Congressional members of an agriculture committee are raising concerns with the Federal Maritime Commission that United States agriculture exporters are suffering severe service issues with foreign-flagged ocean carriers.
The concerns were raised in a June 16 letter to FMC chair Richard Lidinsky, Jr., from Sen. Blanche Lincoln, chair of the Senate Agriculture, Nutrition and Forestry Committee, and ranking minority committee member Sen. Saxby Chambliss, R-Ga.
The senators noted that while the administration in their opinions has outlined admirable goals to increase U.S. exports, the chain of trade must function fairly and efficiently for American shippers to get agricultural products to key overseas markets.
"According to constituent reports and recent media stories, U.S. exporters may be forced to wait as long as a month to secure space on an ocean carrier compared to earlier wait times of about a week," the senators said in the letter.
"These service interruptions, along with frequent rate hikes, are occurring despite the fact that most U.S. shippers enter into 12-month service contracts with the ocean carriers for fixed rates during the period. These contracts are supposed to ensure that the carriers will provide the necessary weekly equipment and vessel space consistent with each individual agreement. Unfortunately, it has come to our attention that carriers are now routinely failing to honor these contracts. Such breaches lead to increased costs for U.S. agricultural exporters and, in some cases, lost export opportunities."
The senators went on to state that the U.S. agriculture industry's ability to expand overseas seas and boost incomes is being threatened by the service problems.
"The ability of our agricultural exporters to expand markets abroad is dependent on adequate oceangoing vessel capacity and container availability at inland locations," said the letter. "If this critical link in the export chain does not function fairly or efficiently, our shippers will be unable to get agricultural products to key overseas markets. This will not only cost U.S. farmers and ranchers new export opportunities, but could cost them existing overseas customers."
The senators also praised the ongoing FMC investigation into ship capacity and how it impacts U.S. importers and exporters. The FMC is set to discuss the preliminary findings of that investigation in a closed session on June 23.
"It is our hope that the global economic recovery and improvements in fleet capacity will mitigate future problems," said the senators.
"We would also appreciate your perspective concerning the specific authorities that the commission has available to ensure the ocean carriers' honor their service contracts with U.S. shippers, including the ability to penalize carriers for egregious practices. If you lack such tools, we would welcome a discussion of ways to potentially strengthen the Commission's authority with the carriers," the senators wrote.
Thursday, June 17, 2010
