Concern about reports that U.S. agricultural exporters are experiencing serious service issues with the foreign-flagged ocean carrier industry has been directed to the Federal Maritime Commission.
In a letter to Richard A. Lidinsky Jr., FMC chairman, Arkansas Sen. Blanche Lincoln, chairman of the Senate Agriculture Committee, and Georgia Sen. Saxby Chambliss, the committee’s ranking member, note that while the Obama administration has outlined admirable goals to increase U.S. exports, the chain of trade must function fairly and efficiently for American shippers to get agricultural products to key overseas markets.
“According to constituent reports and recent media stories, U.S. exporters may be forced to wait as long as a month to secure space on an ocean carrier compared to earlier wait times of about a week,” the senators wrote.
“These service interruptions, along with frequent rate hikes, are occurring despite the fact that most U.S. shippers enter into 12-month service contracts with the ocean carriers for fixed rates during the period. These contracts are supposed to ensure that the carriers will provide the necessary weekly equipment and vessel space consistent with each individual agreement.
“Unfortunately, it has come to our attention that carriers are now routinely failing to honor these contracts. Such breaches lead to increased costs for U.S. agricultural exporters and, in some cases, lost export opportunities.”
Chambliss and Lincoln asked the FMC to identify steps it is taking to address these issues, including the ability to penalize carriers for egregious practices.