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Shipping carriers rejected tons of U.S. agricultural exports and sent empty containers to China

Shipping carriers rejected tons of U.S. agricultural exports

January 27, 2021: Shipping carriers rejected U.S. agricultural export containers in October and November instead of sending empty containers to China to be filled with more profitable Chinese exports, found by CNBC.

The Federal Maritime Commission has received petitions from U.S. agricultural exporters and warned that the delays in trade threaten profits and the industry’s reputation. 

The commission is investigating and is reviewing the trade data out of critical ports in California, New Jersey, and New York to see if the carriers’ refusal to load U.S. export cargo violated the Shipping Act. 

The act makes it unlawful for carriers to “unreasonably refuse to deal or negotiate,” or “boycott or take any other concerted action resulting in an unreasonable refusal to deal.”

Agriculture producers are more evident in planning for the upcoming harvest based on the orders completed during this window. Farmers and producers meet with banks in the winter months to secure funds for the next cycle.

The agriculture sector learned the most important lesson during the U.S. trade war with China: no contracts are sacred. They can always be postponed to another season or canceled altogether.

Carriers notified agricultural exporters in mid-October that they would prioritize empty export containers over agricultural exports. They would increase U.S. agricultural export prices for the transport of the commodities, they said.

According to port trade data, the total export container deficit for Long Beach and Los Angeles ports was 136,392 TEUs. An estimated 41,546 TEUs were denied out of the Port of New York and New Jersey. The total value lost export trade from those ports is $632 million.

That tally was calculated by taking the difference between the actual empty exports in 2020 vs. the 2019 share of export empties.

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