Shipping carriers rejected U.S. agricultural export containers worth hundreds of millions of dollars during October and November, instead sending empty containers to China to be filled with more profitable Chinese exports, a investigation found.
The Federal Maritime Commission has received petitions from U.S. agricultural exporters warning that the delays in trade not only threaten profits but the reputation of the industry.
The commission, in turn, launched an investigation and is reviewing the trade data out of key ports in California, New York and New Jersey to see whether the carriers’ refusal to load U.S. export cargo was a violation of the Shipping Act.
The act makes it unlawful for carriers to “unreasonably refuse to deal or negotiate,” “boycott or take any other concerted action resulting in an unreasonable refusal to deal,” or “engage in conduct that unreasonably restricts the use of intermodal services.”
The denial of trade recently forced Sinner to send through air freight 6 metric ton bags to his customers in north Asia to meet their needs.
The denial and delay of agricultural exports can also be tracked by truck.
Containers are piling up in the yard of Knight Port Logistics, which transports cotton, scrap paper, scrap plastic and scrap metal, according to the company’s director of exports, Kyle Layne.
“Cotton exports are being rolled over for weeks and you can’t find export bookings for scrap metal and scrap plastic exports,” said Layne. “These containers are on chassis which is adding to the chassis shortage.”
Record Chinese import volumes in Los Angeles and Long Beach, coupled with the slowdown out of Los Angeles in moving containers off vessels, have added to the empty export problem.
“We have had to sit on containers for months,” said Layne. “Right now, we have over 600 total containers in our possession and about half of them are currently sitting in our yard just a few miles from port.” At most, in a normal trade environment, there are 100 to 150 containers, he said.
“The loaded containers are mostly U.S. exports that we are trying to still turn in to the port,” he added.
Layne said the problem facing the return of these U.S. exports is the lack of appointments at the terminal, which coordinates with the carriers in loading the exports.
“The ratio of our import/export business is typically 70/30. Now it’s 90/10,” he said. “Exports are down around 30% for us for the end of 2020. We have seen a 15% decrease in exports volume. It is easier for us to get an empty container into the Los Angeles terminal than a U.S. export.”
