakland: Good luck.”
Johnson said “we still have a very real problem” at the ports. “I think we’re about 40% of the way there.”
Vilsack said the Oakland site was “an important first step.” And he said, “we are starting to see some of the shippers coming back to Port of Oakland” following a December letter by Transportation Secretary Pete Buttigieg and Vilsack that urged leading freight lines to mitigate disruptions to agricultural shippers by restoring reciprocal treatment of imports and exports and to reverse decisions to suspend service to the Port of Oakland, a major export terminal for ag products.
To improve the flow of agricultural exports, the Port of Oakland said it will open “a 25-acre off-terminal, paved container yard equipped to move containers off chassis and store them for rapid pick-up.” The USDA said the project will result in quicker pick-up of empty containers and reduce congestion surcharges on semi trucks.
A record $172.2 billion of U.S. farm goods were exported in the fiscal year ending last September 30 and the USDA forecasts that sales will be an even-larger $175.5 billion this fiscal year. Exports account for around 20¢ of each $1 in farm receipts.