US Senator John Thune’s Weekly Column: Port Disruptions Causing Challenges for South Dakota Ag Producers and Retailers

Port Disruptions Causing Challenges for South Dakota Ag Producers and Retailers
By Senator John Thune

A reliable and efficient supply chain is critical to our nation’s global competitiveness. Our ports are a vital link in that chain, but unfortunately, some of the biggest challenges at our ports are self-imposed and are having major repercussions across the country, including South Dakota. The current delays and disruptions caused by labor disputes in the West Coast ports have directly harmed exports, product availability, and jobs in South Dakota. In particular, South Dakota’s farmers, ranchers, retailers, and households are bearing the costs of these labor slowdowns.

On February 10, 2015, the Senate Commerce Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security held a hearing about the challenges the ports slowdown are causing across the country. As chairman of the Commerce Committee and as a member of the Senate Agriculture Committee, I’ve been monitoring the ports disputes and have heard from a number of South Dakotans about how the disruptions in service continue to directly impact their businesses.

At the hearing, Cargill testified that lost sales and unnecessary port charges are costing our nation’s meat and poultry industry over $40 million per week and jeopardizing relationships with international customers. I have also heard from Tyson Fresh Meats, based in Dakota Dunes, which shared with me that its beef and pork is sitting in freezers near the ports instead of heading to Asian markets, while 30 to 40 large container ships are sitting off the coast waiting to export our nation’s premium products. Tyson Fresh Meats has 41,000 team members, and the U.S. Department of Agriculture reports that agricultural exports support over one million full-time U.S. jobs. These delays, which have been going on since last summer, are having a real impact on jobs and our economy.

The disruption is also hurting consumers and retailers, which often import a substantial portion of merchandise through the West Coast ports. Outdoor Gear Inc., a family-owned winter apparel wholesaler based in Sioux Falls, moves about 95 percent of its inventory through West Coast ports and has been forced to miss deadlines, pay late-delivery penalties, and pass up important sales opportunities, including in December during the peak holiday season. In fact, BNSF railroad testified at the hearing that they have been forced to cut weekly train service to ports in half from 60 trains per week to 30 trains. This dramatic reduction in service underscores the ripple effects that are being felt across the country.

While our nation’s businesses are dynamic and adaptable, this situation cannot go on indefinitely, and we cannot continue to expect our businesses and households to absorb the unnecessary costs of delays. Congestion and labor disputes in our ports are causing a large drain on our nation’s economy and will take months to unwind.

While this has been on-going since late last summer, I urge all sides in the dispute to come together and find a long-term solution as soon as possible. This also requires the president and the administration to get actively involved to resolve this impasse. As chairman of the Commerce Committee, I will continue to highlight the direct impact this slowdown is causing businesses in South Dakota and across the country and I am committed to working with all parties to get this vital link in our nation’s supply chain back on track.

###