Cargill’s Bessac Testifies on Impact of West Coast Port Impasse
On Feb. 10, the Senate Commerce Committee’s Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security conducted a hearing focused on the reliability of U.S. ports and the impact continued West Coast port congestion is having on various aspects of the U.S. economy.
Norman Bessac, vice president of international sales for Cargill and a member of the USMEF Executive Committee, was one of four witnesses to appear before the subcommittee.
Bessac told subcommittee members that port congestion has been especially problematic for chilled (never frozen) meat exports because of the limited shelf life – about 60 days for beef and 45 days for pork. He explained that under normal circumstances, a container of Cargill’s fresh pork destined for Asia follows this type of schedule:
- Trucked to the West Coast (2-3 days)
- Loaded onto a container ship (3-6 days)
- In transit on the water (15-18 days)
- Unloaded and clears customs (1-2 days)
It is then then delivered to a customer’s warehouse for distribution, leaving approximately 25 days of shelf life for the product.
“But recently the industry has been experiencing delays of two to three weeks on chilled product as ships and product have backed up in the West Coast ports,” Bessac said. “With this delay, our Asian customers cannot count on a dependable supply of U.S. beef and pork, so they have started to cancel orders and are looking to suppliers in Chile, Australia and the European Union to meet their needs.”
For the U.S. industry as a whole, the inability to ship chilled products to Asia has severe financial consequences. Last year chilled beef and pork exports to Asia exceeded $2 billion. Japan and South Korea were the primary destinations, but chilled product is also exported to markets such as Taiwan and Hong Kong.
Bessac noted that while the port crisis may seem like a short-term problem to many observers, the U.S. meat industry is at great risk of losing an Asian customer base that took decades to build. This would have long-term consequences for everyone in the supply chain, including livestock producers and industry employees.
“USMEF estimates that the global demand for U.S. beef and pork will reach 17.6 billion pounds in 2024, up 50 percent for beef and 42 percent for pork, with most of that growth coming from the Pacific Rim,” he said. “Future growth to serve these markets depends on an effective, efficient and reliable supply chain capable of moving an incremental 162,000 containers per year.”
Bessac’s full testimony is available online.
Following the hearing, Sen. Deb Fischer (R-Nebraska), who chairs the subcommittee, called on the Pacific Maritime Association and the International Longshore and Warehouse Union to conclude their labor contract negotiations, which began in May 2014.
“Today’s hearing was an important opportunity to examine the impact of service disruptions at our nation’s ports and the impact on our transportation supply chain,” Fischer said in a news release. “Given the real economic consequences of the ongoing port congestion on the West Coast, I’m calling for a swift resolution to the current negotiations.”
Her sentiments were echoed by the chairman of the Senate Commerce Committee.
“This is an issue that just really needs our focus,” said Sen. John Thune (R-South Dakota). “It’s a huge drain on the economy and I just urge all sides to come to a resolution in this dispute, and find a solution as soon as possible. We just can’t afford to drag this on and have our economy pay this kind of price.”
Further details from the hearing are available from the Senate Commerce Committee’s website. Port congestion is expected to further worsen this weekend, as the Pacific Maritime Association has announced a suspension of vessel loading and unloading operations on Feb. 12, 14, 15 and 16.