The supply chain issues are at the forefront of issues caused by the pandemic. In an effort to relieve congestion at the ports, Agriculture Secretary Tom Vilsack announced plans to increase capacity at the Port of Oakland in Oakland, California and improve service for shippers of U.S. grown agricultural commodities.
The U.S. Department of Agriculture is partnering with the Port of Oakland to set up a new 25-acre “pop-up” site to make it easier for agricultural companies to fill empty shipping containers with commodities. Fewer containers have been made available for U.S. agricultural commodities, as ocean carriers have circumvented traditional marketing channels and rushed containers back to be exported empty and as a result, many of these carriers have suspended service to the Port of Oakland. USDA is now taking action to reduce these shipping disruptions that have prevented U.S. agricultural products from reaching their markets.
The site will provide space to prepare empty containers beginning in early March. Agricultural companies and cooperatives will have easier access to these containers, which they will fill with commodities, restoring shipping services to agricultural products while relieving congestion. The new site will also have a dedicated gate with the ability to pre-cool refrigerated shipping containers to receive perishable commodities, all while avoiding bottlenecks that would have resulted from entering the main area of the Port.
Pressuring Ocean Carriers
In December, Vilsack and Secretary of Transportation Pete Buttigieg urged the world’s leading ocean carriers to help mitigate disruptions to agricultural shippers by restoring reciprocal treatment of imports and exports and improving service. Ocean carriers have made fewer containers available for U.S. agricultural commodities, repeatedly changed return dates, and charged unjust fees as the ocean carriers short-circuited the usual pathways and rushed containers back to be exported empty. The poor service and refusal to serve customers is exemplified by many ocean carriers suspending service to the Port of Oakland. DOT and USDA called on the carriers to more fully utilize available terminal capacity on the West Coast. At least one carrier has since announced plans to resume previously suspended service to Oakland.
The USDA has been actively developing options to alleviate market disruptions for agricultural producers and companies using the Commodity Credit Corporation (CCC) resources set-aside last fall, with a special focus on transportation challenges such as ports and trucking.
About the Partnership
Using Commodity Credit Corporation funds set aside to address market disruptions in September 2021, USDA will cover 60% of the start-up costs, which reflects the historical share of agricultural products that are marketed through the Port of Oakland. USDA will also help cover additional movement logistics costs at $125 per container.
This project will enhance marketing of U.S. agricultural products through:
- Quicker pickup of empty containers as the main terminal is bypassed;
- Access to available equipment; and
- Fewer unpredictable congestion surcharges for trucks.
The benefits of relieving congestion and addressing capacity issues at ports through partnerships like this one at the Port of Oakland go well beyond the local region as commodities and agricultural products grown and processed from thousands of miles away feed into and flow through the port. Farmers, ranchers, workers, rural communities and agricultural companies throughout the supply chain will benefit from efforts to restore and improve proper service by the ocean carriers to use the export capacity of our ports.
