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Addressing the shipping container crunch

Addressing the shipping container crunch

Ag groups are asking the federal government to intervene

By Diego Flammini
Staff Writer
Farms.com

Ag industry organizations want the federal government to address an ongoing situation at shipping ports.

Grain Growers of Canada (GGC), Pulse Canada, the Canadian Special Crops Association and others have launched the Container Crunch campaign.

“There have been very serious and ongoing disruptions to the containerized supply chain here in Canada and globally,” Erin Gowriluk, executive director of GGC, told Farms.com.

These disruptions include shipping costs.

Between January 2020 and September 2021, the average price to ship a standard, 40ft. container has skyrocketed from $1,461 to $11,109.

Adding to the disruptions are the actions of shipping companies.

Shipping containers are available, but the companies are refusing to fill them for return trips to Asia.

This saves the shipping companies time by not having to clean out the containers after unloading grain.

“Some container lines are refusing to carry grain for export,” Gowriluk said. “So, a lot of those containers coming into Canada with consumer goods from Asia, which used to go back with Canadian grain, are going back empty because the demand for consumer goods is so high.”

This means Canadian grain export volumes to Asian markets have taken a hit.

“Exports of canola meal are down 26 per cent, animal feed is down about 50 per cent, wheat is down about 62 per cent and exports of lentils are down about 47 per cent,” Gowriluk said.

For their part, shipping companies are enjoying financial success because of the supply chain issues.

Maersk, for example, the world’s largest shipper, announced on Tuesday its most profitable quarter in the company’s 117-year history.

Operating profits for the third quarter reached about $5.9 billion.

GGC and the other members of the container crunch coalition are calling on concerned stakeholders to engage with the federal government.

A letter on the campaign’s website is available to send to Prime Minister Trudeau. Deputy Prime Minister Chrystia Freeland, Transport Minister Omar Alghabra and Agriculture and Agri-Food Minister Marie-Claude Bibeau are also copied on the letter.

In addition, the groups are asking the federal government to investigate this issue under section 49 of the Canada Transportation Act.

This section allows the Transport Minister to direct the Canadian Transportation Agency “to inquire into any matter or thing concerning transportation…”

“We want them to investigate this disruption and identify how these issues, now and in the future, be resolved,” Gowriluk said. “This is not unprecedented as we’ve seen this kind of investigation take place in other jurisdictions.”

In August, for example, the U.S. Federal Maritime Commission launched an inquiry asking eight ocean carriers to provide details about fees they’ve charged customers related to bottlenecks and delays.

One month later, Australia’s Competition and Consumer Commission launched its own investigation to determine if anti-competitive practices have caused price increases.

The Canadian government is keeping its eye on the shipping container situation.

“Our Government has a keen interest in fluid supply chains that serve our exporters well, and is closely monitoring the situation domestically and internationally,” Minister Alghabra’s office told Farms.com in an emailed statement.

“In Canada, a sound legislative framework exists in the Competition Act to address anti-competitive behaviour. As such, the Competition Bureau complaint process is an available mechanism to address our Canadian companies’ concerns about the competitiveness of liner shipping carrier, alliance, port and terminal business practices, including availability of containers for Canadian exporters.

Officials have met with industry representatives on several occasions to discuss these important issues and are keeping in close touch in various government-industry fora, such as the Commodity Supply Chain Table, to better understand the extent, evolution and impacts of container availability concerns.”

The container crunch organizations also want the federal government to develop a taskforce.

The group should include members of government and industry to identify immediate actions that can be taken to reduce current supply chain issues.

“These two things are things the government can do right now to get to the root cause of the issue and find out what we can do nationally,” Gowriluk said. “And through that, I think it will position Canada better to contribute to conversations with other countries about how to resolve this issue. But we can’t do that unless we do our own homework first.”


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