San Francisco – Calling for dramatic action to avert a looming "transport crisis," Peter Friedmann, the Agricultural Transportation Coalition’s executive director, urged shippers here to apply political pressure "before it’s too late."
By Patrick BurNson
Published: July, 2007
U.S. agriculture faces a dire threat, losing domestic and global market share, profit margin and international sales, he said. Simply put, U.S. agriculture can compete with anyone in producing and processing, but domestic transportation barriers are increasingly hindering our efforts to sell competitively in the global marketplace.
Shippers attending the AgTC’s annual two-day conference here had heard it before, but the tenor this time was far more strident.
Dramatic changes in the balance of import versus export trade over the past decade have created conflicting agendas with our international and domestic transportation system is increasingly unable to serve, said Friedmann.
He noted that freight intermediaries are importing ever growing volumes of high value, time sensitive consumer electronic products from Asia (cell phones; MP3 players, laptops, etc…), which move into centralized mega distribution centers in the most densely populated areas of the country.
On the other hand, we are exporting relatively lower valued agricultural products from diverse rural locations, Friedmann said. Generally speaking, these export shipments complicate and slow down this import flow.
Furthermore, argued Friedmann, the transportation system now in place, is designed to expedite imports, and delay exports… a situation he says will have long-term consequences. It could leave some places, such as small Central Valley farm towns, behind.
While the four Class I national railroads are hauling more cargo than ever before, the volume growth is in the containerized consumer goods imported from Asia, he said. This intermodal cargo is offloaded at West Coast ports, and railed straight through, non-stop, to Chicago, St. Louis, or all the way across to the East Coast metropolitan areas.
This inbound intermodal move has become the foundation of ocean and rail carrier’s business model, added Friedmann. The problem gets worse when carriers by-pass inland load points, where agriculture is produced, in a race to get empty boxes readied for outbound deployment.
The result is the growing inability for U.S. ag shippers to gain timely and affordable access to our seaports, he said. This situation reduces already thin margins, and all too frequently creates delays and increases the transport costs to a level which forces purchasers to look at other countries such as Argentina, Australia and Brazil for goods. And, despite numerous petitions by ag shippers, Friedmann says the Surface Transportation Board (STB) has not responded to these concerns.
Senators from farm states have urged the President to appoint STB leadership, which will work to improve rail service, and who have sponsored legislation to revise existing laws which penalize captive rail shippers, reliant on a particular line.
The STB, which oversees the railroads to protect the shipping public, was not the only agency in Friedmann’s sights. He insisted that it’s now time to draft a national transportation white paper.
We must address the transport system as it impacts agriculture – all modes of carriage in all regions of the country, Friedmann declared and says that four specific points should be looked at:
1. Inventory the challenges facing U.S. agriculture exporters (and importers), examining all modes – rail, truck, barge, ocean – in all regions of the nation.
2. Understand how the reduction of service in one mode impacts the ability of other modes to provide sufficient and affordable service for agricultural products.
3. Quantify the dollar impact of these transportation deficiencies on sales and competitiveness of agricultural products and jobs.
4. Provide an inventory of possible improvements or solutions. Set fourth a realistic agenda of steps that the U.S. government and our private sector can take to improve the domestic and international transport system.
