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January 27, 2022
The International Dairy Foods Association (IDFA), the Port of Los Angeles, and CMA CGM — a world leader in shipping and logistics — are forming 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 opportunities to streamline the movement of products from the interior of the United States to the West Coast.
The announcement was made at Dairy Forum 2022 in Palm Desert, Calif., by Gene Seroka, executive director of the Port of Los Angeles, and Michael Dykes, D.V.M., president and chief executive officer of IDFA. Dairy Forum is an annual conference organized by IDFA that attracts the dairy industry’s top leaders and executives.
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 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; and
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 Michael 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.”
Port of Los Angeles Executive Director Gene Seroka commented, “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. 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, stated, “At CMA CGM, we are committed to supporting America’s farmers and taking bold actions to ensure they get their goods to market in a timely manner. With the Dairy Exports Working Group, we will have all the right players in the room. 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.”
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. 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 and its members are committed to working constructively with our partners at the Port of Los Angeles and CMA CGM, as well as other interested ports, carriers, and other 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.
“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 Company and chair of the IDFA Executive Council.
The announcement comes after weeks of talks between 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 has also been advocating heavily with the U.S. Department of Agriculture, 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.
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