Limited. Unfair. Unreliable.
Some in Michigan’s dry bean industry may use these words to describe the process of obtaining shipping containers needed to export their beans out of the state.
The problems bean shippers face are an unavailability of shipping containers to export goods and a lack of communication among ocean carrier companies about the location of containers.
Shippers and other industry experts attribute part of their problems to allegedly unethical practices by ocean carriers, which include making a quick profit by returning empty containers to Asia to have them quickly filled and sent back — rather than taking time to send them across the country to be filled and exported.
The U.S. Senate passed a bill in March that could simplify exporting and transform the arduous narrative shippers describe when attempting to acquire containers.
The Ocean Shipping Reform Act of 2022 was introduced by Democratic U.S. Sen. Amy Klobuchar of Minnesota and cosponsored by Michigan Democratic U.S. Sens. Debbie Stabenow of Lansing and Gary Peters of Bloomfield Township.
It would prohibit ocean carriers from unreasonably denying cargo space for exports when it’s available, require carriers to report the tonnage of imports and exports per vessel to the Federal Maritime Commission, which regulates ocean commerce, and authorize the commission to investigate scenarios when shippers hold onto containers for too long.
The legislation “takes basic common-sense steps to address the problems that have been created by the big ocean carrier companies,” said Chuck Lippstreu, the president of the Michigan Agri-Business Association, based in East Lansing.
For Michigan’s dry bean industry, exporting is critical.
Joe Cramer, the executive director of the Frankenmuth-based Michigan Bean Commission, said the state exports about one-third of its dry beans. He said Michigan is the second-largest producer of dry beans in the country, behind only North Dakota. It leads the country in black bean production.
According to the 2017 Census of Agriculture, Michigan harvested over 500 million pounds of dry beans in 2017, from 1,085 farms with 225,334 acres dedicated to beans.
Seventy-five percent of dry beans are produced in the Thumb region, including Huron, Tuscola, Sanilac and Bay counties, according to Cramer.
Black beans are exported to Central and South America. Navy beans are exported to the United Kingdom, Ireland and Italy. Kidney beans are exported to Spain. And if red beans are exported, Cramer said, they go to islands like Jamaica and the Dominican Republic.
But if bean shippers can’t receive containers, Cramer said they’re stuck.
“If you had one week and you needed 50 containers for that week, you might’ve got four,” he said. “And so next week you need another 50, plus the 46 you didn’t get, and you got another four.
“It just keeps compounding itself, and it’s really difficult to catch up.”
And if shippers are stuck, dry bean production by farmers halts.
It’s like the domino effect, Cramer said. “If you can’t get (the beans) out of the way, you don’t need the next batch coming at you.”
Lippstreu said part of the reason shippers have a hard time securing containers is because there’s a lack of transparency among ocean carriers.
Instead of transporting empty containers that are along the U.S. West coast to Michigan shippers that need them, Lippstreu said ocean carriers send them to Asia to be reloaded and sent back, speeding up carriers’ turnaround time.
“Big ocean carrier companies have determined that might be good for their business, but it’s certainly not good for Michigan agriculture,” he said.
In response to the proposed legislation, the World Shipping Council, an industry group, released a statement saying the suggestion that ocean carriers are solely responsible for backlogs in the supply chain is “simply untrue.”
The council said the legislation is infused with “fundamental unfairness” and “due process violations.”
In March, the Federal Maritime Commission announced that it is expanding its audit program to evaluate how ocean carriers are serving U.S. exporters.
Daniel Maffei, the commission’s chair, said in a statement that U.S. exporters have the same right that importers have to the services that ocean carriers provide.
“American exporters deserve access to ocean transportation to sell to international markets every bit as much as overseas sellers get access to U.S. markets,” Maffei said. “The commission’s expanded ocean carrier audit program will provide better visibility into which ocean carriers work well with U.S. exporters and, more importantly, which ocean carriers can and should do more to support exporters.
“That said, the commission is committed to an ocean transportation system that serves exporters as well as importers. I will not rule out any action within the bounds of the law that helps us achieve that goal.”
Caleb Sundblad is a marketing manager at Cooperative Elevator Co. headquartered in Pigeon in Huron County.
It’s a full-service co-op serving about 1,100 members, according to Sundblad, with services that include crop protection, grain marketing, quality assurance and energy sales.
What sets Cooperative Elevator apart from other co-ops, Sundblad said, is its dry bean team. He said the division is one of the largest bean handlers in the country.
He said when his company is denied containers, it’s usually for either of two reasons: the containers aren’t at the ports where they’re needed, or there’s not enough capacity to haul the containers from its facilities to the ports.
Lippstreu said if Michigan can’t transport its food goods to other countries, other suppliers elsewhere will step up.
“We’re proud of our roles as a state that helps feed the world and supplies food to countries across multiple continents, but if we’re not able to maintain that export footprint, we can lose those markets,” he said.
“We’re in a global economy. If Michigan cannot fill the demand that’s out there for food products, others will.”
The bill, which had previously been passed in the U.S. House with bipartisan support among Michigan legislators, has been sent back to the House for further consideration.
Representatives from Michigan who cosponsored the bill are Democrats Daniel Kildee of Flint and Haley Stevens of Rochester Hills, and Republicans Fred Upton of St. Joseph, Peter Meijer of Grand Rapids, Lisa McClain of Romeo, Bill Huizenga of Zeeland, John Moolenaar of Midland and Jack Bergman of Watersmeet.
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