The logistical problems in the United States are piling up. Exports of agricultural goods have suffered a major slowdown and there are few signs that the situation will be resolved in the short term. At the same time, the import of, among other things, medicines is also starting to affect animal feed. What exactly is going on and what guns is the Biden administration pulling out of the closet to get out of this crisis?
Logistical problems in the United States are not new. For some time now there have been huge traffic jams of ships in the ports of San Francisco and Los Angeles, where many (agricultural) goods leave the country. The Agricultural Transportation Coalition has calculated that 22% of agricultural exports have been lost as a result of the troubles. Americans cannot get the corona disruptions under control.
Dairy exports in trouble
The American dairy sector recently sounded the alarm because it was unable to get the products out of the country. This prank has already caused $1 billion in damage this year. On top of that, the reputational damage is added now that American dairy exporters are being labeled as unreliable in terms of security of supply. California Dairies, which focuses heavily on the above-mentioned seaports, reports that 60% of shipments have been canceled or delayed. They estimate the damage at $45 million per month.
The meat sector is also hitting walls. The meat export federation in the US (USMEF) recently indicated that the cold stores around ports are full due to the slow sales. Grain logistics are also difficult. Hopes are pinned on the White House, but President Joe Biden does not have a solution immediately available.
Shortages of animal feed and antibiotics
Not only exports, but also imports of goods are faltering and stalling. For example, there have been shortages of medicines and feed ingredients in livestock farming states such as Iowa, Minnesota and Michigan. The antibiotic penicillin is currently almost unavailable there, Reuters reported this week. This puts farmers in trouble. Lysine is also extremely scarce. Smithfield, one of the largest pork producers, has indicated that the shortages could affect food security over time. There are also concerns about the availability of non-food products in the run-up to the holidays. A meager Christmas looms.
Also long-term problems
There are major logistical challenges not only in the short term, but also for the longer term. The American Trucking Association released a report last month saying there is a staggering shortage of as many as 80.000 truck drivers. And an additional 2030 drivers are needed until 80.000 to meet the rapidly growing logistics demand. Transport costs are likely to increase significantly due to the shortages, it is expected. In addition, American infrastructure often dates from the middle of the last century. The logistics arteries are old and inefficient. The Port of Long Beach in Los Angeles is ranked 333rd among the most modern ports in the world in a World Bank ranking. An average port in Africa has more gadgets.
Biden pulls out his wallet
The Biden administration indicated last week that it would invest $17 billion nationwide in modernizing ports and water infrastructure. The governor of California will ensure that a substantial part of this amount will be invested in the two major seaports in this state. These are noble intentions, but in the short term this will not make any difference.
There are signs that the peak of logistics disruptions is behind us. The director of the much-discussed port in Los Angeles claims that the container traffic jam is shrinking. At the end of October, the number of delayed containers was estimated at 71.000, but this number has since decreased by 25%.
Today it was announced that a US Navy port on the Californian west coast will be used to unload seagoing vessels. Little by little, America is trying to get out of this logistical infarction. However, there is still a long way to go.