To increase exports of agricultural products by 2022, USDA partners with Port of Oakland

The U.S. Department of Agriculture (USDA) announced new efforts to ease port congestion and restore disrupted shipping services for U.S. farmers and agricultural producers. Agriculture Secretary Tom Vilsack announced plans to increase capacity at the Port of Oakland in California and improve service for shippers of U.S.-grown agricultural products.

USDA said it is partnering with the Port of Oakland to establish a new 25-acre “pop-up” site to make it easier for agribusinesses to fill empty shipping containers with commodities such as U.S. soybeans, dairy products, and specialty crops such as nuts and fruits.

Fewer containers have been made available for U.S. agricultural commodities as ocean carriers have bypassed traditional marketing channels and rushed to return containers for export empty and, as a result, many of these carriers have suspended service to the Port of Oakland.

USDA is now taking steps to reduce these shipping disruptions that have prevented U.S. agricultural products from reaching their markets, the agency said in a news release.

“COVID-19 revealed vulnerabilities throughout our supply system, both at our ports and in the agricultural sector”, U.S. Agriculture Secretary Vilsack said.

As the economy has experienced a historic recovery, it has put additional stress on the supply chain. The Biden-Harris Administration is using creative approaches to improve port operations while elevating American-grown food and fiber. This partnership with the Port of Oakland builds on our aggressive approach to addressing challenges within the supply chain and sends a strong signal that we are committed to working across the Administration and with state, local and private partners to mitigate complex port capacity and congestion issues and keep American agriculture moving.

Tom Vilsack, U.S. Agriculture Secretary.

“As a major hub for the export of California and U.S. fresh fruits, nuts, dairy products and frozen proteins, we appreciate the Administration’s efforts to alleviate delays and shipping costs for agricultural exporters,” said Port of Oakland Executive Director Danny Wan.

We are in complete sync with the USDA on this issue and are gratified by their willingness to work with us on behalf of Oakland’s export customers.

Danny Wan, Port of Oakland Executive Director.

The Port said the USDA would fund 60% of the start-up costs for the Oakland export container depot.

Agricultural exporters will have exclusive access to refrigerated containers for loading perishable agricultural products. Best of all, the Port said, truckers will be able to avoid marine terminals.

Agricultural exporters will also receive direct incentives from the USDA to use the interim terminal.

“This creative partnership with the USDA and the Port of Oakland will help U.S. farmers and agricultural producers move their products to market while making better use of empty containers that cause bottlenecks at the ports,” said U.S. Transportation Secretary Pete Buttigieg. “After we helped establish inland pop-up ports at the Port of Savannah, we witnessed significant improvements in the flow of goods, and we expect to see similar positive results once this Oakland facility is open. We look forward to collaborating with other ports to find similar solutions to congestion.”

Putting pressure on ocean carriers

In December, Secretary Buttigieg and Secretary Vilsack urged the world’s major ocean carriers to help mitigate disruptions to agricultural shippers by restoring reciprocal treatment of imports and exports and improving service.

Ocean carriers have made fewer containers available for U.S. agricultural products, repeatedly changed return dates, and charged unfair rates as ocean carriers short-circuited regular lanes and rushed containers back to export empty.

Poor service and refusal to serve customers is exemplified by the suspension of service to the Port of Oakland by many ocean carriers.

DOT and USDA asked carriers to more fully utilize available terminal capacity on the West Coast. Since then, at least one carrier has announced plans to resume previously suspended service to Oakland.

About the partnership

Using Commodity Credit Corporation funds set aside to address market disruptions in September 2021, USDA will cover 60% of start-up costs, reflecting the historical share of agricultural products traded through the Port of Oakland. USDA will also help cover additional movement logistics costs at $125 per container.

This project will improve the marketability of U.S. agricultural products by:

• Faster pickup of empty containers by bypassing the main terminal;
• Access to available equipment; and
• Fewer unpredictable congestion surcharges for trucks.

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