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While Americans are struggling with getting everyday items when they shop, farmers are facing a different supply chain crisis where they can’t ship food abroad due to discrimination by foreign shippers who won’t transport it.
U.S. ports are still backed up causing Americans to suffer this Christmas due to President Biden’s economic policies. Delays at western ports are causing a bottleneck in the supply chain and will undoubtedly cause many gifts to be late for the holiday or not arrive at all.
Farmers are dealing with a different version of the problem. They are unable to get their goods to foreign buyers.
“It’s the destruction of millions of dollars in value,” Rep. Dusty Johnson (R-SD) told Fox Business in an interview on Wednesday. Johnson was the chief sponsor of the Ocean Shipping Reform Act that overwhelmingly passed in the House on Wednesday.
The bill deals with the fact that Asian ocean carriers “unfairly discriminate against American cargo.” Evidently, the foreign carriers drop off their overseas goods in American ports and then turn tail back to Asia in order to pick up more goods to bring back to the U.S. They don’t bother to load up American goods to take back to foreign ports.
I joined @BloombergTV to discuss solutions to the supply chain crisis after #OSRA21 passed the House. We can ease this crisis if we focus on practical solutions. pic.twitter.com/1oZ0rwSS4O
— Rep. Dusty Johnson (@RepDustyJohnson) December 10, 2021
“You look at Valley Queen, they’re a cheese manufacturer in South Dakota. They had 2 million pounds of already sold lactose that has been sitting in a warehouse just waiting for a shipment,” Johnson reported. “And a recent container load of lactose that they had sold… sat on the dock for 75 days.”
“It started to spoil. And just on that one container load that was a $25,000 loss. And we have this happening throughout the American manufacturing and agricultural supply chain,” he asserted.
He also recounted the woes of an Iowa pork producer who is losing massive amounts of money because its product is stranded on the dock for long periods of time and eventually has to be frozen to save it.
“Asia loves chilled pork. They love never-frozen pork. And we ship a tremendous amount of pork over there. And when it has to sit on the dock for days at some point to keep it from spoiling, we have to freeze it. And that eliminates millions of dollars worth of premium that the Asians are willing to pay,” Johnson stated.
The problem is widespread across the nation and getting worse. The president of a California agricultural association told the Associated Press in an interview that 80% of shipments abroad were canceled in October alone. U.S. agriculture producers are forced to sign contracts that tend to encourage that type of behavior from shipping companies according to Johnson.
As a cosponsor of @RepDustyJohnson's Ocean Shipping Reform Act, I’m pleased that it passed the House last night!
This legislation will help mitigate current supply chain challenges by upholding American competitiveness & ensuring our trade partners are following the rules. https://t.co/A1hWLD2LPk
— Rep. Randy Feenstra (@RepFeenstra) December 9, 2021
“Right now we’ve got five major ocean carriers, they’re all foreign-flagged, and frankly their interests are not very well aligned with the interests of this country,” he surmised.
“Unfortunately because it’s an oligopoly… you’ve got to take it or leave it if you’re an American ag shipper,” Johnson remarked. “The terms often say that liquidated damages for you canceling a container is $100. Well, there can be $100,000 of goods in each container.”
“If you’re going to use this shared infrastructure, you’re going to play fair, and you’re not going to have unprecedented levels of rejection of American cargo – which is what we’re seeing actual rejection a refusal to take this cargo,” he stated.
Johnson claimed the bill is not protectionism but is actually “the opposite,” as it’s meant to encourage trade with Asia. It also addresses long lines of ships trying to get goods into the U.S.
“Overall, the bill really creates an environment where efficiency is rewarded for these ocean carriers, and so you have provisions in the bill whereby data exchanges can be set up and are really – they’re incentivized to set them up,” he asserted. “That is going to make the whole system operate a lot better.”
“Farmers in my district are already looking at shortages on farm equipment and chemicals along with skyrocketing costs, which will impact what they are able to plant next year,” Illinois congressional candidate Esther Joy King, a Republican, commented to Fox Business.
The bill would be the biggest update to shipping regulations in 30 years if signed by the president.
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