NMPF Presses for Supply Chain Progress

NMPF and U.S. Dairy Export Council (USDEC) leadership met with Federal Maritime Commission (FMC) Chairman Daniel Maffei on Oct.13 to discuss the implementation of the Ocean Shipping Reform Act and ongoing shipping challenges. The organizations touched on the results of a recent NMPF-USDEC membership survey and the need for further FMC actions to improve shipping flow dynamics, as well as relayed information on persistent backlogs at key ports nationwide.

The organizations followed the meeting with comments filed to the maritime commission Oct. 21, giving input to the agency as it starts rulemaking on prohibiting ocean carriers from unreasonably refusing to deal or negotiate with respect to vessel space accommodations. Given the severe shipping challenges that many dairy exporters have dealt with in the past two years, NMPF sees these proposed rules as a positive step. NMPF supports the agency’s stance that ocean carriers should outline their export strategies, which would balance negotiations and allow shippers to better understand how carriers operate.

Finally, California Governor Gavin Newsom of California on Sept. 30 signed Assembly Bill 2406 into law, placing new limits on the ability of ocean carriers to charge detention and demurrage fees to exporters and truck drivers that were incurred outside of a shipper’s control. NMPF and USDEC support the bill, sending letters in March and August to California Assembly Transportation Committee leadership and Newsom, respectively.

NMPF Active in Resolving Supply Chain Disruptions

NMPF and USDEC ramped up outreach efforts to Congress and the administration last month on the need to improve freight transportation services to prevent significant economic difficulties and ensure that American farmers can continue to feed the world.

In detailed comments to the Federal Maritime Commission (FMC) submitted on Sept. 14, NMPF and USDEC asked the agency to declare the current cargo congestion and inadequate oceans freight transportation service an emergency situation.

The comments emphasized results from a survey of NMPF and USDEC members which noted ongoing problems in export shipping despite the implementation of key provisions of the Ocean Shipping Reform Act this summer. For instance, 65 percent of survey respondents indicated that unreasonable detention and demurrage fees continue to be a challenge; more than half have had recent experiences with cancelled sailings; and a massive 92 percent responded that they continue to experience cancelled or rolled vessel bookings.

Based on those survey results and additional reports of logistical issues elsewhere, NMPF and USDEC urged the FMC to require ocean carriers and terminal operators to provide to shippers, rail carriers and other parties advanced scheduling, storage and other information that would greatly improve on-time shipping. The Federation encouraged the FMC to update its metrics for determining emergency situations in the future.

Additionally, ahead of a rail labor agreement reported Sept. 15, NMPF met with the administration and signed onto a Sept. 8 letter to Congressional leadership urging federal action if negotiations failed to prevent a lockout or strike. Ensuring that rail access remains available to deliver input supplies to dairy farms and finished products from plant to port has been a critical NMPF priority over the past few months.

NMPF will continue to press Congress and the administration, as well as private sector actors, to help address the lingering challenges in the dairy export supply chain.

Trade: NMPF Advances Better Policy Amid Record Exports

Highlights

  • Championed the Ocean Shipping Reform Act as it became law and worked to ease record port congestion and fees.
  • Led efforts to advance the U.S. government’s initiation of a second case against Canada for their non-compliance with USMCA’s dairy provisions.
  • Successfully held at bay several proposed policies to limit dairy trade in Latin America.

NMPF’s work to expand export market opportunities for U.S. dairy products has helped support a record $4.8 billion in dairy exports in the first half of 2022, a year-over-year increase of 27 percent. NMPF collaborates with the U.S. Dairy Export Council (USDEC) to advance NMPF member interests.

President and CEO Jim Mulhern joined President Biden at the White House in June to welcome the signing of the Ocean Shipping Reform Act (OSRA) into law. The legislation, aimed at easing the port congestion plaguing dairy and other exporters, caps NMPF and USDEC’s year-long efforts to help shape and advance the bill in Congress.

In addition to new protections for dairy exporters, including limits on fees incurred outside of exporters’ control, the new law directs the Federal Maritime Commission to draft additional regulations to ensure ocean carriers are not unduly refusing to transport U.S. exports. NMPF has also pressed the administration for measures to expand shipping equipment availability and iron out logistics challenges, including securing key port pop-up sites to facilitate the processing of shipping containers.

NMPF and USDEC also continue to be vocal advocates for free trade agreements that lower barriers for dairy exports, with the Biden Administration heeding NMPF’s calls to ensure existing deals are strongly enforced. Part of this year’s effort included successfully securing U.S. government support for a second dispute settlement panel over Canada’s refusal to expand dairy market access in accordance with its U.S.-Mexico-Canada Agreement commitments.

Additional efforts have focused on Mexico and Central and South America as protectionist sentiments continue to surge from Mexico to Chile. NMPF has focused on ensuring existing market access opportunities are preserved in the face of regulatory changes and anti-trade policies.

In Mexico, after deep engagement from NMPF and USDEC, new Mexican milk powder regulations were implemented on July 8 in a manner that allowed trade to keep flowing. The trade policy team also helped ensure that Panama’s appeals to shirk its dairy market access FTA obligations were rejected by the U.S. government and to push back against anti-import sentiment in Colombia, Chile, Peru, Ecuador, and other key regional markets. As additional countries retreat inward and embrace protectionist stances toward trade, NMPF strives to ensure counterproductive policies that would limit the ability of consumers to access U.S. dairy products are met with strong opposition.

NMPF, USDEC Push for Additional Supply Chain Relief Post-OSRA

As the Ocean Shipping Reform Act (OSRA) takes effect and dairy supply chains continue to face turmoil, NMPF and partner organization the U.S. Dairy Export Council are seeking additional policy solutions while fostering cooperation with port authorities and other key supply chain players.

NMPF President and CEO Jim Mulhern and USDEC President and CEO Krysta Harden met July 7 with retired Army General Stephen Lyons, the new Ports and Supply Chain Envoy for the Biden Administration, to ensure the needs of U.S. dairy farmers remain a priority as OSRA, supply chain-relief legislation passed into law in June, is implemented and additional remedies are pursued, pressing him on a range of critical matters to ensure continued administration support solving supply chain issues.

NMPF also joined a coalition of 157 trade associations in urging the White House to provide support to parties locked in negotiations over a dock worker strike at West Coast ports. At issue is the expired contract between the International Longshore and Warehouse Union and the Pacific Maritime Association.  A work stoppage, lockout or slowdown would come at a disastrous time for ag exporters.

NMPF also engaged the U.S. President and CEO of Mediterranean Shipping Company (MSC) Fabio Santucci on a wide-ranging call on July 12 to discuss the export crisis from the perspective of shippers. The meeting was part of a broader effort to identify opportunities to improve relations with carrier lines, which also included a meeting with Orient Overseas Container Line (OOCL) on July 8. In both meetings, NMPF focused on the challenges members face in container availability, cancellations, delays and fees and emphasized the negative impact these challenges had on relationships with import markets.

On the legislative front, NMPF provided input into and endorsed the American Port Privileges Act, legislation proposed  June 28 that would require U.S. ports to give priority to ships carrying U.S. exports. The legislation, introduced by Reps. John Garamendi (D-CA) and Jim Costa (D-CA), builds on OSRA and offers preferential berthing access by moving vessels that load 51% or more by volume or weight of American exports to the front of the loading queue. It also incentivizes ocean carriers to make second-leg voyages to ports like the Port of Oakland, the largest U.S. port for dairy exports.

All this comes as supply chain challenges continue to cascade across shippers and port facilities. As of late July, the Port of Oakland was closed due to protests over a new California trucking law. Meanwhile, even though several of OSRA’s helpful provisions have taken effect — including robust detention and demurrage payment guidelines – following them has not been instant, with the Federal Maritime Commission reminding shipping carriers on July 22 that compliance is necessary.

In that environment, NMPF and USDEC continue to pursue additional ways to advance policy and shipping-sector solutions.

Dairy Defined Podcast: Ports Momentum Must Continue, NMPF’s Rice Says

The Ocean Shipping Reform Act is now law, but much more is needed to ensure reliable exports of U.S. dairy products to the overseas markets that represent the industry’s future, said Tony Rice, trade policy manager for NMPF and the U.S. Dairy Export Council, in a Dairy Defined podcast released today.

“Our international customers demand U.S. dairy products,” said Rice. “Our competitors, mostly the EU and New Zealand, they’ve shown that they’re not going to be able to keep pace in the coming years. So it makes all the more important that these supply chain issues get ironed out, and hopefully sooner rather than later.”

Rice explains the complexities of the challenges facing U.S. port traffic, why additional public policy changes are essential, and how NMPF is leading agriculture’s efforts for change. The full podcast is here. You can also find the podcast on Apple Podcasts, Spotify, Google Podcasts and Amazon Music. A transcript is also available below. Broadcast outlets may use the MP3 file below. Please attribute information to NMPF.

NMPF Secures OSRA Passage, Looks to Next Steps

President and CEO Jim Mulhern participated in a White House ceremony on June 16 to celebrate President Biden’s signing of the Ocean Shipping Reform Act (OSRA).

The new law comes after more than a year’s worth of intense effort and has been among NMPF’s highest priorities, bolstered through its partnership with the U.S. Dairy Export Council (USDEC) and a joint member export supply chain working group. The organizations helped to build an influential coalition of agricultural and transportation allies, crafting a bipartisan group of congressional supporters and educating the administration about dairy’s export supply chain crisis.

OSRA directs the Federal Maritime Commission to craft regulations that prohibit ocean carriers from “unreasonably” declining shipping opportunities for U.S. exports and requires certification of detention and demurrage fees that have been incurred outside of U.S. exporters’ control. The commission must also craft regulations that bar retaliation against U.S. shippers. To learn more about additional OSRA protections and the FMC’s pivotal role, see NMPF’s Member Alert here.

OSRA’s passage shifts NMPF’s and USDEC’s focus to the next, equally critical step of ensuring the legislation is swiftly implemented and that the maritime commission develops strong rules to crack down on carrier misbehavior. NMPF and USDEC will be heavily engaged in rulemaking processes and will continue to push for robust congressional oversight of the implementation phase.

NMPF and USDEC is also continuing work with allied groups to address delays, congestion, equipment and labor shortages, major gaps in data, high costs and other issues hampering U.S. exports. As part of those ongoing efforts, NMPF’s Executive Vice President for Policy Development and Strategy Jaime Castaneda participated in the Agriculture Transportation Coalition’s 34th Annual Meeting in June, taking part in the members-only strategy session on agricultural export priorities to identify additional steps in resolving the ongoing crisis.

Dairy Commends Passage of Ocean Shipping Reform Act, Urges Swift Implementation

The National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) applaud the signing of the Ocean Shipping Reform Act, S. 3580, by President Joe Biden. Following passage of the legislation by the House of Representatives earlier this week by a vote of 369-42, President Biden signed the bill into law today. The enactment of the Ocean Shipping Reform Act sets in motion a series of new rules and regulations regarding ocean carrier practices that the Federal Maritime Commission (FMC) must implement over the course of the next year.

The legislation was introduced in response to the vocal advocacy by NMPF, USDEC and other agricultural export and shipper organizations, as problems with effective ocean freight transportation worsened in 2021. Congressmen John Garamendi (D-CA) and Dusty Johnson (R-SD), and Senators Amy Klobuchar (D-MN) and John Thune (R-SD) introduced similar versions of the Ocean Shipping Reform Act in the House and Senate, which both passed speedily through their respective chambers.

“We are grateful to our congressional champions – Congressmen Garamendi and Johnson, and Senators Klobuchar and Thune – for their leadership in getting this legislation drafted, introduced and passed so quickly. The U.S. dairy industry has suffered many challenges in getting goods smoothly and reliably to export markets due in large part to problematic ocean carrier practices. These new rules will allow the FMC to better enforce reasonable behavior by the ocean carriers,” said Jim Mulhern, president and CEO of NMPF.

“Our members continue to face significant impacts due to international ocean shipping challenges. Just last year, that resulted in over $1.5 billion in increased export costs and lost opportunities. While we can’t restore those losses, we are very pleased that President Biden and our allies in Congress quickly recognized the urgency of these problems and put their support behind legislative solutions to crack down on unjustified shipping practices,” said Krysta Harden, president and CEO of USDEC. “We urge the FMC to implement these rules quickly and begin to conduct the new oversight, regulation and enforcement necessary to end the unfair and unreasonable ocean cargo practices that have impeded American dairy products from efficiently getting to their overseas customers.”

Both organizations called on the FMC to implement the rules as expeditiously as possible to support agricultural exporters in getting more products onto vessels in order to better address rising food security needs around the world.


NMPF, USDEC Commend Congressional Progress on Ocean Shipping Reform Act

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) lauded today’s passage by the Senate Commerce Committee of the Ocean Shipping Reform Act (OSRA). The approval establishes Senate committee support for action to address shipping supply chain challenges as Congress prepares to commence conference procedures on the Senate-passed U.S. Innovation & Competition Act (USICA) and the House-passed America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act in the coming weeks. The House COMPETES Act includes the House-passed version of OSRA.

“Today’s action by the Senate Commerce Committee brings the Ocean Shipping Reform Act one step closer to passage,” said Jim Mulhern, president and CEO of NMPF. “Export supply chain issues continue to pose immense challenges to dairy exporters, which is why this legislation remains so critical as part of a broad-based approach to tackling those problems. Dairy farmers appreciate the leadership of OSRA sponsors Senators Klobuchar and Thune as well as Commerce Chair Cantwell and Ranking Member Wicker on this issue. We urge the Senate and House to expeditiously advance the conference process and ensure that the final text includes a strong focus on the needs of American agricultural exporters.”

“America’s dairy farmers and manufacturers are delighted to see the Ocean Shipping Reform Act continue to move forward and thank the many Senate Commerce Committee members who supported its approval today,” said Krysta Harden, president and CEO of USDEC. “Dairy exporters need the changes OSRA would deliver. As such, we encourage Congress to swiftly move the COMPETES/USICA conference work forward and send a bill that prioritizes the export shipping needs of U.S. agricultural exporters to the President’s desk.”

NMPF Campaigning for Quick Senate Action on Ocean Shipping Reform Act

NMPF’s work to advance key export supply chain legislation made significant progress with the Senate introduction of the Ocean Shipping Reform Act (OSRA) on Feb. 3, companion legislation to a House-passed measure meant to take strides to alleviate the supply chain crisis that is impeding dairy exports.

The bill introduced by key dairy allies Sen. Amy Klobuchar (D-MN) and Sen. John Thune (R-SD) comes after months of NMPF effort. While there are some differences between the two bills, the trade policy team continues its work with the Senate to strengthen the measure further as it advances through Congress.

NMPF has launched a grassroots campaign to demonstrate the bill’s support among a broad base of constituents. NMPF members, friends and allies can ask their Senators to ensure its passage here.

As part of NMPF’s multi-prong strategy to alleviate the export supply chain congestion, the trade policy team, together with agriculture coalition allies, also met Feb. 4 with the White House National Economic Council to discuss export supply chain concerns and work to identify additional solutions, reiterating its recommendation that the administration consider suspension of “box rules” that limit ag shippers’ ability to mix and match containers and chassis equipment and discussed other potential strategies to alleviate the crisis.

NMPF staff also joined a small group of agricultural organizations in a Feb. 22 meeting with White House Port Envoy John Porcari to further discuss potential changes to the box rules, urge the administration to replicate the Port of Oakland pop-up site designated for staging agricultural exports and explore options to increase data transparency for U.S. exporters.

NMPF and USDEC Statement on Senate Introduction of Ocean Shipping Reform Act

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) today commended lawmakers for introducing bipartisan Senate legislation to address the shipping challenges the dairy industry and other U.S. agricultural sectors are facing. The legislation, should it become law, would help alleviate delays and disruptions at U.S. ports that have been a critical part of the export supply chain challenges plaguing U.S. exporters.

Sponsored by Senators Amy Klobuchar (D-MN) and John Thune (R-SD), the Ocean Shipping Reform Act (S. 3580) is the Senate response to the House version (HR 4996) passed by a wide bipartisan vote (364 – 60) in December. Senators Baldwin (D-WI), Hoeven (R-ND), Stabenow (D-MI), Marshall (R-KS), Peters (D-MI), Moran (R-KS), Blumenthal (D-CT), Young (R-IN), Kelly (D-AZ), Blackburn (R-TN), Booker (D-NH), and Ernst (R-IA) also joined as original cosponsors of the bill.

“The supply chain challenges that have beset American exporters pose significant difficulties for U.S. dairy producers, causing over $1.3 billion in export losses for our sector during the first three quarters of 2021,” said Jim Mulhern, president and CEO of NMPF. “We greatly appreciate the leadership of Sens. Klobuchar and Thune to introduce legislation that will encourage many of the ocean carriers to stop unfair practices. We are committed to working with the Senators and their colleagues in Congress as legislation moves forward to ensure that a final law delivers the changes our exporters most urgently need to see.”

“This Senate bill takes strong strides to address many of the challenges dairy exporters have faced, including securing export vessel bookings and combatting unfair detention and demurrage charges, vital issues to ensure our products reach their intended destinations,” said Krysta Harden, president and CEO of USDEC. “When we can’t export our products, we not only jeopardize our foreign customer relationships and markets, but we also lose value-added opportunities that create jobs and investment in the United States. We look forward to continuing to work with Senators Klobuchar and Thune, and others in Congress, to address outstanding concerns and provide for the strongest possible reforms.”

USDEC and NMPF will continue to work with the Senate to strengthen the measure further as it advances through Congress.

USDEC and NMPF, in collaboration with their member Supply Chain Working Group, have leveraged a multi-pronged approach with Congress and the administration from early 2021 to address the supply chain disruptions plaguing the dairy industry, including unprecedented fees, container availability, and lack of transparency. Foreign-owned ocean carriers’ practices have been a sizable component of those problems. The organizations have provided input into the legislative text and worked closely with the sponsors of this bill to advance Congressional efforts to update the Shipping Act to encourage more reasonable and equitable access to the export shipping supply chain.

Beyond legislation, NMPF and USDEC also continue to work with Congress and the administration to identify additional measures to ease the congestion – including calling for further expanding port hours of operation, increased data transparency, and investments in key supply chain infrastructure.

House Shipping-Bill Passage Follows Wide-Ranging NMPF Approach

A year of NMPF advocacy to alleviate shipping supply chain disruptions for dairy exports took a significant step forward Dec. 8 with the U.S. House of Representative’s passage of the Ocean Shipping Reform Act.

With input from a joint NMPF-U.S. Dairy Export Council Supply Chain Working Group launched in last July to draw on the expertise of members’ dairy logistics staff, NMPF worked closely with Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), USDEC and other agricultural partners to shape the legislation, which passed the House with a broad, bipartisan vote of 364-60. The bill is intended to mitigate the delays, disruptions and unreasonable fees that dairy exporters have faced for more than a year.

Following this win, NMPF now is building Senate support for the bill by highlighting key provisions meant to ease disruptions that have cost dairy exporters over $1.3 billion through the first three quarters of 2021.

If signed into law, the legislation would amend the U.S. Shipping Act to provide new oversight and enforcement authority to the Federal Maritime Commission, expand opportunities for shippers to seek redress from ocean carriers, and increase transparency and accountability among foreign-owned ocean carriers. The bill specifically would reign in carriers’ ability to deny contracted export shipments, increase the availability of containers, improve protections against retaliation, and better address fees that are accruing outside of dairy exporters’ control.

As part of the push that led to the overwhelming House vote, NMPF spearheaded a Dec. 8 letter from 78 dairy cooperatives, companies and associations reiterated the legislation’s importance to the continued success of U.S. dairy exports, which are on pace for a record volume in 2021 when final numbers are compiled. A FAQ on the bill that NMPF and USDEC created is here.

“We thank Representatives Garamendi and Johnson for their leadership in working to address the challenges dairy and other agricultural exporters have struggled with for the most of this year,” said Jim Mulhern, president and CEO of NMPF, in a statement after House passage. “The Ocean Shipping Reform Act is an important move toward ensuring the international competitiveness of our dairy producers is not unfairly limited by abuses from ocean carriers. We look forward to working with the Senate to carry this momentum forward.”

Dairy Industry Commends House Passage of Ocean Shipping Reform Act on Wide Bipartisan Vote

Proactive efforts throughout this year led by the U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) to alleviate dairy supply chain disruptions took a significant step forward today with the U.S. House of Representatives passing the bipartisan Ocean Shipping Reform Act of 2021 (OSRA) on an overwhelming bipartisan vote of 364 – 60.

If passed by the Senate and signed into law, the legislation will help alleviate delays and disruptions at U.S. ports that have cost the U.S. dairy industry well over $1 billion this year. American dairy exporters since late 2020 have faced unprecedented challenges in securing shipping container accommodations on ocean vessels while contending with record-high fees and shipping access volatility, most of which has been driven by foreign-owned ocean carriers.

With input from their newly formed Supply Chain Working Group of dairy exporters, USDEC, jointly with NMPF, worked closely with Representatives John Garamendi (D-CA) and Dusty Johnson (R-SD), as well as other agricultural partners, in helping to shape the legislation. In addition, a letter from 78 dairy cooperatives, companies and associations sent today reiterated the importance of OSRA to the continued success of U.S. dairy exports.

As the letter noted, “Ocean carriers are shipping empty containers across the Pacific Ocean at record rates of over 70%. Put simply, this is wreaking havoc on U.S. dairy exports, which are important ingredients in supply chains that help feed consumers in Asia and elsewhere. Unfortunately, our global competitors in the European Union and New Zealand are not facing the same level of volatility in supplying those markets which puts U.S. dairy exports at high risk of being displaced for more reliable suppliers… It is critical that Congress pass the Ocean Shipping Reform Act to address this crisis and deliver relief from the supply chain snarls and market failures that are bogging down the export of American-made dairy products.”

USDEC and NMPF were among the first contributors to drafting OSRA. The bill supports key steps to resolve supply-chain obstacles by amending the U.S. Shipping Act to provide new oversight and enforcement authority to the Federal Maritime Commission, expand opportunities for shippers to seek redress from ocean carriers, and increase transparency and accountability among ocean carriers and other parties. The bill specifically would restrain carriers’ ability to deny export shipments, increase the availability of containers, improve protections against retaliation, and better address unfair detention and demurrage charges.

To help ensure that an effective revision to current law can be swiftly enacted, the organizations will continue working to secure a strong Senate version as well. Congressional reform of the Shipping Act is one vital piece to the broader set of steps NMPF and USDEC continue to promote to alleviate the shipping crisis impacting U.S. dairy exporters.

“While dairy exports are on track for a record year in 2021, it is important to consider how much more the United States could have exported without the onslaught of shipping challenges and fees this year has brought,” said Krysta Harden, president and CEO of USDEC. “We worked from the beginning of this year on generating the broad bipartisan support demonstrated today for the Ocean Shipping Reform Act, which shows the urgency of the issue and the need for reform, both to alleviate the short-term congestion and to ensure that the reputation of the United States as a reliable supplier is not further jeopardized. We commend House leadership for taking this critical step to tackle these challenges.”

“NMPF thanks Representatives Garamendi and Johnson for their leadership in working to address the challenges dairy and other agricultural exporters have struggled with for the most of this year,” said Jim Mulhern, president and CEO of NMPF. “The Ocean Shipping Reform Act is an important move toward ensuring the international competitiveness of our dairy producers is not unfairly limited by abuses from ocean carriers. We look forward to working with the Senate to carry this momentum forward. Given the complexity of the export shipping crisis, we also encourage the Administration to continue to take steps within its existing authority to alleviate the challenges facing dairy exporters.”

USDEC, together with NMPF and their joint Supply Chain Working Group launched in early 2021, continues to urge the importance of strong Senate companion legislation and additional measures to address the challenges plaguing U.S. food and agricultural exporters quickly and fully.