Sunday, July 25, 2021

Addressing A Disrupted Supply Chain

For the past several months, the National Cotton Council has conveyed to the Administration serious concerns over ocean carrier/terminal practices at our ports that are negatively affecting U.S. cotton flow.

gary adams, ncc
Gary Adams

■ What has been requested?

Early in the year, the NCC joined other groups on recommendations for the three major freight transportation modes to President Biden and later to Secretary of Transportation Pete Buttigieg. Regarding ocean shipping, which had changed vastly, the groups expressed their strong support of the Federal Maritime Commission’s investigation of ocean carrier/terminal supply chain disrupting practices at U.S. ports.

Among those were making containers unavailable to carry agricultural export cargo and canceling or refusing export container bookings. We emphasized that these maneuvers were increasing U.S. agricultural exporters’ costs and causing lost export opportunities.

After the situation worsened, the NCC joined nearly 300 agriculture and forest products companies/associations in requesting the Transportation Department’s immediate intervention to protect U.S. exporters and their access to foreign markets. That’s because these vessel-operating common carriers were neglecting to provide timely notice to shippers of carrier arrival/departure times and cargo loading times.

They then imposed hundreds of millions of dollars of punitive charges when the shippers missed those “loading windows.” These charges already had been determined to be unreasonable by the Maritime Commission.

The groups pointed out that these carriers specifically were delivering massive volumes of imported shipments to U.S. ports and then electing to leave without refilling empty containers with American goods and products.

Shipping containers filled with imported goods are normally unloaded, sent to rural areas, filled with agricultural commodities and then shipped abroad. However, the lucrative freight rates paid by the import cargo, combined with congestion and delay at ports on the West and East coasts were leading the carriers to immediately return empty containers to their overseas ports of origin.

As such, we urged the Transportation Department to assist the Maritime Commission in expediting its enforcement options and consider its existing authorities to determine how it could assist with the transportation needs of the U.S. exporters and the farmers and ranchers they serve.

■ Any other actions?

In a briefing to the Maritime Commission, the groups emphasized the importance of trade, especially to Asian markets, and noted the use of forward contracts necessitated timely shipping.

A letter to President Biden regarding the carrier/marine terminal operator actions stated that unless the Shipping Act and other tools available to our government are applied promptly, U.S. agriculture will continue to suffer financial losses and will be noncompetitive for years to come.

Nearly 100% of U.S. cotton production is exported as either raw fiber, yarn, fabric or finished product. Those exports were valued at $11 billion in 2019, the latest data available.

While the NCC’s export promotions arm, Cotton Council International, has and continues to work aggressively and creatively to expand foreign demand for U.S. cotton fiber and cotton textile products, the NCC will keep engaging with the U.S. government to restore the timely and affordable shipping of those products.

Gary Adams is president/CEO of the National Cotton Council of America. He also serves as president of the U.S. Cotton Trust Protocol.

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