USDA invests more in improving key ports
Agriculture Secretary Tom Vilsack announced June 16 plans to expand export capacity for chilled and frozen agricultural products at the Port of Houston in Houston, Texas to help improve service for shippers of agricultural products grown in the United States. Additionally, the USDA announced the expansion of its existing partnership with the Northwest Seaport Alliance to improve access to a 16-acre “pop-up” site.
The USDA is partnering with the Port of Houston to lease additional chassis, used to position and store containers pending the arrival of ships, allowing the port to fully utilize its refrigerated shipping capacity or also known as reefer containers. The USDA is taking steps to increase export capacity for U.S. agricultural products and to ensure that delays or insufficient capacity do not restrict exports. The Port of Houston is the public port that handles more than two-thirds of container shipments in the Gulf of Mexico – the sixth-busiest container gateway in the United States.
The NWSE pop-up site will accept dry or refrigerated agricultural containers for temporary storage at the NWSA in Tacoma to reduce operational hurdles and costs, so they can be loaded onto ships at export terminals more quickly. This announcement builds on the existing partnership with the NWSA at the Port of Seattle announced on March 18. The NWSA includes ocean freight operations from the Ports of Seattle and Tacoma and is the fourth largest container gateway in the United States.
“America’s farmers and ranchers depend on a reliable and efficient transportation system to get their produce to market,” says Vilsack. “As part of the Biden-Harris administration’s creative approaches to making the port work better, we are working with supply chain partners to adapt and overcome the challenges facing agriculture. The USDA is pleased to announce the partnership with the Port of Houston and the expanded collaboration with the NWSA to further reduce port congestion. Through these investments, we continue to deliver on our promise to strengthen the supply chain and support American-grown foods and fiber.
Port of Houston
Since the start of this year, Port Houston has partnered with the Frozen Protein Shipping Alliance to implement measures to address supply chain impacts. The program announced by the USDA helps do just that to improve service for shippers of US-grown agricultural products and others.
Overseas sales of U.S. poultry, beef and pork through the Port of Houston totaled half a billion dollars in 2021, but millions in sales are at risk due to limited equipment availability, especially of chassis, at the port to move and position the refrigerated containers while waiting for the arrival of the ships. The U.S. agricultural sector, particularly the meat industry, has expressed great concern in response to these limitations, especially as challenges at West Coast ports have shifted some volume to Gulf ports. and from the east. These impacts ripple through the entire supply chain, affecting not only exporters, but also producers in the Southern and Southwestern states.
“This new program will help better match chassis supply to storage demand,” Port Houston Executive Director Roger Guenther said.
Agricultural products in reefer containers are typically stored on skids at the Port of Houston wheeled container facilities. Unfortunately, chassis have been in short supply for the past two years, reducing the port’s ability to handle chilled or frozen agricultural exports. As the port prepares for a longer term investment in a rack system, the lack of a dedicated pool of racks at present has forced the port to “anchor” the reefers. This decision, made out of necessity, adds inefficiency due to the extra time and steps required to move reefers out and onto frames before being put on the vessel. Additionally, the current electrical outlet system is half as efficient with grounded containers because fewer outlets are accessible. At the same time, ongoing supply chain issues have made it difficult to switch to short-term chassis rentals.
Using Commodity Credit Corporation funds made available to address market disruptions in September 2021, the Agricultural Marketing Department will cover 50% of the cost of obtaining and leasing chassis to the Port of Houston during the first year of its five-year lease of another 1,060 chassis. USDA funding will help manage the risk of the investment and ensure the port is able to fully utilize its current capacity for reefer vessels and avoid the risk of diversion or delay of exports. The USDA says this partnership will allow agricultural companies and cooperatives to export their products through the port and avoid costly delays or capacity constraints.
North West Seaports Alliance
Congestion-induced impacts on ship schedules and the prioritization of returning empty containers to Asia have dramatically raised barriers to exporting agricultural products in containers, leading to lost markets and disappointed customers. The Northwest Seaport Alliance saw an almost 30% decline in agricultural exports in the last six months of 2021 and the ratio of loaded to empty container exports has shifted to mostly empty containers since May 2021.
In Tacoma, an existing “pop-up” site near the 16-acre dock will be used to accept dry or refrigerated agricultural containers for temporary storage at the NWSA in Tacoma to reduce operational hurdles and costs so containers can be loaded faster on ships. at export terminals.
“Over the past year, the Northwest Seaport Alliance has worked closely with agricultural exporters to help alleviate supply chain challenges,” said Ryan Calkins, NWSA Co-Chair and Chairman of the Port of Seattle. “We appreciate Secretary Vilsack’s leadership and look forward to this pilot program reducing costs for agricultural producers and helping attract more U.S. exports to overseas markets.
“In partnership with PCMC, the NWSA has opened up over 60 acres of dockside storage through our walkway to reduce port congestion and increase export opportunities,” adds Deanna Keller, NWSA Governing Member and Vice President. of the Tacoma Harbor Commission. “Partnering with the USDA will continue our efforts and provide needed assistance to agricultural producers in our region.
FSA payments available
The Farm Service Agency will provide payments of $200 per dry container and $400 per reefer container to help cover the additional logistics costs of moving the container twice, first to the prepositioning site and then to the terminal. loading of the vessel, as well as the cost of temporary transport. storage. The NWSA “pop-up” site itself does not require USDA cost-sharing assistance because this site already has handling equipment and refrigerated outlets.
The FSA will make monthly direct payments to eligible agricultural businesses and cooperatives on a per-container basis using the Port of Tacoma based on the type of shipping container – dry filled containers and refrigerated filled containers. The site will have the capacity to pre-cool refrigerated shipping containers to receive perishables.
To apply, applicants must complete Form FSA-862, Commodity Container Assistance Program (CCAP) Application per FSA-862 instructions and submit the form to the FSA National Office via email at [email protected]. Payments will be made in arrears and verified with terminal records. A unique entity ID (12 alphanumeric characters assigned by SAM.gov) is required. Applicants who wish to receive payment by direct deposit must register online at SAM.gov at https://sam.gov/content/home and provide their bank account information. Candidates can submit nominations on a monthly basis, but all nominations must be submitted by January 31, 2023.
The FSA will make payments to eligible owners or designated marketers of U.S. agricultural commodities based on the number of eligible shipping containers used from March 1, 2022 through December 31, 2022, Port of Oakland and NWSA to ship agricultural products to their designated markets on container ships. Eligible products include agricultural products (other than tobacco) that are grown or produced in the United States for human food, animal feed, or fiber, and products made from those products, including certain products foresters.
Visit the Funds Availability Notice for more information on applicant eligibility and how to apply.