WASHINGTON – The North American Meat Institute (NAMI) is sounding the alarm about an ongoing crisis with the containerized ocean shipping business that is affecting exports of US meat and poultry. The Institute urged Congress and Secretary of Agriculture Tom Vilsack to take action to mitigate delays and congestion at US ports.
The Meat Institute underscored stakeholder concerns in testimony provided to the House Committee on Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation.
The volume of goods coming into the United States, and demand for shipping containers is overwhelming, according to the Agriculture Transportation Coalition. However, ocean carriers decline to carry US agriculture commodity exports and instead return empty containers to Asian markets to fill them with more lucrative consumer goods to export back to the United States, NAMI said.
“What happens? The freight rates that the ocean carriers are able to charge go up,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition, during an April 13 presentation at the North American Meat Institute’s virtual Meat Industry Summit. “So, the ocean carriers are making hundreds of millions of dollars more. This is the most profitable year in history for the ocean carriers.”
NAMI described the detention and demurrage fees assessed on US importer and exporters by ocean carriers and marine terminal operators as “excessive and unreasonable.” Importers and exporters are charged the fees for failing to either retrieve a container from a marine terminal or return one within a specified amount of time, even if delays in retrieving or returning containers are beyond the control of the importer or exporter.
“Failure to hold these carriers accountable could have long-lasting, detrimental effects for the trade-dependent US meat and poultry industry and agriculture sector which has caused $1.5 billion in lost revenue,” said Julie Anna Potts, president and chief executive officer of the Meat Institute. “If current ocean carrier practices persist, and are not subject to oversight, then the US meat and poultry industry, its workers and the communities it supports will struggle to access these vital markets that have been cultivated over decades.”
According to estimates by the US Department of Agriculture, the $141.6 billion in US agricultural export value in 2019 generated an additional $160 billion in economic activity for a total of $301.6 billion in economic output.
The Meat Institute warned that foreign customers will turn to other suppliers if US companies cannot deliver meat and poultry affordably and dependably to them.
“Asia accounts for a significant portion of US meat and poultry trade, with China, Japan, and Korea among the top markets for both beef and pork annually,” the Meat institute said. “The US meat and poultry industry has earned the reputation of being a reliable supplier of safe, high-quality products to these export markets.
“But the European Union, Australia, and countries in South America are ready to fill the void left by the US’s absence — an absence resulting directly from ocean carriers’ nefarious actions. Once foreign competitors seize previously held US market share, it becomes increasingly difficult, if not impossible, to recapture the same level of hard-earned access.”
Read the Meat Institute’s full testimony here.