The State of U.S. Agriculture Exports: 5 Takeaways from AgTC

GSC ∕ May

Agriculture exports operate differently from other export products. While all importing and exporting companies face different sets of challenges, agriculture shipments have a narrow window for timing. While a missed ocean vessel or delayed ocean vessel departure in any export causes a backlog within the supply chain, in agriculture the goods also have an expiration date they’re working against or require specialized storage. To find common solutions to industry-wide challenges and highlight opportunities, each year the industry comes together at AgTC.

The Agriculture Transportation Coalition (AgTC) hosts AgTC annually to bring together industry associations, transportation providers, and agriculture exporters to discuss the challenges and opportunities for ag exports. This year, GSC President Dave Arsenault kicked off the conference with a presentation highlighting an overview of the supply chain industry and the impact on the global supply chain trends in the agriculture industry. Beyond Arsenault’s presentation, many other industry experts discussed approaches to overcome challenges and more. Today, we’ll continue the discussion of key topics from this year’s conference. The American Journal of Transportation provided an excellent recap of some of the key messages delivered at this year’s conference and we want to continue the conversation inviting those not in attendance at AgTC to weigh in as well on these critical industry updates. 

The main themes at this year’s conference were around supply chain disruptions. Some key challenges facing agriculture exporters are: 

On-time vessel performance 

Agricultural products, more so than other types of goods, are heavily reliant on an on-time exporting schedule for a myriad of reasons. The food itself can only be harvested at a certain time, and harvest starts the shelf life of the product, and storage options are limited. Some agriculture goods require refrigerated or freezer transportation, known as Reefer. 

Natasha Vang of Touchstone Pistachio took to the stage at AgTC to discuss how ocean vessel booking schedules impact Touchstone Pistachio. In 2024, Vang cited the company experienced changes in 29% of its bookings. The changes in bookings causes disruptions to the company’s trucking and warehousing operations. In an industry where margins are tight, this can have a huge impact on a supplier. 

In the case of Touchstone, one specific example was a delay of 18 days (about 2 and a half weeks) for a loaded container that was supposed to be exported sitting waiting for availability. However, even with a container “sitting,” costs add up. The exporter still must pay daily equipment charges, container storage fees, and a delay in customer receipt of goods leading to a delay in the time the company can invoice and get paid. These delays all have a cost, and the costs of the delayed ocean vessel departure fall heavily on exporters, all while straining relationships with their customers. 

The pistachio company looked to solve this by working directly with an ocean carrier, MSC, to address vessel on-time performance. Since the partnership, the ocean carrier has worked to minimize these issues. Partnerships 

Rail Break-Ins 

Many agriculture exporters are located in the interior of the United States. To export effectively from places like South Dakota, Nebraska, etc., involves rail, trucks, and ocean vessels just to get the cargo overseas. One of the bigger issues facing the agriculture industry leveraging rail for transporting goods is break-ins. At AgTC this year, two different speakers from different companies mentioned issues surrounding rail break-ins. Often, once people open the sealed containers, they aren’t stealing the goods, but now the agriculture exports are compromised. In the case of reefer containers, this can also cause temperature control issues. 

Once the cargo is on the rail, it’s out of the hands of the exporter. Unfortunately, neither the rail providers nor the port employees are aligned with the exporters on procedures following break-ins. Rail and port workers will replace or re-seal containers that have been broken into without notifying the exporter. The result? The customers are receiving compromised goods and must dispose of them. 

This places a strain on the customer-exporter relationship, as it’s an added cost to the customer to discard compromised goods and reduces faith in the exporters’ ability to maintain control over their cargo. 

While the solution for this isn’t clear, technology regarding seals and tracking may help. This is a topic that the industry will have to keep a close eye on.

Vessel ERD and Cut Off Challenges 

The opportunity for efficiency erosions increases with each link you add to the supply chain. A myriad of factors can impact the domestic leg of exporting including everything from equipment shortages, theft and break-ins during rail transit, not allowing truckers to inspect containers, and more. 

However, another topic of concern within the domestic leg is shifting the earliest return and latest return dates, known as ERD and cut dates. Ocean vessel owners are currently allowed to continuously update and move ERD and cut dates – even within seven days of a booking. While the implications of moved ERD dates may not be evident, these changes can have major impacts on exporters. Another layer of the ERD data, is the lack of data standardization from various ports and ocean carriers. This means that two separate vessel lines coming into the same port may define ERD differently, and they may also update their systems at different times.  

The shifting dates caused previously planned warehouses optimized for efficiency to be under-booked during the week and overbooked the week after. Additionally, often agriculture exporters accept goods from multiple farm sources, and when a backlog like this occurs, their farmer customers cannot drop off any more goods. When you add the additional confusion and tracking of reviewing unstandardized data, all updated at different intervals, the complexities only increase.  

While the data visibility and reliability quotient are huge factors impacting operations, it’s an easier solve than drawing a line in the sand for shifting ERD dates. During AgTC, Kevin Speers of Splice and Tony Wringe of Digital Container Shipping Association discussed different goals for aggregating and standardizing data to improve supply chain efficiency.  

On the other side of the coin, Janelle Stahl of SB&B Foods highlighted concerns regarding the shifting ERD dates and the impacts on operations on the AgTC stage. Stahl’s proposal? She advocates for the industry to work with the Federal Maritime Commission (FMC) to pass another bill restricting the ocean carriers from changing the ERD once it is within seven days before the listed ERD on the booking confirmation. 

Global supply chain disruptions 

The global disruptions are having trickling and lasting effects on every industry and the global economy. After years of discussing this, the whipsaw effect from the Pandemic is still in full effect. Dave Arsenault, President of GSC, discussed the impact on supply and demand we’ve seen on imports and exports following the COVID-19 pandemic. This has caused cargo volatility across the board for the past few years. 

As we’re starting to hopefully see the supply and demand shift back to a sense of normality, there are still other factors causing supply chain hiccups. However, while the pandemic’s effect is starting to normalize, we’re seeing other factors impact the global supply chain, such as labor disputes, the low water levels at the Panama Canal, the global tensions impacting the Red Sea and Suez Canal, start to impact the supply chain industry heavily. The ocean vessels have had to take longer than usual routes to safely and efficiently transport cargo. This results in increased shipping costs and port congestion: increased prices and more backlog. 

Arsenault points out that planning for the unplanned is the best approach when looking to minimize disruptions. There are a few ways to approach this, including shipping into various U.S. ports instead of a select few, selecting strategic partners, and tapping into your industry associations for shared knowledge. 

Policy Changes 

There have been a lot of policy changes recently that impact the community. From the OSRA ruling on detention and demurrage to environmental policies – policy has a large impact on the supply chain as well. From increased funding for new environmental initiatives to understanding new labor laws, it’s critically important to know what policy changes may be on the horizon. Additionally, federal tariffs issued against other countries by the United States can expect to affect global trade. 

When it comes to policy changes, it’s best to stay informed and learn from others within your industry about how they are adapting to the change. Additionally, selecting smart partners will help you stay ahead of certain policies, by shifting a portion of your supply chain to them to handle and adhere to policies. When you’re working with your industry peers, you can also start to understand what common issues you’re facing and how to advocate for policy change to better your supply chain operations. 

The agriculture segment of the supply chain is undergoing its fair share of challenges but also opens the doors for more opportunities. While the industry faces its challenges, AgTC serves as a great reminder that when people come together and share knowledge, it empowers others to better handle similar issues, increasing advocacy and improving the supply chain for all agriculture exporters. It’s important to realize the power of tapping into smart partnerships and selecting the right business partners who have the flexibility to meet the unique demands you’re facing. 

Additionally, the exchange of best practices and innovative solutions at forums like AgTC can spur new initiatives and collaborative efforts that address common pain points. For instance, partnerships with technology firms to develop advanced tracking systems for cargo or working closely with policymakers to streamline regulatory processes can make a significant difference. By fostering a community that actively seeks to tackle and resolve issues through collaboration and innovation, the agriculture export industry can navigate its complex landscape more effectively. This proactive approach not only mitigates existing challenges but also paves the way for a more resilient and efficient supply chain, benefiting everyone involved from the farm to the global marketplace. 

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