The Port of Oakland, in collaboration with California and federal officials, is redoubling efforts to remove hurdles making it difficult for agriculture exporters to reach overseas markets.
The port authority announced Monday it is setting up a 25-acre staging area on port property where empty containers can be stacked and made available for rapid access by exporters, partnering with state and federal agencies to promote the facility and reiterated calls for ocean carriers to restore service to Oakland.
The port could open and operate the near-dock facility as soon as March, spokesperson Marilyn Sandifur said in an email. The goal is to increase efficiency and convenience by speeding up equipment turns outside crowded marine terminals so truckers don’t have to wade through traffic to pick up a shipping box.
Officials said California and federal agriculture agencies will promote the new yard and encourage exporters to take advantage of it.
Other ports, such as Long Beach, have also set up overflow yards on vacant land to provide temporary storage for loaded imports and, to a lesser degree, empty containers. The ports of Savannah, Georgia, and Oakland are notable in setting up dedicated yards for empties.
The Port of Oakland is one of the largest U.S. gateways for agriculture exports, especially from northern California, the Pacific Northwest and the Great Plains. Nationally, the ratio of import loads from Asia versus exports was about 2.5-to-1, but during COVID the imbalance has increased to about 4-to-1, according to maritime experts. Oakland differs from most ports in that it normally has a balanced mix of two-way traffic that enables better matching of equipment and cargo.
Exporters frustrated
Produce and protein shippers, however, complain they have lost business since the pandemic because of shipping lines’ pro-import policies that have stranded large amounts of perishable cargo at ports and inland depots. Imports have always been more profitable for carriers, which typically accept exports to cover the cost of recirculating equipment back to manufacturing centers. But with trade demand to North America swamping available capacity, carriers have been able to hike market rates six to 10 times higher than normal, making it an easy call to quickly get empty containers back to origin rather than let them drift to inland agriculture communities to be loaded and returned to the seaport.
During the past year, many container lines opted to unload all their cargo in Los Angeles and Long Beach after long congestion-related delays and skip scheduled stops in Oakland to get back to Asia as fast as possible. The Port of Oakland last year experienced a noticeable drop in export volume due to blanked sailings and lack of equipment for export cargo.
The decline in export capacity spurred state and port officials, with the encouragement of the Biden administration, to convene meetings with farm producers and logistics providers on ways to facilitate outbound goods movement. The meetings were led by Dee Dee Myers, who heads California Gov. Gavin Newsom’s Office of Business and Economic Development, state Transportation Secretary David Kim and Secretary of Food and Agriculture Karen Ross.
John Porcari, the White House’s liaison on supply chain issues to the port community, has been actively involved in the talks as part of administration efforts to minimize merchandise shortages and inflation due to shipping delays. Porcari’s team is also working closely with the twin ports in Southern California, as well as Savannah, to remove red tape that might slow new programs and press stakeholders to compromise for the greater good of freeing up the supply network.
In mid-December, Biden administration officials urged ocean carriers to accept more export freight and restore service at underutilized West Coast ports to ease supply chain constraints and give U.S. agriculture companies a fair chance to sell their goods in overseas markets. The secretaries of transportation and agriculture wrote a dozen foreign-owned container lines asking them to treat imports and exports equally, utilize less-congested ports, such as Oakland and Portland, Oregon, and provide better service to exporters.
The Ocean Shipping Reform Act of 2021, passed by an overwhelming majority in the House last month and endorsed by the White House, would prohibit carriers from declining U.S. exports within a reasonable time frame.
“We need the shipping companies to immediately restore the export lines from Oakland to Southeast Asia and the Indian subcontinent,” said Port of Oakland Maritime Director Bryan Brandes.
Watch shipping expert Jon Monroe discusses shortage of empties
Officials say Oakland should be a draw for carriers and importers because it is relatively congestion free compared to the massive LA-Long Beach port complex.
Oakland’s vessel traffic increased in November, contributing to a 6.5% increase in imports following midyear cancellations by carriers. Some large importers chartered their own ships in November to reach Oakland and avoid delays in Southern California. Oakland’s exports declined 9.4% in November and 27% in October compared to 2020 because there weren’t enough ships heading to foreign markets. Increased vessel traffic is expected to provide more cargo space for exporters.
In November, the world’s sixth-largest container vessel operator, Ocean Network Express (ONE), reinstated a trade route connecting Oakland to Tokyo and the Chinese ports of Shanghai and Ningbo. The PS5 service also calls Los Angeles.
The move was prompted by high demand in Japan for U.S. meat products, according to Oakland officials, but also helps importers of Chinese-made goods.
Recently, Yang Ming and CMA CGM also announced they will restore service to Oakland.
The Agriculture Transportation Coalition helped bring three of the largest refrigerated meat exporters in the U.S. and five of the largest importers, including Amazon and Home Depot, to the talks to convince ONE that there was strong demand for an Oakland service, Executive Director Peter Friedmann said at an industry gathering of logistics professionals in Palm Springs, California, during October.
The AgTC for months has vociferously called on the federal government to stop ocean carriers from denying equipment availability in the nation’s heartland, saying the transportation shortfall is harming farm businesses.
Click here for more FreightWaves/American Shipper articles by Eric Kulisch.
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