Some ag shippers are still using the Port of Oakland to send wine, walnuts, fruits, vegetables, hay and rice to foreign buyers, but many other exporters are also looking for alternatives to the key — but troubled — West Coast shipping point.
For example, a Union Pacific train carrying 100 cars of almonds, feed and grain that would normally be exported out of Oakland took those commodities down the California coast Tuesday to the ports in Los Angeles and Long Beach.
For some perishable commodities such as fruits and vegetables, shippers cannot avoid using Oakland, but that’s no longer the case for more durable crops such as almonds.
“We are committed to working with the Port of Oakland on finding what their future needs to look like to work for us,” Aubrey Bettencourt, president and CEO of the Almond Alliance of California tells Agri-Pulse. “In the meantime, I need to move nuts to save my market.”
More oceangoing vessels are docking in Oakland and taking on containers of farm commodities these days, but supply chain woes continue to choke exports as fears rise about the future of the port.
Ocean carriers, the companies that own the ships, were increasingly not allowing American ag shippers to load containers on their vessels in recent years and instead rushing back to China to pick up even more goods to meet spiking demand in the U.S.
When it comes to the Port of Oakland, some carriers decided not to even dock there at all.
That’s changing slowly, but ag exporters are still facing frequent “rollovers,” which means they are pushed to subsequent ships, as well as small time windows in which to get their goods loaded.
Aubrey Bettencourt, Almond Alliance of CaliforniaThose rollovers are one of the worst problems at Oakland, says John Aguiar, director of international sales for the Mariani Nut Co.
“Yes, it is better than last year,” Aguiar said about Oakland, “but last year was just above a full-scale disaster. There have been improvements, but nowhere near to what we need to operate in a normal fashion.”
More ships are coming to Oakland, but shippers can never tell if they are actually going to be able to use them.
“We do have carriers coming back around, saying, ‘Hey agriculture, we’d love to take your stuff again. Let’s talk about ways we can facilitate that,’” said Tracey Chow, a federal government affairs specialist at the Western Growers Association. “There are more ships coming in, but not at the rate that would work for our guys.”
Container rates are coming down, too, but they are still high, and the average time window to get a container loaded onto a ship is still much too tight, says Chow. Before the pandemic, a shipper might get 24 to 48 hours. Last year that dropped sometimes to just four hours. Now, it ranges between eight and 12 hours.
While the California almond industry has not yet given up on Oakland, it is moving away from the port quickly.
Almond shippers are also using facilities at Oakland as a transfer point to move the nuts down to Los Angeles, where the transition to oceangoing vessels is smoother and more reliable.
It was in April that Bettencourt said she realized that a big change was needed for the almond industry. She began talking with railroads, ocean carriers, port officials, farmers, processors and handlers and that work is now paying off with new alternatives.
Signs of recovery at the port were appearing before summer when a truckers’ protest snarled operations for a week in July, reversing some small progress on reducing backlogs.
“The Port of Oakland is experiencing ongoing supply chain issues which have been exacerbated by a week-long boycott by independent truckers,” the port said in a statement. “It is estimated that it could take a month before the port traffic will recover from the protest.”
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The port said recently exports in July this year fell to just 47,166 20-foot containers, about a 31% drop from July of 2021.
Operations are in full swing now and fewer ships are leaving for Asia with empty containers than at the height of the port’s woes over the last couple of years, but it’s just not enough for the ag sector, which needs to get crops to foreign buyers on a reliable schedule, say industry representatives.
Aguiar says he worries about his clients losing confidence in his company.
After reaching several deals, Bettencourt says almonds are now hauled by Union Pacific every week to Los Angeles and Long Beach.
About 85% of all California’s almonds were exported through Oakland before the pandemic, and Bettencourt says she expects that to drop in half this year.
She said new rail ramps are being built closer to processors so almond shippers can skip the Oakland facilities altogether. One of those new ramps is expected to come online by the end of this month in Oakdale, northeast of Modesto.
The Almond Alliance is also negotiating with railroads and carriers to ship nuts across the country to the Port of Norfolk, Virginia, for export to the European Union.
For vegetable farmers, it's Oakland or nothing, said Chow. They either get their produce onto ships leaving Oakland or they are forced to destroy the crops or sell them into the domestic market.
“They keep trying to grow their export business overseas,” Chow said. “Oakland is what they’ve got. They can’t afford to make the trip down to Los Angeles and Long Beach.”
Tracey Chow, Western GrowersThat’s why the expected loss of an entire terminal at Oakland is especially concerning for fruit and vegetable farmers that want to export.
On June 30, a city commission in nearby San Francisco ruled that the Howard Terminal at the Port of Oakland could be used for other purposes besides port activities. That paves the way for plans to build a new stadium there for the Oakland A’s baseball team, but it also diminishes the capacities of the already overloaded and congested port.
It’s a topic that was brought up with White House Port and Supply Chain Envoy Stephen Lyons, who toured the Port of Oakland on Aug. 29.
While local government officials and Oakland sports fans are dead set on building the stadium and keeping the A’s from moving to Las Vegas, there is a rare alliance between carriers, shippers, unions and farmers in opposition.
“This is a problem,” said Chow. “You have a local entity essentially dictating a development change that can have consequences to the commerce of this nation.”
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