Ag shippers share more concerns about U.S. West Coast ports

As we reported yesterday, the Agriculture Transportation Coalition (AgTC), says there are several compelling reasons why U.S. West Coast ports are facing “critical” challenges.  Port productivity is becoming a key issue in the current negotiations for a new labor contract covering nearly 20,000 dockworkers.

Here are a few more points made by Peter Friedmann, Executive Director, AgTC:

*Some Eastern and Gulf ports lift containers at the pace of 42 per hour - significantly faster than the average at U.S. West Coast ports.

*Puget Sound and Southern California ports enjoy virtually unlimited navigation channel depth, and Oakland has been dredged to 50+ feet. But this advantage is being lost as East and Gulf coast ports are now being dredged sufficiently deep to handle the latest generation of mega container ships.

*Canada and Mexico are not sitting still. Vancouver and Prince Rupert British Columbia enjoy locations closest to North Asia manufacturing centers, as well as to the fastest growing consumer market for U.S. exports of food and fiber, Asia. Imports via Prince Rupert arrive to Midwest distribution centers days faster than imports from the U.S. West Coast. They enjoy service by Canadian railroads which have demonstrated ambitions to significantly grow their market share, as reflected in their rates and service. This has already proven attractive to U.S. importers in the Midwest.

*It remains unclear if the Panama Canal will divert cargo and ships from the West Coast to the East and Gulf Coast ports closer to the U.S. population centers. But we know that it will be a new option. Thus far, most of the analysis has been on import cargo. However, recent analysis has indicated that the Panama Canal could be economically viable for agriculture exports to China.

*The energy boom creates new business for Burlington Northern and Union Pacific railroads to carry oil, gas, coal from the Midwest to West Coast, destined for Asian markets. This is creating rail capacity competition against container and hopper car traffic. Will this make access to and from Asia for containerized imports and exports through West Coast ports problematical?

*Since 9/11, the U.S. government has continuously imposed new documentation and inspection requirements on cargo entering and leaving the United States. This puts enormous pressure on US importers, exporters and ocean carriers to obtain, organize and submit information much earlier in the shipping process than has been the case previously. The delays and penalties for mistakes are draconian. This is imposing costs on U.S. exporters and importers that are not borne by our foreign competitors. While the scrutiny applies whether cargo moves through West Coast, East Coast or Gulf Coast ports, it does not apply to cargo transiting Canadian, Mexican or most other ports around the world. This is already creating a powerful incentive for foreign buyers to look to suppliers in Brazil and other countries where exported cargo is not subject to such intense regulatory mandates and penalties - leading to less cargo transiting U.S. ports.

“While not all of these factors are immediately impacting West Coast cargo volume, all of them loom as threats to permanently divert cargo from West Coast terminals,” Friedmann says.

That would not be in the interests of either imports or exports. If unchecked, they will limit agriculture export access to global markets, and cargo volume for your terminals and jobs.