The other supply chain crisis: American farmers can’t ship food overseas because foreign tankers won’t take it
As Christmas approaches, many Americans are concerned about lengthy backups at US ports, especially on the West Coast, which cause delays in the US supply chain and could make many overdue holiday gifts. .
But many American farmers face the essentially opposite of this supply chain crisis – they struggle to get their goods out of the country to overseas buyers.
“This is the destruction of millions of dollars in value,” Representative Dusty Johnson, RS.D. at FOX Business. He was the main sponsor of the Ocean Shipping Reform Act which passed the House on Wednesday by 364 to 60 votes.
Of the provisions in the bill, Johnson said the most important relate to Asian shipping carriers who “unfairly discriminate against American freight.” He said they would unload foreign goods at US ports and then simply return to Asia so they can bring more goods back to the US, rather than taking the time to stock up on US goods to sell to the United States. foreigner.
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“You look at Valley Queen, it’s a cheese maker in South Dakota. They had 2 million pounds of lactose already sold that was in a warehouse awaiting shipment,” Johnson said. “And a recent container of lactose that they sold … was on the dock for 75 days.”
“It started to deteriorate. And on that one load of containers alone, it was a loss of $ 25,000. And it is happening throughout the American manufacturing and agricultural supply chain,” he said. -he adds.
Johnson also detailed the story of an Iowa pork producer who told Congress he was losing huge amounts of money because his product had to sit on the dock for a long time and eventually had to be frozen. .
“Asia loves chilled pork. They love never frozen pork. And we ship a huge amount of pork there. And when it has to sit on the dock for days at a time to keep it from spoiling. , we have to freeze it. And that eliminates millions of dollars in bounties that Asians are willing to pay, “Johnson said.
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The problem exists throughout the American agricultural industry, particularly in states that depend on West Coast ports to ship their goods. The president of a California agricultural association told the Associated press that 80% of overseas shipments were canceled in October. And the contracts that U.S. agricultural producers are forced to sign tend to encourage this type of behavior on the part of shipping companies, Johnson said.
“Right now we have five major shipping carriers, they’re all foreign-flagged, and frankly their interests don’t quite match the interests of this country,” Johnson said.
“Unfortunately because it’s an oligopoly… you have to take it or leave it if you’re an American agricultural shipper,” he added. “The terms often say that the damages for you voiding a container are $ 100. Well, there may be $ 100,000 of goods in each container.”
Johnson said the Ocean Shipping Reform Act would push back against this behavior by establishing “some ground rules of the road.”
“If you’re going to use this shared infrastructure, you’re going to play fair, and you’re not going to have unprecedented levels of rejection of US cargo – that’s what we’re seeing real rejection a refusal to take that cargo,” did he declare.
Johnson said the bill is not protectionism but is in fact “the opposite” because it seeks to encourage trade with Asia. It also discusses other elements of the supply chain crisis at US ports, including the long lines of ships trying to get goods to the United States.
“Overall, the bill really does create an environment where efficiency is rewarded for these ocean carriers, and so you have provisions in the bill that data interchange can be set up and really is. – they are encouraged to put them in place, “Johnson said. “It will make the whole system work a lot better.”
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This efficiency could mean more than just that next year’s Christmas presents arrive on time. Many sectors of the US economy are affected by the backlog of foreign goods, including agriculture.
“Farmers in my district are already looking at shortages of farm equipment and chemicals as well as skyrocketing costs, which will impact what they can plant next year,” the company told FOX Business. Illinois congressional candidate Esther Joy King.
The Ocean Shipping Reform Act will now go to the Senate, where it will end up on President Biden’s desk if passed. The bill would be the biggest marine regulatory update in 30 years if signed by the president, Johnson said.
The Associated Press contributed to this report.