The U.S. Department of Agriculture (USDA) announced new efforts to ease port congestion and restore disrupted shipping services for American farmers and agricultural producers.
The USDA said in a press release, it is partnering with the Port of Oakland to set up a new 25-acre “pop-up” site to make it easier for agricultural companies to fill empty shipping containers with commodities, like American soybeans, dairy, and specialty crops, such as nuts and fruit.
Fewer containers have been made available for U.S. agricultural commodities, as ocean carriers have circumvented traditional marketing channels and rushed containers back to be exported empty. As a result, many of these carriers have suspended service to the Port of Oakland.
USDA is now taking action to reduce these shipping disruptions that have prevented U.S. agricultural products from reaching their markets, said the agency in a press release.
“COVID-19 revealed vulnerabilities across our supply system, both at our ports and in the agricultural sector,” U.S. Agriculture Secretary Vilsack said. “As the economy has made a historical recovery, it has put additional strain on the supply chain. The Biden-Harris Administration uses creative approaches to improve port operations while elevating American-grown food and fiber. This partnership with the Port of Oakland builds on our aggressive approach to addressing challenges within the supply chain. It sends a strong signal that we are committed to working across the Administration and with state, local, and private partners to mitigate complex port capacity and congestion issues and to keep American agriculture on the move.”
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The site will provide space to prepare empty containers beginning in early March. Agricultural companies and cooperatives will have easier access to these containers, which they will fill with commodities, restoring shipping services to agricultural products while relieving congestion.
“As a major hub for the export of California’s and America’s fresh fruits, nuts, dairy, and frozen proteins, we appreciate the Administration’s efforts to ease shipping delays and costs for agricultural exporters,” said Port of Oakland Executive Director Danny Wan. “We’re in complete lockstep with the USDA on this issue, and we’re gratified by their willingness to work with us on behalf of Oakland’s export customers.”
The Port said USDA would fund 60 percent of start-up costs for Oakland’s export container depot. Agricultural exporters would have exclusive access to pre-cool refrigerated containers for perishable loading products. Best of all, the Port said, truckers can bypass marine terminals.
Agricultural exporters will also receive direct incentives from the USDA to utilize the pop-up yard.
“This creative partnership with USDA and the Port of Oakland will help American farmers and agricultural producers move their product to market while also making better use of empty containers that are causing congestion at the ports,” said the U.S. Transportation Secretary Pete Buttigieg. “After we helped set up inland pop-up ports at the Port of Savannah, we witnessed significant improvements in the flow of goods, and we expect to see similarly positive results once this Oakland facility is open. We look forward to engaging with other ports on similar solutions to congestion.”
Pressuring Ocean Carriers
In December, Secretary Buttigieg and Secretary Vilsack urged the world’s leading ocean carriers to help mitigate disruptions to agricultural shippers by restoring reciprocal treatment of imports and exports and improving service.
Ocean carriers have made fewer containers available for U.S. agricultural commodities, repeatedly changed return dates, and charged unjust fees as the ocean carriers short-circuited the usual pathways and rushed containers back to be exported empty. Many ocean carriers suspending service to the Port of Oakland exemplify the poor service and refusal to serve customers.
DOT and USDA called on the carriers to utilize available terminal capacity on the West Coast more fully. At least one carrier has since announced plans to resume previously suspended service to Oakland.
About the Partnership
Using Commodity Credit Corporation funds set aside to address market disruptions in September 2021, USDA will cover 60% of the start-up costs, reflecting the historical share of agricultural products marketed through the Port of Oakland. USDA will also help cover additional movement logistics costs at $125 per container.
This project will enhance the marketing of U.S. agricultural products through:
- Quicker pickup of empty containers as the main terminal is bypassed;
- Access to available equipment; and
- Fewer unpredictable congestion surcharges for trucks.