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    Moving Grain: Ocean Shipping Reform Act Becomes Law

    Photo: U.S. Grains Council

    Ocean Shipping Reform Act of 2022 Becomes Law

    Enacted on June 16, the Ocean Shipping Reform Act of 2022 is intended to expand the Federal Maritime Commission’s (FMC) authority to optimize the ocean transportation system to facilitate movement of U.S. exports.

    In contrast to previous ocean shipping policy, the law specifies shipment details that detention and demurrage invoices must include, directs FMC to promptly investigate complaints about charges, and makes carriers responsible for establishing the reasonableness of any detention and demurrage charges. Within the new law’s first 45 days, FMC must initiate a rulemaking to further define prohibited detention and demurrage practices.

    The law also prohibits carriers from “unreasonably refus[ing] cargo space accommodations when available” and from “unreasonably refus[ing] to deal or negotiate, including with respect to vessel space accommodations.” In the coming months, FMC must initiate rulemakings to further clarify carrier practices. Such rulemakings are expected to help prevent carriers from returning only empty containers to China, rather than first loading them with agricultural products.

    USDA Partners With Two More Port Locations—Tacoma and Houston

    Last week, USDA announced partnerships with two more ports to ease congestion for agricultural exporters—on top of earlier projects with the Ports of Oakland and Seattle. In one case, the Northwest Seaport Alliance (NWSA) has opened a 16-acre “pop up” site at the Port of Tacoma, WA.

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    Both the Tacoma site and NWSA’s 49-acre pop-up site in Seattle are accepting dry agricultural or refrigerated (reefer) containers for temporary storage. USDA will provide payments of $200 per dry container and $400 per reefer container to help cover the additional logistical costs of using the sites. In addition, a partnership between USDA and the Port of Houston, TX, will ensure agricultural companies and cooperatives can export their commodities.

    During the first year of the Port of Houston’s 5-year lease of an additional 1,060 chassis, USDA will cover 50 percent of the cost of obtaining and leasing the chassis. USDA’s aim with these projects is “to help American farmers and agricultural producers move their product to market.”

    STB Instructs Railroads To Revise Service Recovery Plans

    On June 13, the Surface Transportation Board (STB) required the four U.S. Class I railroads to correct deficiencies and provide additional information on their planned actions to improve their service. Throughout 2022, the railroads—BNSF Railway, Union Pacific Railroad, CSX Transportation, and Norfolk Southern Railway—have struggled with delays and congestion on their networks.

    On May 20, the railroads submitted service recovery plans to STB, as requested. STB said the plans were “an opportunity [for the railroads] to show their commitment to improved service—and to demonstrate progress.” However, STB also stated, “the Carriers failed, in varying degrees, to provide service recovery plans that met the Board’s stated expectations.” In its latest decision, STB described in detail the information needed from each of the four railroads. The railroads are required to submit their revised service recovery plans on June 23.

    Snapshots by Sector

    Export Sales

    For the week ending June 9, unshipped balances of wheat, corn, and soybeans totaled 24.3 million metric tons (mmt), up 2 percent from the same time last year and down 7 percent from the previous week.

    Net corn export sales were 0.141 mmt, down 50 percent from the previous week. Net soybean export sales were 0.317 mmt, down 26 percent from the previous week. Net weekly wheat export sales for the new marketing year 2022/23 (which began June 1) were 0.237 mmt.

    Rail

    U.S. Class I railroads originated 21,429 grain carloads during the week ending June 11. This was a 10-percent decrease from the previous week, 12 percent fewer than last year, and 4 percent fewer than the 3-year average.

    Average July shuttle secondary railcar bids/offers (per car) were $71 below tariff for the week ending June 16. This was $571 less than last week and $206 more than this week last year.

    Barge

    For the week ending June 18, barged grain movements totaled 769,450 tons. This was 7 percent lower than the previous week and 4 percent lower than the same period last year.

    For the week ending June 18, 524 grain barges moved down river—4 fewer barges than the previous week. There were 494 grain barges unloaded in the New Orleans region, 30 percent fewer than last week.

    Ocean

    For the week ending June 16, 24 oceangoing grain vessels were loaded in the Gulf—39 percent fewer than the same period last year. Within the next 10 days (starting June 17), 38 vessels were expected to be loaded—23 percent more than the same period last year.

    As of June 16, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $79.50. This was unchanged from the previous week. The rate from the Pacific Northwest to Japan was $45.25 per mt, unchanged from the previous week.

    Full report.




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