U.S. AGRICULTURE SHIPPERS WARN OF DAMAGE FROM CONGESTION SURCHARGES

U.S. AGRICULTURE SHIPPERS WARN OF DAMAGE FROM CONGESTION SURCHARGES

   'U.S. agriculture shippers have asked ocean carriers to refrain from imposing “congestion surcharges” to compensate for losses experienced during the West Coast port labor strife.

   The new surcharge could cost U.S. agricultural shippers as much as $1,000 per container, effectively doubling the transportation costs for some companies exporting commodities to Asia and Europe.

   “Should carriers proceed with the congestion surcharge, the ramifications for U.S. agriculture will be devastating,” said Peter Friedmann, executive director of the Washington-based Agriculture Ocean Transportation Coalition in an “open letter” to the ocean carriers. “The uncertainty of the implementation of this additional cost is already forcing foreign buyers of U.S. agriculture to seek other non-U.S. sources.”

   The letter cited numerous examples of changes to U.S. agriculture commodity shipping.

   “The recent increases in local corn prices in Taiwan, a result of the West Coast port disruption, led to the lifting of Taiwan’s longstanding ban on PRC (Peoples Republic of China) corn,” Friedmann said. “U.S. corn exports will suffer as a result, perhaps, permanently.”

   Another example involved Scandinavian importers canceling orders of California dried fruit and European supermarkets threatening to make claims against these importers for late deliveries.

   Other U.S. agriculture exports affected by the recent West Coast port labor strife include meats and hay to Japan, french fries to South Korea, poultry to Hong Kong, rice to Taiwan, and Christmas trees to Asia.

   The AgOTC applauded those ocean carriers that have refrained from imposing congestion surcharges.

   “The sooner carriers retract their notice of implementation of the congestion surcharge, or declare that they will not impose such a burdensome fee, the better it will be for U.S. agriculture and the U.S. economy,” Friedmann said.

   The AgOTC will track the status of the congestion surcharge and notify its members of retractions or declarations from the carriers. Carriers are requested to notify the AgOTC of their surcharge activities by e-mail at AgOTC@aol.com.