Cargo Ships line the coast causing shipping delays amidst global supply chain disruption affecting container ships and freight. (Photo: Clearsunrise/Shutterstock)
Bowing to China, Shipping Carriers Refuse to Transport U.S. and California Goods
This export crisis and imbalance of trade hurts American workers, businesses, security, and American goods
By Katy Grimes, February 24, 2022 3:36 pm
“Shipping carriers rejected U.S. agricultural export containers worth hundreds of millions of dollars during October and November, instead sending empty containers to China to be filled with more profitable Chinese exports,” a 2021 CNBC investigation found.
American farmers, ranchers and growers don’t have a shipping container shortage, as has been reported. Foreign shipping carriers are refusing to take American and California-made products, and instead, the shipping carriers take empty containers back to China.
China pays shipping carriers so much money to export Chinese-made goods, they are then paid a premium to carry the empty containers from America back to China. As a result, hundreds of thousands of containers with American products are delayed or remain sitting rotting on American docks in American ports while foreign customers wait.
In the past year, members of congress, the U.S. Secretary of Transportation, the U.S. Secretary of Agriculture, the California State Transportation Agency Secretary, and the California Department of Food and Agriculture sent letters to the shipping council, leading ocean carriers, and Federal Maritime Commissioners. But the export situation has only gotten worse.
What does this mean for California?
California walnut, almond and citrus growers, and meat and dairy producers are facing not only the loss of their food products because so much of the 2021 crop is still sitting in storage in the U.S., but is already sold, and they aren’t getting paid for what was ordered and committed – payments will not be received until the product is delivered.
“California’s walnut industry exported 47% fewer nuts in the shell and 16% fewer shelled nuts during September and October of 2021 than it did in the previous year,” the California Walnut Board reported to Reuters.
“The 2021 crop we now know has not shipped to the level that we thought,” President and CEO of the Almond Alliance of California, Aubrey Bettencourt told AgNetWest. “The cash flow was not received by our handlers, processors, hullers, and shellers, so they have little to no leeway to afford the pool payments to our farmers for the 2022 year. This is getting to be a scary situation. I’m not speaking for everybody, but it is a concern, and we are starting to see letters about it that we just don’t have the cash flow available to our farmers.”
The product was grown, processed and prepared for shipping, but growers and suppliers haven’t been paid, while the food products sit abandoned, rotting in shipping containers. Growers are now facing the 2022 crops. How do they pay for the new crops when they haven’t been paid for 2021? How perishable are walnuts, almonds, citrus, meat and dairy?
California State Transportation Agency Secretary David S. Kim and California Department of Food and Agriculture Secretary Karen Ross sent a letter in early January 2021 to leading ocean carriers “requesting they take full advantage of underutilized California ports, including the Port of Oakland, to increase capacity for agricultural exports and help relieve supply chain congestion in the San Pedro Bay.” To no avail.
The CNBC investigation found:
“Shipping carriers rejected U.S. agricultural export containers worth hundreds of millions of dollars during October and November, instead sending empty containers to China to be filled with more profitable Chinese exports.”
“Carriers rejected an estimated 177,938 containers known as TEUs (20-foot equivalent units) in October and November, according to the analysis of data compiled from the Census Bureau and the ports of Los Angeles, Long Beach, California, and New York and New Jersey.”
“According to port trade data, the total export container deficit for the ports of Long Beach and Los Angeles was 136,392 TEUs. An estimated 41,546 TEUs were denied out of the Port of New York and New Jersey. The total value lost export trade from those ports is $632 million.”
The Globe spoke with Aubrey Bettencourt of the Almond Alliance, who joined the alliance December 2021 in the middle of the crisis. “The 2020 almond crop ran long, so the pain of not having the 2021 crop hasn’t been felt yet,” she said. “But the global demand of almonds is huge.”
Bettencourt explained that for the retail side – the middle purveyor – they don’t care. “They will replace almonds on the store shelves with another snack.” So unless almonds are a part of a product, like Almond Milk, or almond flour, not everyone will experience the loss.
There are two other regions which grow almonds – Spain and Australia, Bettencourt said. And Australia is a major supplier to markets in the Asia-Pacific region, and has a free-trade agreement with China. Bettencourt said our second largest almond market is Germany, but Spain as a grower could supply the Germans.
California’s Congressional Delegation is working on this, especially after realizing the $2.1 billion loss of agriculture revenue in California because of this shipping crisis, Bettencourt said. And that means no tax revenue to the state on the $2.1 billion. The shipping and port crisis “has been almost one year to date. Last February/March 2021 was the last normal period at our ports,” Bettencourt added.
U.S. Senator John Thune (R-ND) and Rep. John Garamendi (D-CA) have bipartisan legislation addressing this crisis, but do California growers and ranchers have the time it takes to get legislation passed and into practice, even if Congress is moving fast?
And what happens if almond, walnut, citrus growers, and meat and dairy producers don’t deliver the contracted products? Everyone involved wants to know this answer.
Ironically, next week, trans-Pacific and global container shipping and logistics companies gather at a conference in Long Beach, California, billed as “The must-attend conference for the trans-Pacific and global container shipping and logistics community.” The cost to attend the conference varies between $895 up to $3,345, which does not include golf at Pelican Hill Newport Beach.
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It would be nice to just cut off as much trade as possible with China until manufacturing ramped up stateside to cut it all. Perhaps I’m blind but I don’t see any benefit to the majority of Americans in trade with them.
That is what Trump tried to do. Re? But no, it would raise the cost of living. His idea was shot down. Bringing jobs back was opposed as a bad idea.
Then he should have led by example,, by not renewing his manufacturing contracts with China and having his furniture, clothing and other name brands made there as well as his contracts in India, Bangladesh, and Mexico. Plus if you and when you get an opportunity read the trade agreement his administration negotiated with China and Mexico. Not good for American manufacturing at all. Next time you go by a Chevy car Lott look at where over 45% of the truck original parts are made… (Mexico) some times it’s best to know facts then say what you hear. And your right if our Congress would have done there job this tread bill would not have passed but if Trump wanted his words to mean something he should have led by example. A true leader never ask others to do what he or she is unwilling to do….
Of course, if Biden had tried to do the same thing, he would have been hailed as a messiah!
Instead, we’re STILL seeing a skyrocketing cost of living, and we’re having to kiss China’s ring…
Biden has spent his entire first year proving Trump was right again and again and again…
If course there are people that are gonna try to claim that one side of the isle or the other is at faut. “LAME IDEA”!!! IF THEY LEAVE HERE WITH NOTHING, AND WE DONT ACCEPT THAT CHINESE JUNK, THEYRE GONNA FET TIRED OF SAILING BACK AND FORTH WITHOUT GETTING PAID…
But you have an insatiable appetite for Chinese junk such as i Phones, computers, tools etc.
Unfortunately this is a “catch 22”. Manufacturing is finding itself unable to make the parts to fill the orders because it can’t get supplies to make the parts. In addition, some can’t get new orders because the companies they work with either don’t have the funds or everyone involved is lacking the help to make them. What happened to all the vessels that were sitting off the Coast of California all the way down to Mexico? You know the ones that coudn’t unload because there weren’t enough truckers to move the freight?
The US NEEDS TO KEEP THEM. To hell with the rest of the world. We might need them to not stave to death
The benefit is lower prices, and of course that’s important. But the cost is the destruction of American industry, so the cheap consumer goods don’t seem like such a great deal.
So basically China is declaring economic war on US-made goods, eh???
Is “The Big Guy” getting his 10% from the CCP via Hunter, like before November 2020???
Is Gavin getting his kickback for not raising a stink about this damage being caused his California constituents??? Or is his plan to bankrupt the California agribusiness underway so that the CCP can buy up the land for cheap???
Yes, that and him refusing them water should be our clue. Either China or Gates wants the land.
Maybe we need to start sinking Chinese ships as they leave Chinese ports.
Buy as much American goods as you can find. It is getting harder to find items made in the USA but with a search most items can be found.
https://www.madeinamerica.co/
The last 2 years have proved to be frightful for Australian citizens, perhaps their government has become too dependent on China. The CCP is hitting us from all angles to weaken our economy and our will.
I agree Cali Girl, we need to buy American and support small local farmers/businesses! I ordered 2 new American flags since some thug in CA ripped mine down and destroyed it. I found a company that is veteran/family owned called Grace Alley. Beautiful embroidered flags. I now also shop at a small local grocery store that sells local farmers crops/goods. There was a time when we did not rely on China imports, it is time for Americans to support Americans, especially veterans. Mammothnation.com is another site.
Thanks Stacy for the flag recommendation. I will check them out. Wow, stealing flags off a house is so low and ugly.
Shopping local is key.
Some parts of our country have bare shelves, so I hope the California goods are transferred around our country.
We need to return the favor and stop buying so much cheap, low quality junk from China.
This is the fruit of liberalism. The barriers to registering ships in the US is too high and we don’t build trade ships here in the US. There is no tax yourself into prosperity solution with globalism.
Stop all food sent to the chicoms. Let them starve.
Agreed. Reverse psychology, no more exports to China and cut the imports too. That will never happen though, with our current leadership.
The article is simply incorrect. The Chinese are not paying Danish owned ocean carriers for example to reject US Export cargo. The reality is that if you take a loaded container to China it takes as much as 30 days to clear customs and deliver. When an export container pays USD 1500.00 from Oakland to China you are better off to take an empty and get it quickly loaded with cargo that is paying USD 15,000 plus back to the US. You make more profitable use of the container by moving it empty. It is supply and demand, not some conspiracy.
The left owns this!
Let’s go Brandon!
So is California is not part of US anymore?
California is a sanctuary state, not subject to US laws.
I think Hawaii is a sanctuary state as well. There are also sanctuary cities in the US, even DC, so really, these cities and states aren’t subject to US laws. Trump tried to withhold Federal government payments to US cities and states but the courts blocked him, so those cities and states have an odd relationship to the US, that they don’t have to follow US laws, essentially removing them from US sovereignty and jurisdiction, but the US has to send money to them.
So the answer is “no”, they’re not part of the US, but they do have elections for Representatives to Washington to appropriate money to be sent by the US to California.
Granted, it is a complicated relationship involving sovereignty, jurisdiction and payments, especially entitlements, but it does seem California and its residents are entitled to payments from the US, but being a sanctuary state, it’s not subject to US laws and sovereignty.
It does seem the US is obliged to protect California from invasion, but that’s optional as well, in that the US and California have on open borders policy, or don’t have a border with Mexico.
Tulsi Gabbard, former US congresswoman from Hawaii and US Presidential Candidate, said during an interview, if you don’t have a border, you don’t have a country, so likely the US isn’t a country as far as California is concerned, and California could be part of Mexico.
I think the US does pay social security benefits to Mexican Nationals who were working in the US, if they made social security payments into US Social Security.
I’m not advocating for breakup of the US, but it seems to be an ongoing legal process with laws, courts, Congress, Presidential executive orders, state legislatures and city counsels leading to a sort of fragmentation of the US, with it becoming more of a global entity with a gradual breakup, which this article about farm produce from California Producers being left to rot on docks and in warehouses while Chinese goods are brought in on a priority basis, meaning Chinese producers have priority. It’s not surprising China would give priority to Chinese products while American products are left to rot.
Unsurprisingly, American agricultural producers have little if any leverage with anyone. Washington has little interest, since as a voting block, they don’t amount to much, and barely a blip economically, compared to the Big Tech companies in Silicon Valley.
Likely the American agricultural sector will continue it’s economic collapse while American agricultural farm land is bought up by big tech billionaires such as Bill Gates, who I have read is the largest holder of US farmland, which has become a commodity in its own right.
Steven, stop spreading misinformation. Its crap like this that confuses people from facts and “opinions/misinterpretations”. Sanctuaries were regional responses to the controversial US immigration policy during the flooding of migrant caravans . CA would need to declare succession from the US and be it’s own country to no longer adhere to US laws. CA is still a state of the US and is still subjected to US laws while there is inter-state commerce, congressional representation and receiving federal funding and aid.
When did enforcing immigration laws become “controversial”?
The only “misinformation and crap” being spread is in your post. If you don’t realize the California legislature is corrupt as it is, you are either naive or support that corruption.
Steven, you are so wrong. Sanctuary states, counties, cities are only for protection of immigrants. They do not call I.C.E. on people here illegally but I.C.E. can go into those areas and arrest people. Sanctuary, in the sense you are using it, does not mean they no longer are a part of the US. They still follow federal laws, pay federal taxes and get federal funding. You n;ed to do your homework about sanctuary states
Yes. That is the California legislators version of states rights.
Why so much hates here? This is a free world and people are doing free trade. You just need to pay more to get your containers. Don’t cry like a looser.
Build back better ? LGB !!
Olympus has fallen we just don’t know it yet.
Only a LOSER doesn’t know the difference between loser and looser….
How about we source more product domestically and not be beholden to a communist country that has world-domination via economic means (for starters)???
Trump was correct once again!
I read most of this piece of article here. It never mention why Foreign shipping company choose to ship empty containers instead of agriculture goods. It left blank for a reason, it make you think Chinese government do it for political reason. Actually it is not, those shipping company can’t wait that long at the dock for those agriculture goods to be put in the container to be shipped because the infrastructure is sooo outdated at the Los Angeles and Long Beach port. It is a complete mass over there. There are more than 60 ships are waiting at sea for off loading till their turns. Sometimes you have to wait for weeks or month just to make those American goods ready to be loaded in the containers to be shipped. I find it is very interesting that American never correct our own mistakes and learn from others instead of just blaming others. It’s just sad.
Agree. There’s no evidence offered by the author to support her allegations. All freight costs are paid by the purchaser, not the seller nor a government.
I would not surprise me to find out that we exported the ability to make our own containers.
China probably does not want our dirty fingers on the Han containers.
Now Audrey, that’s just plain funny!
Freight Forwarder is right. It’s a super basic business decision to maximize profit. No conspiracy here.
Oh, gee. Let’s make American-flagged ships be built at pricey, Union-controlled shipyards and manned by pricey Union workers at 3X the cost of what it takes to build and operate a foreign-flagged vessel. What could go wrong?
This is the Jones Act, come home to roost.
No question US ship building went extinct, except for military vessels, while giant shipyards in S. Korea build much of the world super ships, container ships and supertankers.
I think China is also building lots of ships,nespecially military such as destroyers, frigates, submarines, even aircraft carriers.
I doubt the US could even build a supertanker at any price.
The ships structures are prefabricated, moved into place by massive cranes, then welded together, the laborers being highly skilled and I think robots may be involved in some of the processes.
Robots are taking over much of the work in high tech industries from ship building to computers, and China, while it has an enormous labor pool, actually is moving very rapidly to robots in its high tech manufacturing sector.
Think China’s about to take Taiwan, CalPERS (state pension) has $3 billion invested? in China $450,000 in 14 blacklisted companies (Belt & Road?). (calSTERS- teachers pension has $32 mil invested in Ukraine) CriticalDfense9 has a valid point, maybe part of why Newsom is working overtime to block Kevin Kiley’s measure for audit of California, in addition to WEF and Pharma ties.
Are THEY merely responding to our economic warfare? hello tariffs what do you think provoked this? just as russia would be let down before the cold war. we have a terrible track record of being honorable to other countries.and russia was an ally they did their part as agreed and we didn’t show a tactical strategy that worked crippling the military even though they fought for us and we dis a no show so maybe point blame where its deserved. Chinese are good honest people dealing with what they know and situation best they can just as every American. And im a full blooded born American and family has been here for hundreds landing in like 1600s so maybe if we did what we said or couldn’t just flip ploicy so easily with each administration this would lessen in occurrence..We fired first so realize our part before assuming they are so terrible. Its us that are real big dicks sometimes too.
I’d like to take a moment to point out that Rep. John Garamendi (D-CA) and his associates have put us into this mess, yes some Republicans too but Jerry Brown was All About ties to Red China. The worst part of this is these are all Academic type people with little to no know how of how things are made and what it takes to do them. In essence they know nothing of the nuts and bolts of making things but put policies in motion and never look at the results.
The simple fix is to stop buying made in china. However that’s just a nice phrase like eat more vegetables. Guarantee most people will say yeah don’t buy made in China but after 2 days they’ll go right back to Amazon and choose the cheaper made in China knockoff with the weird westernized sounding names. Until purple make the effort to stick to US brands we are china’s b+-ch when it comes to consumer goods m
China makes the real US brands such as Apple and many tools etc. They are not knock offs they are produced more cheaply in China. You can blame the US corporations for that. Latest example is Musk’s new Tesla factory in China.
Hey Steve you’re all wrong enough already California is the fifth largest economy in the world don’t forget that .
We didn’t have this problem when Trump was in office. Biden is a failure, Newsom is a failure, and mayor Pete is a failure.
But with ballot harvesting and ballots being sent to last known (California) address, Newsom and all other statewide offices are a lock. No one is going anywhere until the public unions say so.
We might pick up a city councilman or two.
We didn’t have this problem when Trump was in office. Biden, Newsom, and Mayor Pete are all total failures.
President Poopypants and his economic Titanic!
F China… We need to boycott everything from them and just buy strictly American products..Two can play that game.An eye for an eye..
Do not forget that the Drooler, Pelosi, Newsom and most of the rest of the democrats are all in the pocket of the Chinese. This is economic warfare to bring in the Great Reset. By all means Buy American!
Make all of that food that might go to rot into storable food and sell it to Americans for the days ahead.
It’s amazing how stupid and neutered our American officials react in a challenging or chaotic situation. We have the power to deal timely and effectively with these situations but for the stepping on a buddy’s toes effect. No other country would perform handwringing as much as we do. American leaders need to grow a set!
This is one of thousands of reasons why America First policies matter. Those sell-outs and traitors in BOTH parties must be removed and voter ID laws must be enacted in order to bolster voter integrity. I used to love my country and my state. I do not anymore.
I’ll start worrying about Calif farmers when they start worrying about landlords not being able to evict for over 2 years and more obstructionist laws against landlords. Till that happens the crops can rot because Calif is rotting.
The author offers no evidence to support the statement below. Yet these allegations are what fosters hate of Chinese. Typically, it is the buyers that pay for the freight. So how does China pay shipping carriers? This is one article that belongs in the category of don’t believe everything you read.
“China pays shipping carriers so much money to export Chinese-made goods, they are then paid a premium to carry the empty containers from America back to China. As a result, hundreds of thousands of containers with American products are delayed or remain sitting rotting on American docks in American ports while foreign customers wait.”
California Now- Alot of our grocery stores have empty shelves or Low Stock And the items that are in stock are quadriple the price. Immigration is a joke here. They have access to “free” money, “free” healthcare, automatic approved loans, free government phones(all by phone!) And can apply drivers licenses here.. Free for them but not for US citizens who will end up paying for it. 40yrs here and it’s the worst I’ve seen… California sucks! Agreed boycott trade
Free markets, no government involved is the solution. Supply and demand is simply the culprit here. I hated when people blame government officials for trade on perishable food. My local market throws in the trash old produce and fruits that did not sell in time, well someone overbought and someone oversold.
Quit with the who has a bigger d**k. Democrat or Republican corruption runs deep within both parties. Government doesn’t work for the people they work for corporate america. Until everyone realizes this nothing will change.
If this is true trade war with China will not really not happening the Biden Administration are in it that include the Governor of Gov Gavin Newsom the Nephew of The Speaker of the House when the Country run by this People the call it Democratic way FBI can’t do nothing they are part of and America owe Bank of China US Government BARROWED Money since the 80 and 90 there’s nothing they can do
Force the shippers to have to take a load back if they want access on the inbound. US has full control of the inbound. Force their ha d to accept both or nothing.
Then shippers will charge premium for every US bound shipments, which will add on the cost of products you are going to pay.
It’s in the article, China pays a premium for the empty containers. If Americans are so dirt poor where they can’t compete for shipping containers, then it’s pretty much their fault. Capitalism and supply and demand. Even as I type this, we have a bunch of empty containers in the yard destined for China. They paid us more than what some American schmuck was willing to pay. Old saying “cough up the dough.”
This could actually help us out.We could just keep it here in USA.It would probably even lower prices in store.
I’m tiered of our leaders being so selfish and destroying our country it’s sad ! What’s going to happen we are going to damage our country from. Within if we don’t become one .what’s it going to take become a country again or are we to far gone its scary .this great nation is failing
Hmmm. Wonder if anyone pissed China off by calling Coronavirus the China Virus. What about renegotiation of all trade with foreign countries with zero knowledge of existing trade agreements or considering the ramifications. Who was it who did that? Then somone paid all our farmers increased subsidies to make up for the lost trade overseas. Hmmm. Could that cause inflation and loss of business for growers?
I agree we live in a capitalist country, why are we so upset with people making capitalistic choices for themselves. I’ll tell you why because we Americans love to be huge Hippocrates to everyone. We see ourselves as intitled and above others that work harder and have more values than we do. We need to either buckle down and say no to Chinese import or shut the fuck up and bend over like we have been doing.
Let’s Go Brandon.
Instead of fighting as Republicans and democrats. Please unite and fight against these evil forces. Most of the corrupt countries know that today US is divided, they are taking advantage of this situation. God Bless America.
Americans created this problem, and now they can see the fruits of their labor.
This country is f’d because of ignorant articles like this and the even worse comments here. China is not paying a premium for anything. Companies selling higher profit goods want empty containers because they don’t have to sit in Chinese ports for months waiting to be inspected. Since they’re empty, they can immediately be loaded up and shipped somewhere else. A pound of almonds takes up more room than an iPhone, and the iPhone is worth a lot more. It’s simple economics.
The Writter is misleading readers with false accusation of China’s conspiracy. Its a demand and supply equation in free market.
American importers pays for the freight charges FOB, not Chinese sellers. For China high value goods, they might willing to pay $15,000 per container to shippers VS China’s buyer paying $1000 for US agri.
So why would any shipping company wants to waste long time waiting in US ports for the farmers to load products over just $1000, consume fuels and taking longer time to return to China, and stucks in custom again to clear the US food products.
They might as well return with empty containers quickly to make another round of shipment for China’s products that fetch more profits within same period, thus maximizing their assets investment return.
When container shortage become too critical, US farmers will have to pay enough to entice shippers to ship their agri products, which will cause delay to China side, thus forcing US importers to pay higher to get containers back quickly in a vicious cycle until balance of demand and supply reach.