Agriculture Transportation Coalition

What some had believed to be a temporary shift of trade volumes, from imports to exports, now appears to be a fact of life. Carriers and shippers must adapt. Consumers in China, India and other emerging economies are willing and able to spend more for food and fiber for U.S. agriculture products. While Asian consumers have demonstrated the ability to pay more for our exports, U.S. import consumption is flat, at best. Will this change the traditional trans-Pacific and trans-Atlantic “head-haul” calculus? Will exports from North America become again, as they were three decades ago, the “head-haul?” Will ocean carriers allocate the necessary capacity and equipment to service the long-term global demand for North American exports? There is virtually nothing produced by North America agriculture that cannot be sourced someplace else in the world. Our agriculture quality may be higher, and so might the production costs, but our ability to deliver dependably and affordably to the foreign customer will determine whether U.S. agriculture remains competitive. Thus, the ocean carriers’ decisions, either individually or collectively (where still permitted), will determine the extent of U.S. agriculture competitiveness. Over the coming months, or perhaps longer, we will have the opportunity to compare how ocean transport responds when subject to the antitrust laws-rules of competition. The European Union’s termination of the carriers’ exemption from EU competition laws now prevents the Atlantic carriers from jointly discussing and/or fixing freight rates and service terms. Meanwhile, these same ocean carriers will be allowed to continue, through their agreements, to engage in joint pricing activities in the Pacific. Will we see differences between the Atlantic and Pacific trades in rates, service or capacity? Time will soon tell.