The International Dairy Foods Association (IDFA), the Port of Los Angeles and CMA CGM — a leader in shipping and logistics — formed the Dairy Exports Working Group aimed at identifying and addressing supply chain issues hampering U.S. dairy product exports. The group will focus on seaports on the West Coast of the United States, where a majority of dairy products begin their export journey, as well as on opportunities to streamline the movement of products from the interior of the United States to the West Coast, Washington, D.C.-based IDFA said.
Gene Seroka, executive director of the Port of Los Angeles, and Michael Dykes, D.V.M., president and CEO of IDFA, first made the announcement at Dairy Forum 2022 in Palm Desert, Calif., on Jan. 24.
The Dairy Exports Working Group will examine several ocean shipping and rail challenges and solutions, including:
- Exploring ways to aggregate and streamline U.S. dairy exports from multiple suppliers to ensure more consolidated and attractive bookings.
- Working to increase rail availability in the interior of the United States to reach non-coastal exporters.
- Determining the viability of implementing a “fast lane” concept for vessels agreeing to depart full or with fewer empty cargo containers.
- Defining agreed terms for exporters using empty containers currently languishing at U.S. ports.
- Establishing guarantees to fix and surpass ghost bookings.
“U.S. dairy exports reached a near-record $6.4 billion in 2020 and continued to set a blazing pace in 2021 due to surging global demand, but the U.S. dairy industry could be exporting much more to destinations around the world if there was more reliability and predictability in the supply chain,” said Dykes. “Our IDFA members are pleased to collaborate with the Port of Los Angeles and the CMA CGM Group in this Dairy Exports Working Group on potential market-based solutions to clearing bottlenecks at our West Coast ports and land and rail systems. This type of collaboration is essential to avoid significant future disruptions to the U.S. dairy supply chain that will result if exports continue to languish.”
Greater predictability and reliability in the U.S. dairy supply chain, which has been severely strained for months, is essential to the current and future success of the U.S. dairy industry, IDFA said. The current situation is costing U.S. dairy companies millions of dollars and damaging the credibility and reputation of U.S. dairy exporters among global customers. For example, dairy exporters are having to airfreight product more than ever before, sometimes at 20 times the cost, to meet overseas contracts.
At the same time, U.S. warehouses are full or facing near capacity levels due to delays. IDFA said it and its members are committed to working constructively with their partners at the Port of Los Angeles and CMA CGM, as well as other interested ports, carriers and supply chain stakeholders, to develop market-driven, win-win solutions that will create new business, help alleviate the empty container problem and expedite the flow of American dairy exports to our customers.
“American dairy exporters have been hard hit by supply chain challenges and trade policy that have made it difficult to get their goods to global markets,” Seroka said. “I’m pleased to collaborate with our dairy industry partners and the CMA CGM Group to launch this working group and find solutions that will benefit not only the dairy industry but all American exporters. We look forward to others joining this important initiative.”
Ed Aldridge, president of CMA CGM and APL North America, said his organization is committed to “taking bold actions” that help ensure dairy goods get to market in a timely manner.
“With the Dairy Exports Working Group, we waive all the right players in the room,” he said. “This collaborative partnership will enable us to quickly implement innovative solutions designed to not only help the dairy industry with current supply chain challenges, but also to pave the way for the future.”
The announcement came after weeks of talks among IDFA, member company leadership and selected ports and carriers in an attempt to develop market-led solutions to the supply chain challenges facing U.S. dairy exports. IDFA said it has also been advocating heavily with USDA, the White House, the U.S. Department of Transportation and other agencies to raise awareness and ensure the viability of America’s dairy industry. IDFA is committed to seeking innovative and collaborative solutions to supply chain difficulties hampering U.S. dairy exports, as determined by the IDFA Supply Chain Task Force led by IDFA Vice President of Trade Policy and International Affairs Becky Rasdall and Director of Legislative Affairs Donald Grady.
“I am hopeful that the formation of the Dairy Exports Working Group begins a new period of collaboration among dairy processors, ports and shipping companies to find market-based solutions for the supply chain challenges impacting U.S. dairy exporters,” said David Ahlem, president of Hilmar Cheese Co. and chair of the IDFA Executive Council.
For more information about the Dairy Exports Working Group, contact email@example.com.