McCarthy Fights for Ag Community, Joins Bipartisan Letter to Federal Maritime Commission Questioning Empty Cargo Containers
Today, Congressman Kevin McCarthy joined his colleagues in a bipartisan letter to Chairman Khouri of the Federal Maritime Commission (FMC) expressing concern over reports that certain vessel-operating common carriers (VOCCs) are declining to ship U.S. agricultural commodity exports from our ports.
California agricultural exports were valued at over $21 billion in 2019, which represents approximately 16% of total U.S. agricultural exports. California products are shipped around the world, but countries in Asia are the destination for more than $6 billion of California-grown produce and agricultural products. The VOCCs are an integral link between Californian agricultural exporters and their overseas customers, and actions that VOCCs take directly impact our communities, as Kern County and Tulare County are the top second and third largest agricultural producing counties in California, respectively. As many of these agricultural exports are from California’s 23rd Congressional District, swift action by the FMC to investigate VOCC compliance with U.S. shipping and other laws is critical for communities in the Central Valley.
Highlights of the letter are below, or you can read it in its entirety here:
“Over the past year, American producers, exporters, and entire economic sectors have grappled with widespread delays, bottlenecks, and increasing fees at our ports. These challenges are exacerbated by reports that VOCCs are delivering shipments to U.S. 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 U.S. economy, and simply unacceptable.
“The American agricultural sector, in particular, stands to be hit hard by the delays, congestion, and the reported discriminatory practices by VOCCs. With more than 20 percent of U.S. agricultural production aimed for export, reaching foreign markets is essential to American producers and the viability of our agricultural sector at large. It is cost prohibitive for producers of these agricultural commodities, particularly perishable products, to use alternative methods to fulfill overseas contracts in a dependable and affordable manner. Should it be found that VOCCs 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...
“Should the investigation reveal any wrongdoing, we urge the Commission to take appropriate enforcement actions to end such practices swiftly and decisively…Time is a critical factor and we urge the Commission to expedite its fact finding and consideration of enforcement options…”
Representatives from California’s agricultural industry issued the following statements on the congressional letter to FMC Chairman Khouri:
“Kern County is a major exporter of agricultural products and functionable supply chain management is key to maintaining strong commodity prices for our farmers and processors. The pandemic has illuminated inconsistencies in the supply chain and the KCFB appreciates the efforts to ensure fair and balanced system management of our ports and freighters by Leader McCarthy and Congressman Smith.” – John C. Moore III, President of the Kern County Farm Bureau
“To state that certain vessel-operating common carriers refusing to ship U.S. agricultural exports is concerning is an enormous understatement. Many agricultural products in Tulare County are heavily dependent on a thriving export market. The food production industry in general is still reeling from COVID disruptions to agricultural commerce. Many products in our county are perishable and the marketing window is small. Tulare County Farm Bureau and all the producers it represents, implore the Federal Maritime Commission to employ all available regulatory tools to improve and/or correct the situation swiftly.” – John Guthrie, President of the Tulare County Farm Bureau
"I appreciate Congressman McCarthy and his colleagues raising this important issue to the Federal Maritime Commission to solve, which will benefit all California agriculture. California is the world's largest producer of almonds and supplies about 80% of the global almond supply, exporting to nearly 100 countries. Our industry is reliant on a logistical infrastructure to get our products to our international customers. Port congestion and carrier cancellations are increasing our operational costs and generating severe service disruption. The consequences of this are costly. We need to resolve the ongoing issue of congestion at the ports, in particular the practices related to detention and demurrage charges, export container availability and container return practices. We need to continue our investments in our port system so that the US can remain competitive in the global marketplace.” – Elaine Trevino, President of Almond Alliance of California
“The tree nut industry in California is being devastated by the impasse at the West Coast Ports. From the inability to get our product out of California to our export destinations, to multiple re-bookings and cancellations, we are losing sales and market share every single day this debacle drags on. Adding insult to injury, our members are being hammered by ongoing demurrage and detention fees, storage fees, chassis fees, and now increased reefer surcharges. With 65% of the walnuts, 70% of the pistachios and 73% of the almonds being exported, this dire situation is literally crippling our industry. We need a resolution and we need it yesterday.” – Roger Isom, President/CEO of Western Agricultural Processors Association
“California dairy products are in extremely high demand due to their health benefits and value for the money. It’s a shame that this logistics nightmare is preventing food access across the globe. We urgently request the FMC to take immediate action to solve this crisis affecting food equity.” – Anja Raudabaugh, CEO of Western United Dairies