From FreightWaves, February 3:
US regulators under pressure to intervene on behalf of exporter
A war of words is heating up over U.S. exports, particularly food exports — and the outcome of that clash could affect U.S. containerized imports as well.
Reports first surfaced in late October that carriers were rushing containers back empty from California to Asia to serve lucrative headhaul trades instead of loading U.S. export cargoes.
Federal Maritime Commission (FMC) Chairman Michael Khouri warned in December: “We are looking into all potential responsive actions, including a review of whether ocean carriers’ actions are in full compliance with the Shipping Act.”
California government officials informed the FMC last Thursday that “the operations of our agricultural sector, which relies heavily on export markets, are being heavily affected.” They blamed carrier practices “related to detention and demurrage charges, export container availability and container-return practices.”
California officials asked the FMC to compel carriers to suspend or reduce detention and demurrage charges, cancel congestion surcharges, and enhance notifications on empty-container receiving locations.
The World Shipping Council (WSC) and the Pacific Merchant Shipping Association (PMSA) countered that the proposed cure is worse than the disease.
In response to California’s letter to the FMC, the shipping groups responded on Tuesday that “the adoption of these proposals would make congestion and intermodal equipment availability worse, not better.”
Exporters face ‘terrible’ situation
“Imports into the U.S. are at an all-time high but exports are dropping like a rock,” said Flexport Vice President Anders Schulze during a webinar last week. “The ratio of U.S. imports to exports is increasing to a level we’ve never seen before — it’s now more than 3 to 1.”
Consultant John McCown recently analyzed import and export flows through the top 10 U.S. ports. He found that the year-on-year change in the three-month trailing average as of December was up 22% for imports and down 4% for exports. The divergence is “striking,” said McCown.
Bloomberg reported that the global food trade is being “upended by the container crisis.”
It said that the competition for scarce containers is not only impairing food exports from America, but also from Thailand, Canada, India and Vietnam.
American Shipper asked Agriculture Transportation Coalition (AgTC) Executive Director Peter Friedmann about the current situation for exporters during an interview on Wednesday. “It’s terrible,” he responded. “Terrible as in losing sales, losing customers and losing profits after you pay significant penalties when you don’t deliver on time.
“A number of members [of Congress] are set to take action,” asserted Friedmann, who said that the crisis has led to “upset [FMC] commissioners, upset exporters, upset governors and upset congressmen.”....
....MUCH MORE
