Despite supply chain challenges, dairy companies, Port of Los Angeles, and CMA CGM make progress to prioritize U.S. dairy exports
The International Dairy Foods Association (IDFA), the Port of Los Angeles, and CMA CGM – a world leader in shipping and logistics – say the groups are working together to prioritize exports of U.S. dairy products and report significant progress moving cargo to Southeast Asia, South America, and other export destinations. In January, the groups formed the Dairy Exports Working Group to identify and address supply chain issues hampering U.S. dairy product exports. Ongoing discussions, planning, and problem-solving among the organizations have yielded breakthroughs that could lead to long-term solutions for U.S. dairy exports, including moving cargo from the interior of the United States to the West Coast.
Leaders of the Dairy Exports Working Group include Michael Dykes, D.V.M., President and CEO of IDFA; Gene Seroka, Executive Director of the Port of Los Angeles; and Ed Aldridge, President of CMA CGM and APL North America.
The Dairy Exports Working Group reports the following progress to date:
- CMA CGM’s acquisition of Fenix Marine Services (FMS) in the Port of Los Angeles has already led to increased control of cargo, earliest return dates, booking dates, and other benefits.
- Additional space and equipment allocated to an IDFA member for 120 containers per week with the capability to increase to 300 containers per week via CMA CGM vessels through the Port of Los Angeles—an increase of 150%.
- Prioritizing U.S. dairy exports for shipment to destinations in East and Southeast Asia, especially China, Vietnam, Thailand, and South Korea.
- Working to coordinate dedicated rail service to the West Coast carrying up to 220 containers of U.S. dairy products for export and expanded opportunities for U.S. dairy exporters to utilize rail service through CMA CGM’s rail partnerships.
- CMA CGM has diverted some ships from Los Angeles to other West Coast ports to collect U.S. dairy products for export.
- Improved communication and transparency between CMA CGM and dairy exporters without disrupting existing relationships with other ocean carriers (i.e., freight forwarders).
“I want to thank CMA CGM and the Port of Los Angeles for their transparency and commitment to produce real results and achieve progress for U.S. dairy exporters,” said Dykes of IDFA. “Last week, we learned that U.S. dairy exports reached a record $7.66 billion in 2021 despite serious supply chain issues, demonstrating surging demand for U.S. dairy from customers around the world. If the United States is to become the world’s leading supplier of nutritious, affordable, sustainable dairy products, we need partners like CMA CGM and Port of Los Angeles willing to roll up their sleeves and move our cargo. IDFA members are pleased with the early results of the Dairy Exports Working Group and we commit to working even harder with new partners throughout the supply chain to find market-based solutions for U.S. dairy exports. Let’s replicate this blueprint with other shippers and ports to enhance American competitiveness.”
“I’m extremely pleased with the results and the collaboration we’ve achieved in just one month,” said Seroka of the Port of Los Angeles. “Thanks to CMA CGM and the IDFA, we’ve moved the needle on several important fronts. While there’s much more work to do, I’m proud of this effort to get American exporters back into the international game.”
Aldridge of CMA CGM and APL North America, said, “At CMA CGM, we believe teamwork, communication and collaboration yield results. The Dairy Exports Working Group is a perfect example of the great things that can be accomplished quickly when different parts of the supply chain get together and brainstorm on possibilities. In the end, you end up with solutions that work for everyone.”
“We are grateful for CMA’s enthusiasm to extend the successful dairy exports pilot implemented in the Port of Los Angeles to ports in Portland and Seattle-Tacoma to bring much needed relief to Northwest dairy and its rural economy,” said Stan Ryan, President and CEO of Darigold, Inc.
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 hundreds-of-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 is working to expand the Dairy Exports Working Group to additional dairy companies, 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.
IDFA has also been advocating 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. As part of the Supply Chain Optimization and Resilience Coalition, IDFA is also supportive of leveraging digital tools to enhance supply chain transparency for dairy and the success of the Dairy Exports Working Group, including deployment of a national freight data portal. IDFA is committed to seeking other 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.