Farmers continue to struggle with export delays caused by ocean bottlenecks.
The U.S. Senate continues to look for supply chain solutions with a hearing on ocean shipping, but World Shipping Council CEO, John Butler says the solutions are sending mixed signals.
“On the one hand, the administration is pressing us to get customers to come to the ports and pick up their cargo so we can get it out of the way and move additional cargo, at the same time we have a house and expected senate bill that would restrict the ability to use detention and demurrage incentives to get that job done.”
Butler said there’s not a shortage of ships, just a backlog at ports. For Norman Krug, a Chapman, Nebraska farmer, the delays have dramatically increased shipping times to buyers around the world, including Tokyo, Japan, which used to only take 37 days.
“Currently there’s two issues one is the actual transit time now would be 60-90 days to get that product shipped but the bigger problem is that it takes 2-3 months to get space on the ship.”
His company, preferred popcorn ships to 70 countries, and for perishable foods, the delays are causing additional quality concerns for buyers.
“At 90 days in Japan recently they just said take that back we don’t want that popcorn. That popcorn had made it all the way to the coast and they were concerned enough about quality that we had to return, as painful as that was, those containers all the way back to chapman.”
He says his freight costs are up 30% from last year, on top of rising input costs to grow next year’s popcorn crop.
“The most interesting thing in this year’s negotiations for next year’s input costs, the coops are actually telling us to buy ahead and lock the price in, but additionally you should come and get it and store on the farm because it’s going to be such a tight supply.”
Later, in an exchange with Senator John Thune, who plans to introduce the Senate companion bill for the Ocean Shipping Reform Act, Krug said he supports the legislation and efforts to give the federal maritime commission more oversight for shipping.
Related:
Ocean Shipping Reform Act: a fix to shipping container delays
Biden’s Bottleneck Breakthrough: how the administration looks to get ag moving amid shipping crisis
Port congestion on west coast and in China continues to cause supply chain disruptions