In recent weeks, Western Growers has become aware through direct member communication and media reports that significant exporting issues are arising and impacting agricultural exporters. The current situation is being felt throughout the West Coast, with the Los Angeles and Long Beach ports experiencing the worst of it.
Based on current reports, there is a perfect storm of conditions that is creating an increasingly difficult export environment for the agricultural industry: a surge of Asian imports tying up significant container space, particularly as we enter the holiday season; more lucrative freight rates for carriers to move Eastbound imports over Westbound exports; and loading and unloading slowdowns due to COVID-impacted labor constraints. More egregiously, carriers are increasingly opting to ship empty containers back to Asia at the expense of leaving U.S. agricultural shipments stranded.
Exporters are also experiencing:
- Existing bookings getting delayed or cancelled outright
- New bookings not being taken
- Imposition of costly and unjustifiable detention or demurrage (D&D) fees
- Skyrocketing spot rates and general rate increases (GRIs)
- Lack of timely communication from carriers and terminals regarding scheduling changes
This situation remains fluid with no clear end in sight. Carriers have begun indicating that such exporting constraints and inefficiencies could last until mid-February or early March.
WG ACTION: Western Growers is tracking the situation closely while working with allies to identify solutions or relief measures. Most recently, WG cosigned a letter to the Federal Maritime Commission (FMC), urging it to use its authorities to suspend D&D fees and ensure carriers are not imposing them beyond existing justifiable parameters.
MEMBER ACTION: For members with exporting business, we encourage you to remain diligent in planning ahead and consider the following actions:
- Review carrier agreements for equipment type and availability along with free time and early return dates. Communicate early as possible with carrier representatives and/or customer service about their shipment schedule for the upcoming weeks/months.
- Be as flexible as possible with container type. For example, 20-foot containers are in short supply for some ocean carriers, so they may be able to offer 40-foot or dry reefer containers.
- Communicate early with drayage carrier (e.g. trucker) about equipment needed and delivery dates. Some may have street turn agreements and can assist with equipment type requirements.
**If your business is experiencing exporting issues, including booking cancellations or increased D&D fees, please contact Tracey Chow ([email protected] or 202-704-7312)
