“Containergeddon” Results in $2.1B Loss to California Farmers

The supply chain gridlock and shipping container shortage has resulted in California agriculture losing an estimated $2.1 billion (or 17 percent), according to a recent study released by the University of California, Davis.

The report cites that from May to September 2021, the monthly number of containers loaded with agricultural products declined by 18 percent out of Los Angeles, 15 percent out of Long Beach and 34 percent out of Oakland. For context in September 2021, California’s ports exported about 25,000 fewer containers filled with agricultural products than in May 2021, a 22 percent decline.

The results of the findings concluded that “financial damages suffered by California agriculture from the supply chain disruptions exceed the industry’s losses from the 2018 U.S.-China trade war” and “some importers now view California as an unreliable supplier of agricultural products due to inferior port infrastructure.”

Additional key topics covered in the report include the following:

• data of demand shock and port congestion
• figures demonstrating California agriculture trade effects

Western Growers has been tracking the transportation and logistics bottleneck when it first started to occur and carried out a series of actions to ease supply chain issues. These advocacy efforts include the following:

• Lobbied for the House passage of the Ocean Shipping Reform Act (more below), which received strong bipartisan support and will help secure better marine shipping transparency and fairness for ag exporters. WG continues to work on its progress through the U.S. Senate.
• Signed onto several industry letters to government officials that lay out specific proposals for short, medium, and long term relief measures, including empty container repositioning, restored ship service to the Port of Oakland, and various regulatory relief to ease the congestion.
• Successfully secured an in-depth oversight hearing on the crisis from the U.S. House Committee on Transportation and Infrastructure, which brought lots of awareness to the ag community’s concerns.
• Participated in state government roundtables as an agriculture representative to discuss the challenges and possible solutions
• Holding frequent and ongoing conversations with the White House, U.S. Department of Agriculture, U.S. Department of Transportation, and the Newsom Administration

Resources

• UC’s “’Containergeddon’ and California Agriculture: Report (pages 1-4)
• Long Beach Assemblymember Patrick O’Donnell on the Supply Chain Bottleneck: Article
• Supply Chain Chaos Causing Quite the Freight: Analysis
• Ocean Shipping Reform Act of 2021
  • Western Growers Celebrates U.S. House of Representatives Passage of the Ocean Shipping Reform Act of 2021: Statement
  • Western Growers Supports Garamendi-Johnson Bill to Address Ocean Shipping Challenges and Reforms: Story
• Five Points to Know about the Ongoing Port Crisis: Analysis

**If your business is having problems with exporting – including high detention/demurrage or other questionable fees, excessive delays or cancellations, and carrier unresponsiveness – please contact Tracey Chow (tchow@wga.com, 202-704-7312)