Ag Export Hearing Features Ag Council Member as a Panelist
With significant agricultural export challenges confronting many Ag Council members, Craig Duerr Vice President of Global Sales & Marketing at Campos Brothers Farms, an Ag Council member, spoke as a panelist during an Assembly hearing on February 2 to help legislators understand the export issues facing agriculture at California ports.
Craig articulated the impacts of ocean carrier practices on agricultural exporters, including excessive and unreasonable detention and demurrage charges, outrageous freight rates, and not communicating schedules in a timely manner.
The joint informational hearing was held by the Assembly Agriculture Committee chaired by Assemblyman Rob Rivas (D-Salinas) and the Select Committee on Ports and Goods Movement chaired by Assemblyman Patrick O’Donnell (D-Long Beach). Over a dozen legislators attended the hearing, demonstrating a high level of interest in the topic.
Challenges and possible solutions were discussed by Craig and other presenters.
Excerpts from Craig Duerr’s presentation in italics:
With the export market so crucial to our business, I want to be clear that the ag export climate is not like anything I have ever seen, and we are experiencing obstacles well beyond our usual challenges.
A University of California agriculture economics analysis published in Nov/Dec 2021 shows the share of empty containers leaving California ports hit a record 79 percent in September 2021. This is a huge problem because those empty containers are needed to export ag products.
Unfair & Excessive Fees
Access to export containers is even more limited given that costs are extremely high and new fees have been added.
The supply chain has always been a complex space to operate within, however, we are alarmed costs are skyrocketing with detention and demurrage charges up 300 percent.
The congestion and extreme rates and fees incentivize shippers to leave California ports with empty containers and avoid the Port of Oakland altogether where a great deal of our product is exported from.
Costs
Between May and September 2021, the value of agricultural exports from California plummeted by 17 percent – amounting to about $2.1 billion in losses. In addition, the California almond industry has seen massive price decline, because of export shipments not shipping as scheduled, equal to another $2 billion dollars. This is money lost, that will not flow into our communities.
Solutions
Potential solutions exist at the state level that could compliment work on the federal side, such as opportunities to ensure evenhanded ocean carrier practices.
For example, Craig discussed — and Ag Council supports — steps to modernize existing California law relating to detention and demurrage and related charges. We encourage legislators to consider action to address the inflated and unfair fees.
Other presenters at the hearing included: California Department of Food and Agriculture Secretary Karen Ross, Port of Oakland Executive Director Danny Wan, Port of Los Angeles Executive Director Gene Seroka, California Farm Bureau President Jamie Johansson, as well as representatives from the wine and rice sectors.
To watch the hearing, go to the Learn More link below. Craig Duerr’s introduction and presentation begins at the 1:32 (one hour, 32 minute) mark in the video.