The Agriculture Transportation Coalition’s (AgTC) virtual convention heard Executive Director Peter Friedmann underscore the continued frustration that U.S. agricultural exporters experience booking space for export containers from ocean carriers.
The situation seems unlikely to end any time soon, as the log jam of backed up vessels at the Ports of Los Angeles and Long Beach continues to spill over to other ports around the United States.
Jeremy Nixon, chief executive officer Ocean Network Express (ONE) the Japanese container shipping company, told AgTC attendees that “we share the pain and frustration of our customers” including U.S. exporters who scramble to find space on ocean carriers he/p>ck to Asia and other export destinations.
Nixon said ONE was trying to increase equipment to exporters including reefer containers to help shippers meet “those stretched dwell times.”
He said ONE is committed to working with the Federal Maritime Commission and shippers to address detention and demurrage issues that have impacted shippers and exporters. ONE is also providing truckers with detention and demurrage reports to keep truckers apprised of containers under their control that should be picked up so as to avoid paying penalties for late pick-ups. Nixon added that ONE was expanding its customer resolution capacity to resolve issues with customers who feel they have been unfairly treated or who feel the data is incorrect.
While ONE and the ocean carrier community wish to reduce bottlenecks and improve space availability for exporters a big problem that has to be addressed is to “increase land-side resources in North America” for moving imports and exports “more efficiently.”
ONE Announces Service Resumption to Port of Oakland
Nixon said ONE was trying to improve the shortage of sailings at the Port of Oakland, a key U.S. export port:
“We are trying to maintain our coverage in Oakland which has been extremely challenging and has been impacted by the Los Angeles Long Beach delays. … Savannah and New York remain challenging and we will try to minimize the voyage (time moving) the product back to Asia.”
Following Nixon’s speech, Maria Bodnar, ONE’s senior sales director for North America, told AgTC attendees that ONE was reinstating a service to Oakland beginning on November 15. Prior to November 15th, ONE would bring several ships to the Port of Oakland to increase vessel sailings until the service resumption begins on November 15th.
Bodnar said “ONE wants to make clear that the Oakland market is very important to us. So, we will be working with our terminal partners and ocean alliance partners to make valuable improvements to your supply chain.”
The move was applauded by Peter Friedmann who noted that agricultural exporters have been lobbying ONE and other carriers to reinstate sailings to Oakland that were cut by 40% beginning in August just as agricultural products were being harvested in the fields and being staged for transport to Oakland for export.
Friedmann praised the advocacy of TGS Logistics President Peter Schneider who had urged AGTC to complain to carriers about the cutbacks in Port of Oakland sailings. Friedmann also praised the advocacy of Port of Oakland staff as well as truckers, exporters and importers.
Schneider, who spoke to the Propeller Club of Northern California on September 28th said the reduction of ocean carriers service to the Port of Oakland by the carriers had hit farmers in California’s San Joaquin Valley (SJV) especially hard since many must now truck their containers to the Southern California ports at a higher rate than when trucking to Oakland.
Ed DeNike, SSA Containers
Friedmann next introduced Ed DeNike, president of Stevedoring Services of America Containers. Stevedoring Services of America (SSA) operates terminals at Seattle, Tacoma, Oakland and Long Beach.
DeNike expressed surprise that in the middle of the congestion crisis at the Ports of Los Angeles and Long Beach, the Port of Oakland’s Oakland International Container Terminal, which SSA operates and which handles about 70% of the Port’s container volume has lost business. This comes at a time when “our terminal is half full and we have no ships waiting. So, Oakland’s available.”
The congestion at Los Angeles, Long Beach and to a lesser extent Seattle is not due to the shortcoming of terminals but shortcomings in the entire supply chain: “The terminals are full of import containers, thousands of import containers that are not moving. As a result, the terminals cannot work vessels the way they would normally work. Normally we would work 4-6 cranes on a ship but now we’re working 1-2 cranes because there’s no room in the terminal, because of all of these imports sitting on the terminal and not being picked up.”
DeNike said the problem started with the Union Pacific and Burlington Northern Santa Fe railroads who provide container rail service for imports from the Ports of Los Angeles and Long Beach to Midwest destinations such as Chicago: “It started, quite frankly, with the railroads not being able to handle the increased volume. We ended up having thousands of rail containers on the terminals that wouldn’t move.”
The situation then spilled over to container yards and warehouses and resulting in a further backlog of containers at terminals.
John Wolfe, Northwest Seaport Alliance
John Wolfe, chief executive officer of the Northwest Seaport Alliance, told AGTC that the two ports are extending gate hours at terminals and seeking inland staging areas to help exporters bring containers closer to the Port. In this way, truckers can move containers to terminals when space on ocean carriers opens up as vessels approach Seattle or Tacoma.
Exporters Discuss Challenges
Friedmann introduced a panel of agricultural exporters who discussed challenges their companies and customers are facing:
Scot Courtright, a hay exporter based in Washington State, said that freight bookings for vessel space to Asia now need to be made 6-8 weeks in advance. Uncertainties in vessel departures were raising costs and slowing down shipments to customers overseas. He noted that there was beginning to be congestion at the ports of Seattle and Tacoma adding to exporter problems.
Katie Quinn, representing Darigold a major milk products exporter, is fighting delays and rising costs getting export shipments to Asia and other destinations and is seeking better communications. Darigold has moved some exports through Gulf Coast ports to avoid congestion at West Coast ports
Randy Strait, representing the poultry producer Tyson, said that congestion at West Coast ports for exports to Asia had prompted the company to ship out of the ports of Charleston and Philadelphia which are less congested but added to shipping times to Asia that he described as “inefficient” compared to shorter sailing times from West Coast ports.
Joshua Woods, representing Blue Diamond Almonds cited the inability of carriers to provide reliable windows for Blue Diamond to truck containers to the Port of Oakland for export on container ships. He said the company has faced added costs with finding staging areas close to the Port of Oakland to rush containers to the terminal when carriers finally provide a time window for reliably loading containers on ships.
Kelly Gaynor representing Scoular, an exporter of soybeans and grains, says her company annually spends $75-100 million on shipping costs per year to Asia and other markets. Gaynor said “there is a dire shortage of empty containers and chassis” which has undermined the company’s ability to truck export containers. She said that electronic bills of lading that have replaced paper have simplified export transactions and reduced processing times.
Mario Cordero, executive director Port of Long Beach, told AgTC that the Port has found additional space to store and stage containers to ease some congestion. He also said that working expanded hours at terminals can relieve some congestion
