Port delays force farm exporters to get more creative

By Ching Lee

Frustrated with ongoing delays at West Coast ports, California agricultural exporters are increasingly turning to alternative routes and transportation modes to move their products as they try to navigate another busy shipping season.

For nearly two years, they’ve struggled to get their goods on the water, missing crucial deadlines for major holidays, whether it’s Christmas, Diwali in India, Lunar New Year in China or Ramadan in the Middle East.

This year, desperate to get their products out of the country faster, agricultural exporters are using more rail service and different shipping strategies to bypass West Coast ports, particularly the Port of Oakland, which has seen reduced vessel services by ocean carriers.

“They’ve had to get more creative with how they think about things, the carriers that they work with and how they operate in general,” said Brock Densel, a senior analyst for the Almond Board of California.

For example, almond growers and processors this summer launched the so-called “almond express,” two rail lines that transport almonds and other agricultural exports from the Port of Oakland and from the southern San Joaquin Valley directly to the ports of Los Angeles and Long Beach.

Densel said it is this creativity that helped almond exporters ship more product in May, June and August. Shipments slowed in July due to port disruptions from trucker protests over the state “gig-worker law,” with the Port of Oakland shutting down cargo operations for five days.

Don Barton, a walnut grower and handler in San Joaquin County, has resorted to shipping goods by rail to the Port of Virginia in Norfolk, currently rated the fastest port in North America. He noted the cost is on par with Oakland or slightly more—and “doable.” But he said Norfolk has now begun to experience some vessel congestion, as more shippers choose this route.

Barton and other walnut growers are looking to a new proposed inland port in Oakdale that they say could give agricultural exporters yet another option—and faster service.

“We have to have as many different options as possible to keep freight moving on a timely basis,” Barton said.

The Oakdale property is owned by Central Valley Ag Group, which specializes in logistics services, specifically transloading, as one of its businesses. The Stanislaus County-based company receives a trainload of feed products each week from the Midwest at its 80-acre facility in Oakdale. The train typically goes back to the Midwest empty.

Todd Lush, a principal of CVAG, said his company wants to allow California agricultural shippers to use the Oakdale location as an inland hub to load their products, and then move them by rail to the ports of LA and Long Beach, where all ships coming from Asia make their first stop. But the feed is not transported in ocean containers. Railroads use hopper cars to move loose bulk commodities such as grain.

Lush said he has been working with ocean carrier CMA CGM, which his company uses to ship exports, to let grain shippers load product in containers instead of hopper cars, so that California agricultural exporters could use them to ship their specialty crops.

Burlington Northern Santa Fe so far has not signed on to the project.

Lush said CVAG has an interest in helping farmers because of its other business in agricultural waste recycling. CVAG buys waste products such as nut shells, pomace and orchard clippings, and processes them into value-added products used for feed, biomass and fiber. Some of those products are exported. In a typical week, the company ships 400 to 500 containers through the Port of Oakland.

Barton said the inland site would be “a huge benefit” to agricultural shippers because it would be closer to farms and processing plants.

“We’re not fighting Bay Area traffic trying to get into the Port of Oakland,” he said. “This would reduce the carbon footprint for truckers that aren’t waiting in lines and burning diesel.”

Barton described the proposed arrangement as “a beautiful arbitrage” for the steamship line, as it would get more complete use of its containers. The railroad would also be carrying full cargo to LA instead of empties, he added.

“It could be a real potential breakthrough for not just the walnut people but for ag shippers that have had so many frustrations with the Port of Oakland,” Barton said.

Lush said talks between BNSF and CMA continue, but if the railroad “refuses to play ball,” then CMA will reach out to Union Pacific, which already operates the “almond express” and might be willing to allow grain shippers to use ocean containers. In any case, he said he anticipates starting the program by the end of the month.

Meanwhile, agricultural shippers say they have seen some improvement at the ports. Barton described Oakland as “somewhat better” than last fall and winter, when port logistics were “an unmitigated disaster.” Shippers began to “make up ground” this past spring, he said.

But he said steamship lines continue to skip Oakland to go either to Seattle or straight back to Asia. Container availability also remains an issue, he said, which means shippers must roll bookings to a later date if they can’t get containers.

With almond harvest underway and walnut harvest barely beginning, Barton said he’s worried about the net impact of the state’s fall harvest and all those exports inundating ports, especially Oakland.

“I’m quite concerned about Oakland’s ability to handle the volume,” he said.

Though there have been improvements, Densel at the Almond Board said ports are “nowhere near at optimal level.” The improvements relate to a slowing of imports, as indicated by freight rates coming down, he said.

But chassis availability remains a problem for shippers, he said, and so-called box rules in which carriers can designate the chassis that must be used contribute to the problem.

Natalie Wymer, spokeswoman for The Wine Institute in San Francisco, said some state wineries that export wine “are seeing a little improvement, but not a lot.”

Satoshi Tanaka, president of East West Wine Trading in Marin County, said there are still long waits getting bookings, but “at least we know that we can get some kind of booking and not at an exorbitant rate.”

This was not so a year ago, he noted, when the Port of Oakland was so backed up that trucks bringing exports sat for days, as did the containers once goods were loaded.

“All of that seems to have been worked out, so now it’s just a matter of waiting to get on the ship,” Tanaka said. “At least now when they say, ‘Hey, we found your container and it’s going to go out this date,’ chances are it does.”

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted. However, credit must be made to the California Farm Bureau Federation