Before the pandemic, enormous shipping vessels bound for the West Coast of the U.S. from Asia usually took the same predictable and profitable voyages. After docking in either the port of Los Angeles or Long Beach, the ships would unload their cargo and then head up north to Oakland, where they stocked up on agricultural goods from California’s expansive farmland. This cargo would ultimately end up in markets around the world after journeying across the Pacific and disembarking in Southeast Asian ports. The ships would then load up on more manufactured goods and start the process all over again.
Of course, the Covid-19 pandemic threw this once reliable system into complete disarray, leading to massive delays at ports and sending costs through the roof. All of a sudden, the humble shipping container took on world-shaping importance as shortages of both containers and palettes compounded on companies’ problems. With overseas manufacturers desperate to get their containers back from U.S. shores as soon as possible, many are paying high prices to bring ships back to Asia as soon as they unload in L.A. or Long Beach. While shipping companies earn billions off these deals and manufacturers get their containers quickly, farmers who once depended on ships to make that additional trip up to Oakland have been left in the lurch. California growers are now sitting on millions of pounds of produce that has already been sold but cannot be sent to customers.
For example, the almond growing enterprise Travaille & Phippen is currently bursting at the seams with more than 30 million pounds of almonds that are supposed to be bound for Asia, the Middle East, and Europe. With no available ships to take their products, however, the company is sitting on an unbelievable amount of stock that it cannot make money on until the items are shipped and received. “Those almonds aren’t worth squat in the warehouse,” said grower Scott Phippen. “They are worth a lot of money in Dubai.” To make matters worse, the company might not be able to store their upcoming crop of almonds if their old stock continues to languish in the warehouse. Federal regulators are considering intervening in the situation to prevent shipping companies from transporting vessels full of empty containers back to Asia while American farmers fear for their futures. Shipping companies have countered that they are simply following the market and that unnecessary overreach could lead to further inefficiency.
- Why are California farmers like Travaille & Phippen struggling to ship their goods to overseas markets?
- Do you think the federal regulators should intervene to prevent shipping companies from bypassing American farmers? Why or why not?