Container shipping continues to be issue for IP exporters
By Specialty Soya and Grains Alliance
Nearly a year ago, the Specialty Soya and Grains Alliance sent out an alert that a crisis was taking place in containerized shipping of agricultural products. A major shipping line had told North American ag exporters that it would be halting their shipments in favor of returning empty containers to Asia to keep up with the high demand for consumer imports.
As this year’s harvest approaches, coinciding with the beginning of the peak season for holiday shopping, the shipping crisis is in no better shape than it was last October when SSGA first shined a light on the subject. The only difference may be that more and more people are aware of the issue as shipping delays and supply chain disruptions have affected not just ag but products of all kinds, from furniture to bicycles to computer chips.
When it comes to agriculture – notably SSGA-member exporters who ship non-GMO Identity Preserved soybeans and specialty grains abroad, often for food manufacture – the situation remains difficult. With demand that exceeds supply, exporters are scrambling to find containers – let alone containers in good condition – to fulfill orders from foreign customers. Meanwhile, they’re also dealing with increased freight rates, congested ports, delayed shipments and even cancelled bookings. Nothing may be more frustrating than the knowledge that so many of the containers that come to the United States full of consumer goods are going back across the ocean empty rather than filled with ag products, such as bags and totes of clean beans ready to be turned into tofu or soymilk.
Last month, during the U.S. Soy Global Trade Exchange & Specialty Grains Conference, which the Illinois Soybean Association sponsored along with seven other state associations, Commissioner Carl Bentzel of the Federal Maritime Commission appeared on stage for a session covering the shipping subject and said the supply chain hasn’t been this congested since World War II.
“We are, right now, at a crisis in ocean shipping as a result of things that went on over the last year,” he said, noting the continued surge in imports to the United States that followed an initial lull in the first half of 2020 due to the COVID pandemic.
Not long after SSGA sounded the alarm last October, the Federal Maritime Commission (FMC) launched an investigation into the practices of the ocean carriers to see if any are violating the U.S. Shipping Act, which prohibits them from unreasonably denying service to exporters. Since then, Congress has begun looking into the issue, and President Biden addressed it as part of his July 9 Executive Order, calling on federal agencies to strengthen their oversight and enforcement to maintain market competition and prevent unfair monopolistic practices.
“We’re appreciative that the Federal Maritime Commission, Congress and the president have been addressing this and are considering meaningful policy changes,” SSGA Executive Director Eric Wenberg said during a GTE press conference. “A draft of a bipartisan bill to reform the Ocean Shipping Act is now out, and SSGA is in support of these reforms that would provide relief to many of the challenges currently being experienced by ag container shippers.”
Last month, the Ocean Shipping Reform Act of 2021 was introduced in the House by Reps. John Garamendi (D-Calif.) and Dusty Johnson (R-S.D.). The act would authorize the FMC to address carriers’ unjust and unreasonable practices and institute new penalties for violations of the Shipping Act.
“Exporting companies who have been affected by these challenges want solutions,” Wenberg said. “We’re so grateful that Commissioner Bentzel appeared at the GTE to address people who have been directly impacted by this situation.”
The GTE was held both in person in St. Louis and on a virtual platform. About 300 people attended in person, and another 900 took part online.
Although U.S. soybean exports on a record pace in 2021, there remains a “staggering” demand for non-GMO soybeans, said Bob Sinner, SSGA chair and president of North Dakota-based SB&B Foods – all the more reason to get the freight lines unclogged as soon as possible.
“The demand currently exceeds supply,” Sinner said during the GTE. “Our customers have realized the benefits of sourcing these crops and their specific Identity Preserved qualities for food manufacturing because they have realized and seen how it improves their retail products and sales.”
SSGA and its members encourage their customers to plan accordingly, including forward contracting to secure supply. They’re also encouraging more farmers to consider adding Identity Preserved crops to their production.
“Farmers who have been involved in these programs have realized and appreciated the benefits of growing IP crops and the ability of producing for and working directly with the food industry,” Sinner said.
In the meantime, SSGA is doing all it can to raise awareness of the shipping crisis and seek ways to solve the challenges.
The Specialty Soya and Grains Alliance is the premier business association of U.S. companies focused on the production, processing and shipping of Identity Preserved soybeans and grains worldwide. SSGA’s missing is to provide resources that communicate the quality, diversity and availability of specialty soya and grains products.