Monday, January 17, 2022

Seeking A Smoother Supply Chain

Throughout 2021, the National Cotton Council engaged with the Biden administration and Congress on finding remedies to an economically debilitating supply chain situation.

■ What has been conveyed?

gary adams, ncc
Gary Adams

Early in 2021, the NCC, the American Cotton Shippers Association and other agriculture groups told the Federal Maritime Commission that U.S. transportation infrastructure is a key component of the U.S. cotton industry’s market competitiveness. We briefed the FMC on container shortages and the importance of trade — especially to Asian markets — and the use of forward contracts that necessitates timely shipping.

A letter to congressional members soon after conveyed concerns and suggested solutions regarding the three major freight transportation modes as Congress considered an infrastructure package.

More recently, the NCC described to U.S. Department of Agriculture officials the supply chain disruption’s unique, acute effect on cotton due to the:

• Importance of export sales.

• Exposure to increased storage, interest, insurance and other costs.

• Container use as the sole export shipment method.

• Reliance on Los Angeles/Long Beach ports.

We raised alarm over ocean carrier/U.S. port terminal practices that ignored the FMC’s demurrage/detention guidelines and limited containers for agricultural export cargo. We also weighed in on those that canceled or refused export container bookings and gave U.S. shippers no timely notice of changes.

We noted U.S. South Atlantic ports also faced stiff challenges and that a lack of adequate labor now is a significant supply chain constraint. We pointed out that accessibility to export containers has been further limited by record shipping costs and harmful surcharges — thereby limiting U.S. cotton’s ability to satisfy strong export demand.

containers waiting at the port
Declining accessibility to export containers has limited U.S. cotton’s ability to satisfy strong export demand.

The NCC also joined members of the Ag CEO Council/Agriculture Transportation Working Group in responding to President Biden’s executive order on America’s supply chains — saying the disruptions have led to “higher prices for inputs, lower prices for outputs and, in some cases, the inability to purchase goods or services regardless of price.”

The NCC participated with other groups on an open letter to the president urging the administration to continue investigating the causes of ports’ inefficiencies and to work on “minimizing the bottlenecks and operations practices that prevent the seamless movement of cargo through the supply chain.”

■ How about other transportation relief?

That open letter to President Biden asked for his leadership on surface transportation initiatives that could ease a crippling truck driver shortage and strengthen the supply chain.

They included implementing a young driver pilot program, promoting transportation/supply chain careers and providing flexibility in vaccine mandates/commercial drivers’ hours of service relief.

The NCC earlier had joined the National Cotton Ginners Association and other agricultural organizations in supporting proposed surface transportation legislation. This included amendments on modernizing both the agricultural exemption to HOS rules and the Farm-Related Restricted Commercial Driver’s License that is essential for farm-related service industries.

We also asked the Surface Transportation Board to implement two provisions to help address pervasive challenges faced by rail shippers, including poor rail service and unreasonable practices and rail rates, which have increased by 28% since May 2020.

Gary Adams is president/CEO of the National Cotton Council of America.

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