Stories of skyrocketing shipping costs, empty containers taking up space on outbound ships, and once-thriving California agricultural exports left to sit and lose value — or even rot — have been the subject of of a joint California Assembly hearing this week on how the global shipping crisis has hurt the state’s many agricultural interests.
“Not only has our export situation not improved, it continues to deteriorate,” said Craig Duerr, vice president of global sales and marketing for Campos Brother’s Farm. “The agricultural climate is unlike anything I’ve ever seen.”
Assembly members agreed, calling the situation frustrating.
“Those of us on the Agriculture Committee understand what’s going on and are very, very frustrated,” said Cecilia M. Aguilar-Curry, D-Winters, whose district includes Napa, Yolo and Sonoma counties. in Northern California. “I hope we understand the urgency, that people’s lives are at stake here. Products are stored in warehouses and prices (of products) are falling.”
The two-hour information hearing on Wednesday February 2 brought together the Assembly’s Agriculture Committee and the Assembly’s Select Committee on Ports and the Movement of Goods. The hearing was chaired by the respective chairs of those committees, Assemblymen Robert Rivas, D-Salinas, and Patrick O’Donnell, D-Long Beach.
Aid is already in the works, officials said.
Port of Los Angeles executive director Gene Seroka, for example, is part of a group looking specifically at declining exports, focusing on the challenge of getting rail service to move goods more efficiently. from within the country.
For the past two years, he said, they have called for a national and state export policy.
“We need to bring farmers and manufacturers back into the international game,” Seroka told the committee. “We need to put exporters in a position to do better.”
Port advancements in areas such as digitalization lag behind ports in other countries, Seroka added.
“We are 30 years behind other trading nations in this area,” Seroka said, referring to the ability to share information tracking containers. “We can track a pizza order that comes to us better than we can track a container.”
Wednesday’s discussion focused on California’s 11 ports and the exporters they serve.
The $17 billion allocation for ports and waterways included in recent federal funding will help, Seroka said, with a focus on creating better connections and “bringing the Central Valley and inland regions closer to ports.” residents”.
The Port of Oakland, where 50% of agricultural exports leave California each year, will open a 25-acre off-terminal container yard to improve the flow of agricultural exports.
But as with everything in the supply chain, there is no one-size-fits-all solution.
Making better use of the ports of Oakland and Stockton were frequently mentioned options.
“Normally, a number of ships would land cargo at the ports of Los Angeles and Long Beach and then go up to the Port of Oakland to load exports to Asia,” said Karen Ross, secretary of the California department. of food and agriculture. .
More often now, officials say, ships unload imported cargo at Los Angeles/Long Beach, only to turn around and return to Asia with empty containers instead.
Danny Wan, president of the California Association of Port Authorities and executive director of the Port of Oakland, spoke about the need to modernize the space the port has but cannot always use.
While agricultural exports have increased nationally, he said, exports through California have fallen.
“It seems ironic to us,” Wan said, “but California as a whole is losing export market share.”
The announcement this week for new space at the Port of Oakland will include incentives for agricultural exporters, Wan said, with refrigerated container caps and providing more terminal space by eliminating voids.
Assemblyman Mike Gipson, D-Carson, also said the current shortage of truckers was part of the equation.
“How can we rectify that,” he said, “how can we resolve these outstanding issues?”
The Pacific Merchant Shipping Association has suggested supply chain policies to help California agricultural exporters acquire equipment and transportation services at reasonable costs, as well as work with ports and local governments to enable areas off-terminal transit where empty containers can be moved.
O’Donnell, meanwhile, suggested a policy requiring terminals to commit to sending a certain percentage of exports as part of their overall business.
“Perhaps we should consider requiring some type of export requirement for signed leases for terminals,” O’Donnell said. “I don’t think it (should) be too prescriptive, but it might be wise to put some responsibility on terminal operators.”
For those caught in the supply chain quagmire, solutions are needed fast.
“We are losing market share to international competitors who are not faced with” rising costs and long lead times, said Michael Parr, vice president of international sales for Wente Family Estates in San Francisco, a major exporter. of wine.
The continued uncertainty and economic loss are untenable, said Duerr, of Campos Brother’s Farm.
“We can’t invoice an export customer without a (cargo) bill of lading and we can’t get a bill of lading until (the product) is on a ship,” Duerr said, “so whenever we have a ship delayed, that translates into hundreds of millions of dollars.
“It’s unsustainable for many of our businesses,” he added.
A lack of port modernization, inflated fees and unreliable shipping schedules all need to be addressed, he said.
“We’re feeling the impacts strongly,” Duerr said, “and honestly the corrections can’t happen fast enough.”