Rep. Schrier Sends Letter to Federal Maritime Commission About Increasing Uncertainty for Washington State Exporters

March 2, 2021
Press Release

WASHINGTON, DC – Congresswoman Kim Schrier, M.D. (WA-08) today sent a letter to the Federal Maritime Commission (FMC) with concerns about foreign-owned ocean carriers returning empty containers to China for quick turnaround in order to get more Chinese exports to the U.S. This practice is extremely harmful to U.S. farmers, who are left unable to reliably ship their goods overseas, and to the 8th District’s economy. Too often, Washington state’s farmers and growers don’t know when a ship will be in port, making it difficult to get their products to the carrier in time. Farmers and growers are also forced to pay additional fees when their products, often perishable, have to wait at the port to be loaded onto a ship. And the buyers overseas become understandably frustrated with late deliveries. Washington’s farmers and growers risk losing their foreign markets.

In the letter Rep. Schrier says, “Washington’s 8th Congressional District stretches across the Cascade Mountains and is home to some of the nation’s largest agricultural producers and exporters, selling hay, apples, pears, and cherries around the world. For months, these exporters have shared with me how carriers favoring empty export containers is impacting their industries, threatening export markets and souring relationships they have developed and maintained over decades. It is not an exaggeration to say that the economic health of my district is being directly threatened by the actions of the nine major ocean carriers.”

In her letter, Rep. Schrier says that she believes the carriers could be in violation of the Shipping Act and requests the FMC to use all available tools to end the unfair behavior of prioritizing certain exports.

“Our products, primarily Apples and Pears, are highly perishable products, which also happen to be produced by many, many other countries around the world, including China, the EU nations, and many Southern Hemisphere countries. When shipping companies abruptly increase our cost, restrict our cargo, delay our cargo, or simply refuse to carry our cargo, we lose sales opportunities which we cannot get back. In my estimation, the current issues we are facing with respect to loading and movement of our cargo to customers around the world, will result in Export sales losses in the millions of dollars for our current crop alone. Simply missing or skipping one week of shipments to an important market can mean missed sales of $250,000-500,000 in value…and we have faced a number of missed weeks, skipped weeks, and downright refusals already. Those sales don’t come back. They are gone for good,” said Dave Martin, Export Sales Manager, Stemilt Growers LLC.

Earlier this month Rep. Schrier spoke with several commissioners on the Federal Maritime Commission who shared her concerns about this issue and how it affects America’s exporters. In her letter Rep. Schrier tells the Commission that she will pursue legislative action if the Commission needs that assistance to rectify this situation.

 

A copy of the letter is below.

 

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Dear Commissioners:

I am writing to express my concerns about reports that foreign-owned ocean carriers are unfairly prioritizing importation of foreign goods over U.S. exports. For faster turnaround, the carriers take empty containers back to China, rather than waiting to load the ships with U.S. agricultural exports. This is heavily impacting the viability of U.S. farmers and exporters.

I understand that the Federal Maritime Commission is already engaged on this issue, has launched a formal investigation into ocean carrier practices, and is determining whether the carriers’ actions may be in violation of the Shipping Act. Today I want to offer the Commission my full support and encourage you to use whatever means are within your authority to end this unfair behavior.

COVID-19 has disrupted global supply chains, upended long-standing trade patterns, and created bottlenecks at ports around the world. It is understandable that ocean carriers – along with terminal operators, exporters, truckers, and just about the entire international trade economy – have struggled to overcome these logistical challenges. And yet, from what I am hearing from Washington state exporters, the current lack of container availability cannot be attributed to pandemic-related disruptions alone. Ocean carriers seem to be making a revenue-based decision to reject U.S. exports.

This rejection, as well as the carriers’ failure to provide accurate notice of arrival and departure times, frequent last-minute booking cancelations, and questionable demurrage and detention practices, is hurting American farmers and exporters. I have heard from many of them in my district.

Washington’s 8th Congressional District stretches across the Cascade Mountains and is home to some of the nation’s largest agricultural producers and exporters, selling hay, apples, pears, and cherries around the world. For months, these exporters have shared with me how carriers favoring empty export containers is impacting their industries, threatening export markets and souring relationships they have developed and maintained over decades. It is not an exaggeration to say that the economic health of my district is being directly threatened by the actions of the nine major ocean carriers.

The widespread rejection of U.S. exports must end. American farmers and agricultural exporters are depending on you to stand up against these unfair practices. I support any FMC enforcement action that will ensure ocean carrier compliance with the Shipping Act and bring desperately needed relief to our exporters. If you find that current regulations do not adequately equip the Commission with enforcement capability, I am happy to work with my colleagues to pursue legislative language to grant you that authority.

Thank you for your commitment to protecting American exporters and consumers. If you have any questions or concerns, please do not hesitate to contact me or my staff. 

Sincerely,

Kim Schrier, M.D.

Member of Congress