Compounded complications and how port logjam is affecting producers’ bottom line

The backlog at U.S. ports is disrupting nearly every aspect of the supply chain. We have been covering this issue all year, long before other media outlets picked up on it.

It started as a shipping container shortage back in February and it has since spiraled out of control. Let’s see the direct impact it is having one farmers’ and ranchers’ bottom lines.

Most of the problems started as consumers changed their buying habits during the pandemic, from buying services and going out, to purchasing a lot of goods online.

According to Farm Bureau economist, Danny Munch, “Now, when that happens, there’s much more demand for products that come in containers and on barges, which puts a lot more pressure on our ports.”

He says that America’s ports are limited by infrastructure, including the number of cranes and workers.

In turn, that limits the availability to process new shipments. “So, the more imports that you have, the more stress there’s going to be on those ports,” he explains.

Back in the winter and early spring, shipping companies were abandoning American cargo at west ports, and heading back to China in favor of more lucrative items like electronics. That left American goods sitting at ports, sometimes for weeks and months.

When you factor in the shift in consumer behavior, Munch says that it caused a mass amount or barges at all ports.

“We’ve seen massive upticks in waiting times for barges waiting at anchor. An additional thing just to touch on that labor related to trucking plays a major role in the ability for ports to process containers,” he states. “If there’s not trucks arriving on time, that creates just another compounding effect on the timing and processing of goods through the ports.”

Any disruptions in the supply chain will cause an increased price in inputs. Munch says that the supply chain issues now are impacting farmers and ranchers in a variety of ways.

“Farmers have already started to see massive increases in prices for their inputs. All of these ports are vital to farmers who use foreign outlets as a place to market their goods. So, any change in the ability to access containers impacts farmers’ bottom lines,” he adds.

Industry analysts say that despite moving west coast ports to 24 hour operations, the challenges could exist well into 2022.


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