Congress says carriers are undermining US export trade

More than 100 members of Congress have written to Federal Maritime Commission chairman Michael Khouri expressing concerns about what they see as ocean carrier actions that are undermining US exports

Original article written by Eric Watkins, Editor at Lloyds Loading List 

The Federal Maritime Commission has received a further call from the US Congress to use the Shipping Act to address “unjust and unreasonable” ocean carrier practices resulting from the pandemic.

In a letter to commission chairman Michael Khouri, 111 members of Congress expressed their concerns over what they see as ocean carrier actions that are undermining US exports.

“We are writing you today to share our mounting concern over reports that certain vessel-operating common carriers are declining to ship US agricultural commodity exports from our ports,” they said.

The carriers serve as an “integral link between American producers and overseas customers, without which contracts cannot be met and the ability to compete in or even access foreign markets is threatened.”

While expressing appreciation for the steps already taken by the FMC to investigate these “alarming incidents”, the Congresspersons urged the commission to resolve the matter and to provide “monthly updates to Congress until the matter is resolved”.

They pointed out that American producers, exporters, and entire economic sectors have grappled with widespread delays, bottlenecks, and increasing fees at the country’s ports over the past year.

They said these challenges are “exacerbated” by reports that the ocean carriers are delivering shipments to US ports and then “electing to leave” without refilling empty containers with American goods for export.

“Such activity constricts entire supply chains and propels trade to move only in an inbound direction. These conditions are unsustainable for exporters, put significant strain on the US economy, and simply unacceptable.”

The US agricultural sector stands to be hit hard by the delays, congestion, and the reported “discriminatory practices” by the ocean carriers.

With more than 20% of US agricultural production aimed for export, reaching foreign markets is “essential to American producers and the viability of our agricultural sector at large,” they wrote.

It is cost prohibitive for producers of these agricultural commodities, particularly perishable products, to use alternative methods to fulfil overseas contracts in a dependable and affordable manner.

“Should it be found that vessel-operating common carriers are predatory or unreasonable in refusing to export these American agricultural products or imposing unreasonable fees, they must be held accountable by the commission for the harm they are causing our producers,” the lawmakers aid.

“Should the investigation reveal any wrongdoing, we urge the commission to take appropriate enforcement actions to end such practices swiftly and decisively.”

Members of the US Congress Transportation and Infrastructure Committee wrote to the FMC expressing similar concerns about disruptions in the maritime supply chain resulting from the pandemic and about many ocean carriers prioritising higher value foreign imports over US agricultural exports.

They said the pandemic has “completely upended” the shipping industry, resulting in “severe backups at ports and disrupting every link in the maritime supply chain.”

2021-03-15T16:14:21-04:00March 15th, 2021|Exporting, Global Trade|