USDEC helped global container shipping and logistics leaders understand the complexity of the dairy supply chain at TPM23 and built new relationships to help avoid another shipping crisis.    

U.S. dairy exports reached new records in value and volume in 2022 and are off to a running start in 2023. But the outlook for the year ahead is not without challenges, including reinvigorated competition from the European Union and New Zealand, demand uncertainty from China, global economic headwinds and the ongoing supply chain crisis.

U.S. Dairy Export Council (USDEC) President and CEO Krysta Harden tackled the latter challenge when she spoke recently at TPM23, an annual supply chain conference hosted by Journal of Commerce. Harden addressed more than 4,000 trans-pacific and global container shipping and logistics leaders during a “fireside chat” with Janet Nodar, senior editor at S&P Global Market Intelligence, which owns Journal of Commerce. Reflecting on the global shipping crisis, she underscored the importance of exporters, shippers, carriers and distributors working together to navigate the “new normal” of pandemic-era global supply chains.

Left to right: S&P Global Senior Editor Janet Nodar and USDEC President and CEO Krysta Harden onstage at TPM23 discussing the supply chain crisis that has harmed U.S. dairy exports in recent years.

Despite robust U.S. dairy export growth over the past two years, challenges throughout the transportation supply chain have been holding dairy exports back from expanding even faster, Harden said. Delays brought on by trucking, rail, port and ocean carrier problems threaten U.S. dairy’s reputation as a reliable and consistent supplier with its customers around the world.

Ports and ocean carriers are two of the key supply chain elements that have vexed U.S. dairy suppliers the most. While many of the port congestion issues have eased (at least temporarily), dairy exporters continue to grapple with a profusion of ocean carrier issues, including costly challenges such as rolled bookings, broken contracts, unjust fees and low shipping container availability.

Next steps for the Ocean Shipping Reform Act
During her presentation, Harden highlighted the U.S. dairy industry’s leadership in addressing those challenges through the Ocean Shipping Reform Act (OSRA). The industry’s work to build bipartisan support for this legislation earned the respect of the entire supply chain.

Since the bill was signed into law in June 2022, USDEC has been engaged with the Federal Maritime Commission (FMC) throughout the rulemaking process in support of new, effective guardrails that protect exporters. Specifically, USDEC is working to ensure that the definition of “unreasonable refusal” prohibits ocean carriers from discriminating against exports like dairy that are perishable and can’t be left waiting on a dock for days or weeks.

In joint comments to the FMC in fall 2022, USDEC and the National Milk Producers Federation asked the FMC to specify that carriers should only be able to deny negotiations or space accommodations for exporters due to “discrete and actionable” needs. USDEC is also continuing to press for increased transparency into shipping schedules and limits on when fees can be incurred.

USDEC's Krysta Harden and NMPF President and CEO Jim Mulhern with President Joe Biden after the signing of the Ocean Shipping Reform Act.   

Looking ahead to greater collaboration
Port congestion and ocean shipping delays and costs have improved considerably from the darkest days of 2021 and 2022. But that does not mean the underlying kinks in the supply chain have been straightened out permanently. In addition, months of labor contract talks between the International Longshore and Warehouse Union and the Pacific Maritime Association have yet to yield results and pose a whole separate supply chain threat to U.S. dairy export trade.

While OSRA puts dairy exporters in a much stronger position to address certain supply chain shortcomings, Harden noted that now is not the time to take the foot off the pedal when it comes to strengthening shipping infrastructure, rules and processes. Collaboration is needed across both regulatory agencies and the private shipping sector to build a supply chain that works for American suppliers and consumers around the world.

Harden pushed TPM23 attendees to think about the perspective of exporters. Her message was especially important considering that she was the only person on the conference’s main stage who talked about agricultural exports.

The current state of geopolitics is another reason why helping this audience understand the complexity of the dairy supply chain is so important. U.S. agricultural products play a critical role in fighting hunger around the world, while supporting jobs and local economies.

Amid constantly shifting trade dynamics, USDEC is working to ensure the industry is well-positioned for what comes next. The conversations that began at TPM23 are the start of a much longer effort to build trust and greater cooperation throughout the supply chain. 

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The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.