Ocean Shipping Carriers:
It’s Time to Realign the Interests of Shippers and Ocean Carriers by D U S T Y J O H N S O N When the global pandemic hit our shores in 2020, peak of the pandemic when the backlog of ships at like a cog in a machine, America’s supply chain quickly the port stretched miles long. For context, the 2014 came to a halt. Outbreaks at processing plants stymied port congestion record was 48 total vessels, while production, dairy farmers were forced to dump milk, the 2021 backup record was 154 vessels. Import cattle producers slowed growth rates, and pork producers shipping rates from China to the U.S. for forty-foot had to cull production. containers have always been priced higher than These were just the shortcontainers being exported term effects. from the U.S. to China, but COVID-19 relief packages now it’s become financially bolstered social safety net advantageous for ocean programs – expanding welfare shippers to directly cancel program eligibility for millions export obligations. Spot of Americans. Stimulus checks rates remain near historic coupled with lockdowns highs for container shipping; allowed Americans to save more the boom shows no sign of money compared to historical ending. norms, leading to what we’re This unprecedented seeing today: increased backlog shifted the way spending on goods instead of foreign flagged ocean dining, entertainment, and other carriers do business. Instead services. of reloading at American Cue the long-term effects. ports to bring U.S. exports Port backups. Empty shelves. across the Pacific – ocean Delayed orders. Workforce carriers began turning shortages. Covid outbreaks. around with their empty Record-breaking ocean carrier containers, leaving U.S. profits. Inflation. exports stranded. Supply chain delays and Supply chain delays and While the largest ocean port backlogs impact all of us. It carriers saw profits more port backlogs impact all of does not matter whether you’re than triple in 2021, in just six us. It does not matter whether months, the U.S. dairy sector a business owner, consumer, or agriculture producer – we’ve all incurred nearly $1.3 billion you’re a business owner, felt the strain. in losses due to container consumer, or agriculture There’s been a lot of talk and availability issues. Valley producer – we’ve all felt concern about goods coming in, Queen Cheese, a South but this supply chain crisis is a Dakota dairy exporter, had the strain. two-front battle, with the second more than 2 million pounds being the delays and financial of sold and ready-to-ship losses American exporters are facing. lactose stuck in its warehouse because they couldn’t While COVID-19 has exacerbated issues with our get an empty container to take it overseas. Just this supply chain, a lot of these issues existed beforehand and week, dry pea and lentil processors are having 30have been worsened by outdated policy that encourages 50% of their bookings canceled without reason. bad behavior by ocean carriers. According to a survey by the Ag Transportation This bad behavior was brought to the forefront at the Coalition, agriculture exporters report that 22% of 6
RIPON FORUM February 2022
