Tag: Ocean Shipping Reform Act

Efforts Advance to Alleviate Port Congestion

Posted on by Theresa Sweeney

NMPF and the U.S. Dairy Export Council (USDEC) continue to make strides to prompt government action to alleviate ongoing port congestion and high fees limiting U.S. dairy exports.

President Biden’s Nov. 17 announced his support for the Ocean Shipping Reform Act of 2021, a key step made last month. The bipartisan legislation provides new authority to the Federal Maritime Commission to address unjust and unreasonable practices by ocean carriers. NMPF has been asking the White House to support this important legislation, which now has 80 congressional cosponsors. A briefing paper on the legislation is here and a “frequently-asked questions” document NMPF and USDEC created can be found here. NMPF continues work with agricultural organization partners to guide expeditious introduction of partner Senate legislation to limit carrier refusal to load agricultural exports in lieu of returning empty containers to Asia and address unprecedented fees that are oftentimes accrued outside of the exporter’s power.

NMPF Executive Vice President for Policy Development & Strategy Jaime Castaneda also joined members of the Biden Administration’s Supply Chain Task Force on Nov. 12 to discuss export challenges for the U.S. dairy industry. While keeping up the pressure for the administration to fully tackle the long-term implications the shipping delays have on U.S. dairy’s reputation as a reliable supplier, NMPF welcomed as notable progress a spate of announcements from the federal, state and local levels throughout November, including advancements on:

  • Individual port operation improvements;
  • Temporary easement of truck weight limits in California; and
  • The government’s release of “the Biden-Harris Action Plan for America’s Ports and Waterways,” which will accelerate port infrastructure grants, new construction projects for coastal and inland waterways and land ports of entry.

Beyond highlighting the need for additional government action, the dairy industry is also looking to rewrite the media narrative on the effects of supply chain snarls on the U.S. economy. While most of the focus of the supply chain crisis throughout the fall has been on imports of consumer goods, NMPF is working to shift the focus to include the impact that the challenges have on dairy farmers, cooperatives and the thousands of American workers throughout the dairy supply chain.

As part of this effort, NMPF contributed to a Nov. 14 New York Times article illustrating the strain that export complications have placed on U.S. agriculture, with trade team staff making key connections that made the piece an important opportunity to share dairy’s story. In the article, Brad Anderson, the chief executive of NMPF member California Dairies, Inc. noted the breadth of the issue: “This is not just a problem, it’s not just an inconvenience, it’s catastrophic.”

“Are we going to get toys for Christmas? Are we going to get chips for automobiles? We think those are real concerns and they need to be talked about,” Anderson said. “What’s not being talked about is the long-term damage being done to exporters in the world market and how that’s going to be devastating to our family farms.”

NMPF and USDEC continue to collaborate with the Ports Working Group of dairy producers and exporters to identify additional solutions to alleviate the crisis.

Administration, Congress Pressed to Address Port Problems

Posted on by Theresa Sweeney

NMPF, USDEC and a coalition of agricultural associations are keeping up pressure on the White House and Congress to take immediate, substantive actions to relieve worsening problems with port delays and costs.

NMPF and over 75 national and regional agricultural organizations, companies, and dairy cooperatives sent a letter to President Biden Sept. 13 listing specific steps the administration can take to provide near-term solutions to supply chain problems. NMPF and USDEC wrote the letter and initiated the effort.

Meanwhile, NMPF’s Trade Policy team organized an agricultural coalition meeting Sept. 14 with Carlos Monje, U.S. Department of Transportation Under Secretary for Policy, and John Pocari, Port Envoy to the Administration’s Supply Chain Disruptions Task Force, to discuss additional specific steps the White House and Transportation Department could take to force a change in carrier behavior and improve the conditions facing agricultural exporters.

NMPF, USDEC and other members of the agriculture coalition also met virtually Sept. 2 with Tim Manning, White House National COVID-19 Supply Coordinator, to recommend the administration build upon a July 9 Executive Order from President Biden directing the Federal Maritime Commission to “vigorously enforce” guidelines on reasonable detention and demurrage fees by taking additional steps to address the mounting shipping crisis.

Throughout these discussions, NMPF, USDEC and coalition members have also urged the administration to work to extend terminal gate hours and push for the integration of key technology to optimize port efficiency, among other key funding and enforcement steps. The Los Angeles and Long Beach ports announced Sept. 17 they were incrementally increasing their hours operations – a step in the right direction but not yet enough to provide the capacity needed to process increasing shipping flows.

NMPF Trade Policy staff is also continuing to build bipartisan support in Congress for the Ocean Shipping Reform Act (H.R. 4996), introduced on August 11 by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD). The legislation would address the unfair practices and charges implemented by ocean carriers.

The bill currently has 32 cosponsors, and NMPF is working to encourage additional members of Congress to sign onto the legislation. The bill was referred to the House Transportation and Infrastructure Committee, Subcommittee on Coast Guard and Maritime Transportation for consideration. A briefing paper on the legislation can be found here.

Congress and Maritime Commission Take First Steps on Ports

Posted on by Theresa Sweeney

NMPF welcomed bipartisan legislation introduced by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD) on Aug. 10 to address unfair practices and charges implemented by ocean carriers. The legislation, entitled The Ocean Shipping Reform Act of 2021 (H.R. 4996), was the result of a strong push from NMPF, the U.S. Dairy Export Council (USDEC), and a coalition of agricultural exporters.

The bill would increase the Federal Maritime Commission’s authority to oversee and regulate ocean carrier activities, expand the agency’ enforcement options and penalties against violations, increase transparency and accountability of the commission and ocean carriers, and provide new opportunities for exporters to seek redress from ocean carriers for violations.

NMPF, with cooperation from the U.S. Dairy Export Council (USDEC), worked closely with congressional offices as the legislation was drafted, providing detailed examples and economic impact analysis with critical input from NMPF and USDEC members. The legislation represents an important step forward, but much work remains to be done to see it passed by congress.

The House also increased enforcement funding by $525,000 in late July for the maritime commission in the Department of Transportation’s appropriations bill and directed the agency to enhance assistance to U.S. exporters and importers without hiring lawyers.

Supplementing this congressional action, the maritime commission finally responded to persistent calls from NMPF and other agricultural organizations for more proactive enforcement measures by launching an audit of ocean carriers’ billing practices on July 20. The commission on Aug. 4 asked eight ocean carriers to justify port congestion surcharges as part of its investigation into unreasonable detention and demurrage charges.

NMPF will continue to proactively advocate with the administration and Congress to pursue additional solutions to support and complement the congressional action, including an effort to drive a more comprehensive near-term response from the administration to the shipping crisis.

Dairy Industry Commends Introduction of Ocean Shipping Reform Act

Posted on by Theresa Sweeney

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) offered their support for bipartisan legislation introduced today by Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), the Ocean Shipping Reform Act.

The dairy industry, as well as other exporters, has faced substantially increased costs to ship their goods overseas, challenges obtaining containers and other equipment to deliver their goods to ports and beyond, and often incur booking cancellations or delays for vessel space. Owing in part to the Covid-19 change in American online orders, imports have affected vessel operations and container availability, diminishing export options for American dairy products. Ocean carriers have exacerbated this situation with high detention and demurrage charges, the increased shipment of empty containers back to Asia, and other unfair practices.

The Garamendi-Johnson legislation is the result of a concerted effort by NMPF and USDEC, along with other agriculture producers and exporters, to highlight the challenges U.S. exporters face with port congestion and the unfair practices and charges implemented by ocean carriers. NMPF and USDEC are urging Congress and the executive branch to take swift action to address these critical problems.

The Ocean Shipping Reform Act would provide new authority to the Federal Maritime Commission (FMC) to address unjust and unreasonable practices by ocean carriers. It would institute new penalties against ocean carriers and marine terminal operators for violations of the Shipping Act, require expanded public disclosure from the FMC and carriers, and establish a series of new regulations against unfair carrier practices.

The bill also offers new oversight of carriers’ charges and fees and will permit the FMC to dedicate collected penalties as restitution to impacted exporters. NMPF and USDEC appreciated the opportunity to work closely with both Congressional offices as the legislation was drafted and are pleased to endorse the bill.

“We are grateful for the bipartisan leadership from Congressmen Garamendi and Johnson in developing and introducing the Ocean Shipping Reform Act,” said Krysta Harden, president and CEO of USDEC. “Dairy producers and manufacturers have faced unreasonable costs and unfair practices from ocean carriers that negatively affect U.S. exports, increasing costs and putting at risk established trading relationships. This legislation will hopefully curtail those abuses and encourage better export-oriented behavior moving forward.”

“Dairy exporters have faced unfair detention and demurrage charges, unreliable and unfair booking practices and cancellations, and unwarranted challenges trying to obtain containers and other equipment,” said Jim Mulhern, president and CEO of NMPF. “While some of these challenges are due to Covid-19 changes in retail purchases, carriers have abused the situation to their advantage. Our members need the U.S. government to act, and we welcome the introduction of this legislation as an important, positive step.”

The economic effects from these challenges are significant – the average cost of transporting a container is estimated to have increased by approximately 200% over the past year, while the estimated impacts to dairy producers from just January to May 2021 include over $200 million in added shipping and related costs, approximately 10 percent of the export value during the same period.

This legislation represents an important step toward implementing both short and long-term solutions, yet NMPF and USDEC continue to urge the importance of additional measures as well to address the challenges plaguing U.S. food and agricultural exporters expeditiously and fully. The organizations urged Congress to swiftly approve the Ocean Shipping Reform Act while at the same time championing the need for additional administrative solutions that could be implemented more immediately to address the ongoing shipping crisis.