Ag groups want to end port disruptions
FARGO, N.D. -- West Coast port disruptions are becoming a dire situation for U.S. agriculture. A coalition of 61 ag groups, including several with members in Minnesota and the Dakotas, have appealed to President Barack Obama to take decisive acti...
FARGO, N.D. -- West Coast port disruptions are becoming a dire situation for U.S. agriculture. A coalition of 61 ag groups, including several with members in Minnesota and the Dakotas, have appealed to President Barack Obama to take decisive action to override a labor impasse.
The national Agriculture Transportation Coalition members held a press conference in Seattle on Nov. 25 to ask for action to end the disruption in exports of a host of container-shipped ag products, including Christmas trees, potatoes and apples. Foreign customers are cancelling orders and turning to other countries to fill them, says Peter Friedmann, director of the coalition.
"The consequences are being felt throughout the country," Friedmann says. "The railroads are unable to bring agriculture products from the Midwest to the Pacific Northwest ports because of the labor slowdown at the ports."
Friedmann notes the International Longshore Warehouse Union and the Marine Terminal Operators had failed to make a deal in June, and now farmers and processors of agricultural exported products are paying the price.
"At the same time, the ocean carriers are passing on their increased cost by imposing draconian congestion surcharge fees on the U.S. exporter, who cannot pass them to the customer," he says.
Damage is profound
Friedmann says the damage to the U.S. economy is profound and agriculture is especially hurt because it is the largest export from the U.S. His coalition includes numerous regional groups, including the Minnesota Soybean Growers Association and the Midwest Shippers Association.
Bob Sinner, president of SB&B Foods of Casselton, N.D., a member of the Ag Transportation Coalition and the Midwest Shippers Association, and an exporter of food-grade soybeans to Asian markets, tells Agweek the BNSF railroad ramps in St. Paul, Minn., have been closed for Seattle and Tacoma destinations. He says the disruptions have caused his company to halt processing operations at times.
"We've been using the (Canadian Pacific) Railway at the Port of Vancouver. Other shippers have been sitting and waiting," he says. Sinner says the disruption surcharges are $800 to $1,000 per 40-foot container, which is a considerable expense.
"Everybody's crying foul," Sinner says.
The Federal Maritime Commission intervened and the surcharge was postponed or suspended, and instead the shippers issued a general rate increase for Dec. 1.
"It's a mind-boggling mess," Sinner says.
Friedmann says it's understandable the railroads embargo west-bound trains to the PNW because the ports are not functioning at normal levels.
"Containers are stacking up; there's no place to put them," he says.
Obama has said only that his people are monitoring the situation.
"Our point is that the time for monitoring is long past," Friedmann says. "This is the time when the president can and should use his executive authority to intervene and get these terminals working again."
Bulk flow related
Bob Zelenka, executive director of the Minnesota Feed and Grain Association, says some of his members have been mixed up in the container-loading debacle. The rest have problems with railroad traffic.
Zelenka says the early closure of the Mississippi River upper locks and dams because of freezing will shift freight onto already strained rail lines.
"We're anticipating we might see some increased rail rates because of that, but we haven't heard of that so far," he says, adding there had been a "rush to move grain to the river" when rail service declined.
He says the river terminals opened late, were shut down during the year because of high water and siltation dredging, and then closed early.
"We certainly didn't get the full use of the river this year that we'd hoped, especially facing the rail problems."
Zelenka says any delays in moving ag products to the Pacific Northwest, especially with the onset of winter will add concerns about congestion for bulk grain shippers. He says lower commodity prices recently have meant farmers are holding back on crop sales, putting less pressure on the system.
"Movement of grain has been rather slow, with farmers waiting for prices to improve," he says, but adds that will change. "They have loans to pay."