The U.S. Department of Agriculture will fund a multimillion-dollar container yard for agricultural exports at the Port of Oakland in California to help ease expensive shipping delays, according to Reuters (subscription).
What’s happening: “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.”
What it means: The “pop-up” yard site, which is slated for a March opening, will consist of a 25-acre space for the preparation of empty shipping containers, the USDA said. The site will also store containers for faster retrieval.
- A similar move recently helped the Port of Savannah, and the federal government plans to do such projects at other ports in the near future, Transportation Secretary Pete Buttigieg said.
How it will be funded: The USDA will fund 60% of the startup costs of the pop-up site project, the total cost of which is expected to be about $5 million.
- The agency will partner with the Port of Oakland in partially covering a $125-per-container reimbursement to shippers.
Sorely needed: “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.”
- To circumvent the Port of Oakland, some producers have turned to air shipments and rerouting supplies to other ports, leading to significant cost surges.
The NAM says: “For months, the NAM has been insisting that the ultimate solutions needed to fix the problems at our ports will come through incremental, positive steps,” said NAM Director of Infrastructure, Innovation and Human Resources Policy Ben Siegrist. “This action by the administration is another step forward, in line with similar efforts made weeks ago at the Port of Savannah. We applaud this progress and look forward to continuing to identify solutions that better utilize shipping equipment and expedite industrial goods movement.”