This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
Obviously, our members, the US agriculture and forest products exporters, will be best served by resolution of China, Canada, Mexico, and Europe trade negotiations. While China’s targeted exemptions from its tariffs temporarily benefit certain US agriculture exports, our exporters are developing entirely new transportation supply chains to access alternative markets — a challenge that will expand throughout 2020.
What can the US government do to help exporters, without negotiating with another country? Increase trucking efficiency. Our exporters, chafing under the world’s lowest truck weight limits, must send four trucks to the port, whereas our competitors in Canada, Mexico, Europe, ship the same volume with only three trucks. This causes not only significant extra cost, but unnecessary congestion on roads and at marine terminals.
2020 may be the year that Customs and Border Protection and our AgTC Export Compliance leaders eliminate unnecessary export documentation penalties — costing $5,000 to $10,000 per shipment — a significant cost to US exporters ­struggling to absorb retaliatory tariffs.
Meanwhile, carriers and terminals that do not seek federal scrutiny and intervention are on notice: treat your customers — US exporters, importers, forwarders, and truckers — responsibly. Virtually the entire US economy supports the Federal Maritime Commission’s initiative to curtail abusive, unfair container detention and demurrage penalties. The practice of carriers and terminals that impose penalties on shippers and truckers even when obtaining or returning containers within the “free time” is not possible suggests this is a revenue stream for some carriers, rather than a means to promote rapid turnaround of containers. Members of Congress are increasingly scrutinizing this behavior. Carriers overstepped on verified grows mass (VGM); they are overstepping here.
Carriers and chassis providers would do well to understand the impact of “box rules,” which limit the availability of chassis, creating disruption, delay, cost, and congestion at times at inland rail and ocean terminals. Should this continue, it may also be ripe for federal intervention.
The AgTC would rather work with carriers, chassis providers, and terminals to resolve these matters, to improve the carrier-shipper relationship.