U.S. helps fund California port project as export delays hurt food
makers
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[January 31, 2022]
By Tom Polansek
CHICAGO (Reuters) - The U.S. Department of
Agriculture said on Sunday it will help fund a new container yard for
agricultural exports at California's Port of Oakland, as the government,
ports and food companies scramble to ease costly shipping delays.
The multimillion-dollar project is set to open in March, and officials
said it could be replicated elsewhere.
Strong U.S. demand for goods from Asia during the pandemic has boosted
imports, clogging West Coast ports. Some ocean vessels have left the
United States carrying empty containers after making deliveries, rather
than waiting to fill ships with American goods for export.
Ships delivering cargo at ports in Los Angeles and Long Beach,
California, have also skipped Oakland, a major hub for agricultural
exports, to return to Asia more quickly.
Oakland's export volume in 2021 declined 8% from the previous year, the
port said, hurting shipments of products like nuts, dairy and produce.
"With the delays and disruptions that are occurring, market share is at
risk," U.S. Agriculture Secretary Tom Vilsack told Reuters.
The Port of Oakland will open a 25-acre acre "pop-up site" to provide
space to prepare empty containers, the USDA said. The off-terminal site
will move containers off chassis and store them for rapid pick up, the
port said.
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U.S. Transportation Secretary Pete Buttigieg said in a statement that
"inland pop-up ports" improved the flow of goods at the Port of Savannah
and the government plans to work with other ports on similar ways to
reduce congestion.
The USDA will pay 60% of the startup costs and partner with the Port of
Oakland to partially cover a $125 per container reimbursement made to
shippers, Vilsack said. The USDA estimated the project will cost about
$5 million, and the port said the initial start-up will cost about $2
million.
"This is for however long it takes to get us back to a place where we
have some stability in the market and some stability in the supply
chain," Vilsack said.
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![](../images/013122pics/news_f11.jpg)
Cranes are seen without a container ship docked at the Port of
Oakland, California, U.S. November 2, 2021. REUTERS/Ann Saphir
![](http://archives.lincolndailynews.com/2022/Jan/31/images/ads/current/atlantaNB_lda_HFH_2021.png) Though U.S. farm exports reached a
record in 2021, they could have been bigger without delays at ports,
Vilsack said.
In the first nine months of 2021, shipping disruptions cost the U.S.
dairy industry about $1.3 billion due to lost business and higher
shipping and storage costs, said Jaime Castaneda, executive vice
president of the U.S. Dairy Export Council and National Milk
Producers Federation.
Some importers canceled orders because of delays, forcing U.S.
producers to resell their goods at a discount, Castaneda said.
Denver-based Leprino Foods, the world's biggest mozzarella cheese
maker, had 99% of its export shipments canceled or re-booked at
least once last year, up from 10% in a typical year, Chief Executive
Mike Durkin said.
Such delays contributed to a 57% surge in the company's supply-chain
costs last year, Durkin said. Costs are expected to jump another 50%
in 2022, with a third of the increase related to exports, he said.
To deal with port delays, Leprino Foods trucked dairy products
normally exported from Oakland to Houston and other ports, Durkin
said. It also sent whey products via air to a customer in Asia that
needed them to keep operations running, he said.
Durkin and dairy groups are working with the USDA, ports and
shipping companies to improve exports.
"We've got to get this somehow figured out," Durkin said. "The
challenge is huge."
(Reporting by Tom Polansek; Editing by David Gregorio)
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