Transportation Roundup: Container congestion continues

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Supply chain, transportation problems continue to hamper SSGA member companies

As we head into a third year since COVID first began disrupting our supply chains, transportation problems have not subsided for SSGA member companies. Container and chassis availability and booking delays continue to rank high among the issues facing exporters.

“We can’t get bookings,” said one manufacturing company’s shipping team leader. “Sometimes there are no containers or there are containers and no chassis.”

The company reports being “ghosted” by one global shipping company, meaning it has not responded to their requests for service. Other issues include bookings being unavailable to certain countries, booking times stretching from two weeks to six weeks – “if we’re lucky, if a container is there” – to paying exorbitantly high premiums to secure truck drivers.

The company, like many of those that ship agricultural products, is looking for answers and turning to SSGA for help. SSGA is happy to write letters on behalf of a company or group or put them in contact with officials such as a state department of transportation.

SSGA and its Competitive Shipping Action Team wants to hear your concerns, as well as your ideas, so we can work to find real solutions and educate officials and influencers and facilitate real change. Please stay in touch.

Chinese lockdowns, back-to-school season cause more container congestion

One in five of all container ships are waiting outside of ports, according to the latest data from Windward. Chinese COVID-19 lockdowns have been named the biggest factor for the congestion. One quarter of these vessels are delayed at Chinese ports, a number 195% more than what it was in February. Read more about the report here.

This backlog of Chinese freight, coupled with earlier back-to-school imports, has the ports of Los Angeles and Long Beach bracing for another cargo surge.

School merchandise typically arrives at ports in May, but last year’s import backlog has retailers bringing in product as early as they can to prepare for back-to-school season. Read more from the Journal of Commerce here.

Two Chinese carriers shipping more empties than loaded containers

CNBC analysis of 2020 and 2021 container data found that two Chinese carriers, OOCL and its parent company, COSCO, shipped more empty containers than loaded out of the Port of Los Angeles.

OOCL recorded a 35.1% decrease in loaded containers and a 104.1% increase in empty containers, while COSCO transported 4% more loaded containers and 1-4.6% more empties.

The analysis was completed with data the Port of Los Angeles, Port of Long Beach, U.S. customs and HIS Markit PIERS import export data. Read CNBC’s full report here.

Almond industry struggling to transport crop

Scott Phippen’s almond warehouse in California is stuffed with 30 million pounds of leftover almonds from last year’s harvest, waiting for container ships to transport them to Asia, the Middle East and Europe. The same is true for more U.S. agricultural exporters. Read more from the NY Times here.

Abbe steps down as SSGA adviser

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Bruce Abbe, the longtime leader of the Specialty Soya and Grains Alliance’s (SSGA) predecessor organization, has stepped down as SSGA’s strategic adviser for trade and transportation.

Bruce AbbeSSGA is grateful for Abbe’s service as it has grown into a national business organization.

Abbe has been in his advising role since SSGA was formed in 2019 as a merger between Midwest Shippers and the Northern Food Grade Soybean Association. Abbe was the president and CEO of Midwest Shippers for more than a decade prior to the merger.

“Bruce showed me the path ahead when I became director of SSGA three years ago,” said Eric Wenberg, SSGA executive director. “He has been a constant adviser and friend as we took on more and bigger tasks. What I understand about intermodal shipping comes from him.”

Abbe has more than 35 years of professional experience in public affairs, communications, trade promotion and organizational management for agricultural business organizations. In 2020, he received the William K. Smith Distinguished Service Award for outstanding leadership and contributions to private sector freight transportation from the University of Minnesota Center for Transportation Studies. Later that year, SSGA awarded him with its first SSGA Alliance Honor for Advancing Transportation.

SSGA will continue to lean on Abbe’s expertise in training, presentations, events and projects as it looks to update the advisory position. SSGA has truly grown into an organization that tackles shipping and transportation issues at a national level. As SSGA conducts a search, Katelyn Engquist will be the staff lead for SSGA’s Competitive Shipping Action Team on behalf of chair Darwin Rader. The action team follows and listens to major concerns of SSGA members seeking container supply chain solute ions and solutions to other present-day problems, as well as educates customers about container shipping in order to build a brighter future for intermodal exports of high-quality grains and oilseeds.

Please wish Bruce well and express your thanks, as we do to him at bruce@abbecommunications.com. For more information on SSGA’s Competitive Shipping Action Team, reach out to Katelyn at kengquist@soyagrainsalliance.org or Darwin at darwinr@zfsinc.com.

SSGA applauds Senate passage of Ocean Shipping Reform Act

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The Specialty Soya and Grains Alliance applauds the United States Senate for passing its version of Ocean Shipping Reform Act.  

The bipartisan bill, co-sponsored by Sens. Amy Klobuchar (D-Minn.) and John Thune (R-S.D.), was passed by unanimous consent on Thursday. It would provide the Federal Maritime Commission with new, additional enforcement authority, ensure a more competitive global ocean shipping industry and provide relief to U.S. exporters, including SSGA-member agricultural exporters, who have struggled with significant supply chain disruptions over the past two years.

“Our members and others have been waiting for the hope of relief,” SSGA Executive Director Eric Wenberg said. “We have been consistently messaging that we’ve needed it, and we thank Sen. Thune and Sen. Klobuchar for their leadership on this matter. We believe in the Federal Maritime Commission’s ability to act on behalf of U.S. companies, and this reform will give FMC the tools it needs.” 

The U.S. House of Representatives passed its version of Ocean Shipping Reform Act in December. The bill now goes to conference committee to work out differences between the two bills.  

“This needs to pass the House and Senate conference with speed so a workable bill that provides relief gets sent to President Biden’s desk as soon as possible,” Wenberg said. 

The Senate bill provides FMC with additional enforcement tools to address unreasonable and unfair ocean carrier practices that have been harmful to U.S. exporters, including prohibiting carriers from unreasonably declining opportunities to U.S. exports. 

In a statement, Thune said, if passed, the act “would level the playing field for American farmers, exporters and consumers by making it harder for ocean carriers to unreasonably refuse goods that are ready to export at U.S. ports.” 

Added Klobuchar: “Congestion at ports and increased shipping costs pose unique challenges for U.S. exporters, who have seen the price of shipping containers increase four-fold in just two years, raising costs for consumers and hurting our businesses.” 

SSGA has supported passage of the Ocean Shipping Reform Act and was among the first groups to sound the alarm on the supply chain crisis in October 2020 and has continued to work on behalf of its members who export high-quality, Identity Preserved grains and oilseeds to help them meet the needs of their overseas customers. 

Lack of service, carrier cancelations, delays and rising freight rates and fees have “reached a condition critical situation,” said SSGA Chairman Rob Prather, chief strategic ambassador for Iowa-based Global Processing, affected business and have had a human toll, as well, causing hardships to logistics staffs, farmers, truckers, suppliers and customers both in the U.S. and abroad. 

“This isn’t just a global supply chain issue; it’s a global food supply security issue,” Prather said. 

Transportation Go! brings ag shipping industry to Milwaukee

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Agricultural transportation has myriad challenges, no matter the mode of movement, and representatives of all points on the supply chain gathered in Milwaukee, Wisconsin, last week to discuss issues and look ahead to the future.

“The most important thing is open and continuous communication, and that’s what this conference is,” said the conference’s emcee, Dr. Richard Stewart, professor at the University of Wisconsin-Superior and director of the university’s Transportation and Logistics Research Center. “We need to continue this conversation at every level we can.”

The conference, being in the home city of Port Milwaukee, focused on the Great Lakes and the St. Lawrence Seaway system, an area of great growth potential for ag exports, especially with many infrastructure investments and developments underway.

Federal Maritime Commission Chairman Dan Maffei, Surface Transportation Board member Robert Primus and MC Richard Stewart

Federal Maritime Commission Chairman Dan Maffei, Surface Transportation Board member Robert Primus and MC Richard Stewart

“We want to grow the options the shippers have out of this region,” said Peter Hirthe, international trade specialist for the Great Lakes St. Lawrence Seaway Development Corporation. “There are some exciting developments. We have the capacity. We have the investment.”

Transportation Go! featured a robust agenda with presenters from Great Lakes ports, as well as those representing ocean shipping, railroads, intermodal trucking and national commodity groups.

Daniel Maffei, chairman of the Federal Maritime Commission, and Robert Primus, member of the Surface Transportation Board, were part of a spirited discussion about finding solutions to challenges such as container availability, from rail to sea, including a bipartisan Ocean Shipping Reform Act currently making its way through Congress. (A House version has been passed, while a Senate version was introduced last month.)

“I’m taking all this stuff back to Washington, and everything I believe I can do I’m going to do,” Maffei said.

Maffei testified to a Senate committee prior to going to Milwaukee and announced that FMC’s audit team will expand its scope to get information from carriers on their handling of exports and how to do better. Also, FMC’s Bureau of Enforcement is prioritizing cases involving exports.

Primus touted the U.S. rail network but said there are concerns about the lack of good, reliable service and those problems have affected customers including Transportation Go! attendees.

“Everyone who attended Transportation Go! appreciated the opportunity to share and discuss transportation challenges and solutions,” said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance, which hosted and organized the event. “Having speakers like Dan and Robert there to talk to ensured that everyone left the conference looking forward, not back, with action items to advance ag transportation.”

In a recap of the “bright ideas” that came out of Transportation Go! Jason Tutrone, transportation attorney with Thompson Hine, said: “This is really an opportunity for us to strengthen our supply chains and ensure we have a regulatory framework in place. The stars are aligned on the regulatory side to make some much-need reforms. …

“I encourage all of you to engage your trade association on these issues. They’re a strong voice that are capable of getting thigs done in Washington.”

Transportation Go! was made possible by its sponsors: Wisconsin Soybean Marketing Board, Great Lakes St. Lawrence Seaway Development Corporation and Minnesota Soybean Research & Promotion Council (platinum); CHS, SB&B, Scoular, North Dakota Trade Office, The Redwood Group; Scoular, Illinois Soybean Association, and Global Processing (silver); Port Milwaukee, South Dakota Soybean Research & Promotion Council and Soy Transportation Coalition (social hour); Great Lakes St. Lawrence Seaway Development Corporation (name badge/lanyard).

“We appreciate our sponsors including Wisconsin and our other state sponsors who pulled the region together,” Wenberg said.

Competitive Shipping News and Developments

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Compiled by Bruce Abbe, Strategic Trade and Transportation Advisor

Biden Administration, Congress seek to promote competition in ocean liner system

Concerns over the concentration of power within the ocean container liner sector leading to high rates and lack of service continued to garner headlines and the attention of policymakers in Washington, D.C., last week.

President Biden noted as much in his State of the Union Address. The U.S. Department of Justice (DOJ) and the U.S. Federal Maritime Commission (FMC) are partnering to strengthen their anti-trust oversight of the ocean carriers and their vessel sharing alliances to promote competition and ward off anti-competitive behavior.

Last week, FMC Chairman Daniel Maffei spoke to the large, annual Trans-Pacific Maritime (TPM) conference, hosted by the Journal of Commerce (JOC) in Long Beach, CA. On Friday, Maffei spoke to the Specialty Soya and Grains Alliance’s (SSGA) Transportation Go! conference in Milwaukee.

JOC reported that Maffei told TPM attendees that FMC “will not undo the alliances and there’s no evidence to show ocean carriers are colluding to keep freight rates high.”  Go here for more detailed coverage of Maffei’s remarks in JOC and here in the AJOT.

In Milwaukee, Maffei told Transportation Go! attendees that his remarks were “somewhat misreported.” The agency, he said, has been examining ocean carriers practices and has not seen evidence of price setting collusion “yet.” but it intends to continue to monitor the steamship lines operations and will take action if it finds evidence of illegal behavior.

What’s legal and illegal for the global ocean carriers’ operations is also up for debate in Washington.  Legislation was introduced in Congress last week by Rep. Jim Costa, D-Cal., that would strip the carriers of their current anti-trust immunity.

Meanwhile, two subcommittees of the U.S. House of Representatives Committee on Oversight and Reform sent letters to three major ocean carriers – Maersk, CMA-CGM and Hapag-Lloyd, asking them to respond with information about dramatic increases in the prices for shipping containers and reports of exorbitant fees and surcharges” well beyond their costs. The letters asked for responses by March 16.  Go here for more coverage.

STB hears from U.S. Department of Justice supporting adoption of reciprocal switching to improve rail competition

The DOJ has submitted formal comments to the U.S. Surface Transportation Board (STB) providing reasons for urging the railroad regulatory agency to adopt reciprocal switching.

The STB will hold a hearing on the reciprocal switching March 15-16. The board has delayed ruling on the contentious issue for years. Reciprocal switching has been in use in Canada, where it is called ‘interswitching.’ for more than 100 years. In cases where a railroad provides sole rail access to a shipper, the railroad would need to be willing to transfer a shipper’s rail cars to a second railroad at a junction point. The second railroad would pay a per-car switching fee to the first railroad, and the STB would determine the reasonableness of the fee.

Major railroads in the U.S. generally oppose it, while shippers – particularly captive shippers – generally support it.

Go here for coverage of the DOJ’s comments in industry news publication Railway Age, which also includes links to the American Association of Railroad’s position on the matter.

Canadian Pacific RR facing possible workers’ strike

The Teamsters Canada Rail Conference members voted last week by 96.7% to go on strike after midnight March 16 if talks fail between its negotiators and Canadian Pacific Railroad. The Canadian federal government will be holding mediation meetings between March 11 and 16 to try to forge an agreement.

CP rail is a major intermodal container rail carrier serving many SSGA exporters shipping food and feed ingredients by container from the U.S. Midwest out through the Vancouver, B.C. gateway to Asia markets. Go here for more coverage.

Transportation Go! to feature panels on intermodal trucking, transloading, rail and more

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Competitive Shipping News and Developments

Transportation Go! to feature panels on intermodal trucking, transloading, rail and more

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation

It’s not just federal and state governments and port leaders headlining SSGA’s upcoming Transportation Go! conference that are reasons you’ll want to want to attend the March 3-4 event in Milwaukee.

The agenda features panels of experts who can provide practical service information on trends and new developments that can benefit shippers’ businesses.

An intermodal trucking and transloading panel will discuss the current state of intermodal shipping in the Midwest. Jason Hilsenbeck, president of Drayage.com, will share information about container terminal congestion throughout the area. Libby Ogard, president of transportation consulting firm Prime Focus LLC will moderate the panel. Chris Winkler, President of Aim Transfer will discuss drayage challenges for bi-state movements and AJ Martin with Burlington Junction Railroad will talk about transload opportunities.

A session titled “Reimagining Rail Service in the Midwest” will include invited representatives of CP, UP, CN and Watco and discuss new and changing Class 1 and regional railroad service for the region.

Key federal and state infrastructure and transportation project funding under the newly passed federal infrastructure bill will be the topic for remarks by Mark Berndt, lead consultant for the consulting firm, Quetica LLC. Berndt also chairs the Transportation Research Board’s Agriculture and Food Transportation Committee at the National Academy of Sciences. He also previously chaired the TRB Truck Size and Weight Committee.

To register, go to  www.transportationgo.com

International investigators to probe anti-competitive conduct
Competition regulators from the U.S., United Kingdom, Canada, Australia and New Zealand have begun to collaborate on investigating ocean container liners for potential cartel-like conduct in global supply chains, according to the online shipping news service Splash247.

A working group includes the U.S. Department of Justice Antitrust Division and competition oversight bureaus from the countries

The European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT) has also sent a letter to the European Union calling for an investigation by the multi-nation government body of the container shipping sector, alleging “unfair” and “discriminatory” practices. The EU has been reluctant to do so in the past.

The largest ocean container shipping lines have gone through mergers and consolidations in recent years, going from more than 15 down to 10 major lines. Those 10, however, operate in just three container vessel sharing “alliances.”

During the supply chain congestion crisis of the last two years there have been some new, but small players and one-off services entering the trade, but the major shipping lines far and away dominate global container trade lanes.

SSGA transportation have expressed concerns to Federal Maritime Commission officials that the effect of consolidation in the ocean carrier industry into only three alliances “may have morphed from tools of operational efficiency into tools for unfair restraint of trade.”

LA, LB, SC ports post record volumes in January
The ports of Los Angeles and Long Beach, the two busiest container ports in the U.S., posted overall record volumes in January, as did the Port of Charleston, South Carolina:

Los Angeles saw loaded imports decline 2.3% year-over-year from 437,609 TEU in 2021 to 427,207 TEU last month. Loaded exports were down over 16%, from 119,326 TEU to 100,185 TEU. But empty containers shipped out continued their climb, going up 21.4%, from 278,580 in January 2021 to 338,202 last month.

Long Beach saw import containers rise 6.9% to 389,334 TEU, and exports increased 5.9% to 123,060 TEU. Empty containers outbound grew 1.8% to 288,550 TEU.

Meanwhile, the three terminals at the Port of Charleston posted a record month, too, handling 226,515 TEU’s in January, up 4.7% from a year prior.

PNW ports decline as carriers skip service calls
The Northwest Seaports Alliance (NWSA) combined operating authority for the ports of Seattle and Tacoma reported a decline in container volumes during January. NWSA posted a drop of 5.8% of through-put totaling 272,281 TEU. Loaded exports dropped by 36%, while full imports dropped 0.9%.  Total exports, including empties, decreased 12.3% and imports down 1%.

NWSA’s recent volumes have been harmed by a number of ocean carriers temporarily stopping scheduled vessel calls to the key PNW gateway ports that serve many SSGA export shippers. The suspended or less-frequent vessel calls reportedly stemmed from congestion at the ports. However, recent operational reports from NWSA indicate few, if any, ships are now waiting to berth at the ports. Higher volumes are expected to return once the container vessel calls start-up again

Friedmann: Exporters fight to overcome service problems
Agriculture Transportation Coalition Executive Director Peter Friedmann was featured last week as part of Freightwaves’ Global Supply Chain Week interview series.

SSGA is an active, contributing member of the coalition.

Freightwaves also interviewed German ocean carrier Hapag-Lloyd CEO Rolf Habben Jansen recently. The Q&A covered Habben’s thoughts on prospects for spot rates, congestion outlook, schedule reliability problems, HL’s container supply, the need for more new ships, and more.

Container costs, production peaking
On a somewhat more positive note, top executives at Triton International and Textainer, the two largest container leasing companies in the world, told Freightwaves that the prices for new manufactured containers have come down to about $3,400 per TEU.

Container manufacturing has consolidated into predominantly three Chinese main companies. In 2021, consultancy Drewry reported more containers were made in 2021 than ever before –7.18 million TEUs, up 130% from 2020 and 62% from the previous year. Container production actually started pulling back in the fourth quarter from the third. Inventory levels at the factories also have rebounded. Prices for older containers have remained high, though.

 

 

SSGA chairman addresses White House Office of Outreach and National Economic Council

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Rob Prather, SSGA chairman and chief strategic ambassador for Global Processing of Kanawha, Iowa, represented all exporters in the container crisis when he commented to the White House that the Ocean Shipping Reform Act, introduced by Sens. Klobuchar (D-Minn.) and Thune (R-S.D.), as well as an associated version that had previously passed the House of Representatives, would help his business.

After some easing of the availability of containers in the runup to Christmas, Prather said things have tightened again. Exporters in the region report being told that they couldn’t get a booking for six weeks.

That’s why reforming the Ocean Shipping Act is so important. Prather said helping third parties file complaints can bring more action and having companies report their empty containers will help understand if a company is shutting down a market for returns or making some supply available. The Federal Maritime Commission (FMC) needs to be able to have a streamlined review of complaints, not a drawn-out process subject to brinksmanship. They need more resources to pursue complaints and then act to prevent detention/demurrage bills or unexpected fees from sinking a deal.

Right now, regional exporters report working at as little as 60 percent capacity, during the peak season for exports.

The high-value grains and oilseeds market depends on on-farm storage. If a crop isn’t moved from storage in the bins, it stays on the farm. This is about food security, and those of us in the rural United States who connect with and feed the foreign customer should not be left out. This is about the United States being a reliable supplier. All those ideas are in doubt or more difficult today.

The global container shipping crisis will be discussed at Transportation Go! March 3-4 in Milwaukee, where FMC Chairman Dan Maffei and other leaders in the agricultural supply chain will gather for in-depth discussions about the global supply chain and how it affects the vital movement of agricultural products both domestically and around the world. It will be an opportunity for attendees to weigh in on solution-seeking ideas and identify priorities. More information is available at www.transportationgo.com.

Transportation Go! early bird registration extended

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The early bird registration price for Transportation Go! has been extended through Friday, Feb. 11. Transportation Go!, the premier conference for soybean and grain transportation and trade issues in the Upper Midwest, will be held March 3-4 in Milwaukee. Special hotel room rates will also be available through Friday.

The Transportation Go! conference is focused on improving the competitive shipping environment for U.S. agriculture shippers and exporters everywhere with an emphasis on the Great Lakes and the St. Lawrence Seaway. Federal Maritime Commission Chairman Daniel B. Maffei and Surface Transportation Board member Robert E. Primus have agreed to appear at this year’s conference, among other leaders in the agriculture and transportation industries.

Formerly known as the Northern Commodity Transportation Conference, Transportation Go! will bring in the industry’s top stakeholders, from boots-on-the-ground commodity growers and organizations to traders and shippers of specialty crops, along with representatives from key ports along the Great Lakes and more.

This highly engaging conference will provide the opportunity for in-depth discussions about the global supply chain and how it affects the vital movement of agricultural products both domestically and around the world. It will be an opportunity for attendees to weigh in on solution-seeking ideas and identifying priorities.

Besides presentations from Maffei and Primus, Transportation Go! will feature a robust agenda with discussions on rail, truck, ocean shipping and more, including a market development and outlook panel featuring commodity organization leaders from the U.S. Grains Council, U.S. Wheat Associates and the U.S. Soybean Export Council.

Transportation Go! will take place March 3-4 at the Hyatt Regency in Milwaukee, Wisconsin. Register today at www.transportationgo.com.

Federal Maritime Commission chair, Surface Transportation Board member to appear at Transportation Go!

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Daniel Maffei, Robert Primus to discuss agricultural transportation issues

Transportation Go!, the premier conference for soybean and grain transportation and trade issues in the Upper Midwest, is pleased to announce that Federal Maritime Commission Chairman Daniel B. Maffei and Surface Transportation Board member Robert E. Primus have agreed to appear at this year’s conference, March 3-4 in Milwaukee, Wisconsin.

The Transportation Go! conference is focused on improving the competitive shipping environment for U.S. agriculture shippers and exporters everywhere with an emphasis on the Great Lakes and the St. Lawrence Seaway.

Surface Transportation Board member Robert Primus

Federal Maritime Commission Chairman Daniel Maffei

Maffei has been invited to discuss FMC’s efforts to find solutions to the global container shipping crisis and to protect the ability of U.S. inland agriculture container export shippers to serve their food manufacturing customers overseas.

Primus has been asked to address initiatives aimed at increasing competition and options for railroad service of agriculture shippers, including connectivity improvements among Class I railroads, regional and short line railroads and intermodal service.

“The future of agriculture comes from the future of transportation,” said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance, host of the Transportation Go! conference. “We can’t build the future of agriculture without these organizations and leaders helping us.”

Maffei was designated as FMC chairman by President Biden in 2021. He was first nominated to serve on the commission in 2016 by President Obama and again in 2019 by President Trump.

Primus was STB vice-chairman in February of 2021 – January 2022, shortly after being confirmed by the U.S. Senate as a board member in January 2021.

“Making a difference in agriculture means being vocal to build a solution,” said Bruce Abbe, SSGA strategic adviser for trade and transportation. “We are grateful that Chairman Maffei and STB member Primus are traveling to speak to our group and help build a reliable, efficient North American agricultural supply chain.”

Formerly known as the Northern Commodity Transportation Conference, Transportation Go! will bring in the industry’s top stakeholders, from boots-on-the-ground commodity growers and organizations to traders and shippers of specialty crops, along with representatives from key ports along the Great Lakes and more.

This highly engaging conference will provide the opportunity for in-depth discussions about the global supply chain and how it affects the vital movement of agricultural products both domestically and around the world. It will be an opportunity for attendees to weigh in on solution-seeking ideas and identifying priorities.

Besides presentations from Maffei and Primus, Transportation Go! will feature a robust agenda that includes discussion on these topics and more, including a market development and outlook panel featuring commodity organization leaders from the U.S. Grains Council, U.S. Wheat Associates and the U.S. Soybean Export Council.

Transportation Go! will take place March 3-4 at the Hyatt Regency in Milwaukee, Wisconsin. Register today at transportationgo.com. Early bird pricing is available through Feb. 8. Special hotel rates are also available through Feb. 11.

For specialty ag exporters, supply chain delays remain major crisis

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Situation has reached ‘condition critical,’ in some areas SSGA chairman says

The holiday rush may be behind us, but the supply chain crisis has not subsided, especially for many U.S. agricultural processors located in the Upper Midwest.

Specialty Soya and Grains Alliance (SSGA) members who export high-quality, Identity Preserved grains and oilseeds continue to have major difficulties getting the equipment they need to fulfill their orders and meet the needs of their overseas customers.

Many containers bringing consumer imports to the U.S. continue to be sent back overseas empty instead of inland where ag processors have supplies ready to be shipped.

“Specialty agriculture needs containers for food grade exports due to a food supply chain that has reached a condition critical situation,” said Rob Prather, SSGA chairman and chief strategic ambassador for Global Processing, an Iowa-based company that grows, processes and supplies Identity Preserved, non-GMO soybeans and soy ingredients. “This isn’t just a global supply chain issue; it’s a global food supply security issue.”

The United States produces the finest agricultural products in the world, including Identity Preserved soybeans and specialty grains used around the globe by food and beverage manufacturers. SSGA members’ customers abroad specifically want these products. They’ve ordered them, and they’re waiting for them.

Specialty crops shipped via container are a growing market because of consumer demand around the world. The United States must be a reliable supplier, and that means the supply chain must work for everybody. It is wrong for shipping lines, which have been enjoying record profits throughout this crisis, to deny service to ag exporters. Some SSGA members have reported they are able to ship just 40-60% of their orders because of these continuing supply chain issues.

“Dialogue must continue, and SSGA is calling on companies throughout the supply chain to participate and find ways to reposition containers where possible and unclog this system, which is so vital to the global food supply,” said Eric Wenberg, SSGA executive director. “As an American, I am surprised that one our country’s top exports is air -– in the form of empty containers. Let’s slow down the system enough so we can put something in those empty containers.”

SSGA was among the first groups to sound the alarm on the supply chain crisis, and that was 15 months ago. Continued lack of service, carrier cancelations, delays and rising freight rates and fees have made the situation as difficult as it’s ever been, according to some SSGA members.

This hasn’t just affected business either. There are real people working to make sure every link in the supply chain remains strong, and the human toll has caused hardships to logistics staffs, as well as farmers, truckers, suppliers and customers.

SSGA supported the Ocean Shipping Reform Act that overwhelmingly passed the U.S. House of Representatives in December and is encouraging the Senate to move forward with the legislation, which would strengthen the Shipping Act and prohibit ocean carriers from unreasonably declining opportunities for U.S. exports.

More solutions are needed and fast. While time is of the essence, SSGA is hosting a shipping conference, Transportation Go, March 3-4 in Milwaukee, Wisconsin, and encourages anyone interested in solving this crisis to join us bring your best ideas to the table. More information at transportationgo.com.