Trump is drafting an executive order that would rely on funding from a U.S. Trade Representative proposal to levy fines of up to $1.5 million on China-made ships or vessels from fleets that include ships made in China.

Those potential port fees have limited the availability of ships needed to move agriculture, energy, mining, construction and manufactured goods to international buyers, according to major U.S. exporters and transportation providers in interviews with Reuters, letters to U.S. officials, and comments ahead of USTR hearings next week.

High-profile containership operators and their retail and manufacturing customers have been vocal about the potential harm from the fees. Experts warn that the bulk and tanker ships that move basic goods like food and fuel could be more exposed because they cannot spread the cost among dozens of customers like container carriers can.

Ability to ship agricultural goods

U.S. farmers, who are already getting pummeled by retaliatory tariffs from China, Mexico and Canada, are caught in the crossfire of the Chinese ship fee fight, the American Farm Bureau Federation said.

The inability to secure ocean freight transportation from May and beyond has restricted their ability to sell bulk U.S. agricultural products like corn, soybeans and wheat because exporters are unsure what the final cost would be, three U.S. grain export traders told Reuters.

The United States exported more than $64 billion (C$91.7 billion) in bulk crops, bulk animal feed and vegetable oils in 2024, according to U.S. Census Bureau Trade data. The North American Export Grain Association, which represents crop commodities exporters, will participate in next week’s hearing.

Bulk agricultural exporters could face an additional $372 million to $930 million (C$533 million to C$1.33 billion) in annual transportation costs from the fees, the Farm Bureau said. That would represent substantial margin loss in global markets where competitiveness is often determined by mere pennies per bushel.

U.S. agricultural exporters get an edge over global rivals by leveraging a cost-effective and efficient domestic transportation system for moving products to market, said Alexa Combelic, the American Soybean Association’s executive director of government affairs.

“When you add costs to that efficient system, it’s no longer efficient. We no longer have the competitive edge,” Combelic said.

Coal industry threatened

Vessel owners have already refused to provide offers for future U.S. coal shipments due to the proposed USTR fees, Xcoal Energy & Resources CEO Ernie Thrasher said in a letter to U.S. Department of Commerce Secretary Howard Lutnick dated March 12 and seen by Reuters.

Enacting and implementing the proposed port fees could cease exports of U.S. coal within 60 days, putting $130 billion worth of shipments at risk, Thrasher said. He said the fee structure could add up to 35 per cent to the delivered cost of U.S. coal, making it uncompetitive on the global market.

Coal mines in West Virginia are also preparing to lay off miners as unsold coal inventories pile up, Chris Hamilton, CEO of the West Virginia Coal Association, told Reuters.

The proposed fees could also make it harder for the U.S. to export other energy products like oil, liquefied natural gas, and refined fuels, the American Petroleum Institute, the powerful oil industry lobbying group, said in comments submitted to the USTR dated Mar. 10.

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That is the backdrop for this week’s S&P Global TPM container shipping and supply chain conference in Long Beach, California, an annual event that marks the start of container shipping contract negotiating season.

Attendees this year include industry heavyweights like container carriers MSC, Maersk and Hapag-Lloyd, marquee customers including Walmart, and major logistics firms including DSV and DHL.

Why it matters: Canadian agricultural goods are shipped all around the world, and Canada is at a freight disadvantage in many markets compared to some competitors

These companies will be grappling with the ripple effects of increased protectionism, which could reduce international trade while weakening the negotiating position of massive container ship owners that have drawn robust profits and for years held the upper hand in pricing.

Trump has already slapped an additional 10 per cent tariff on goods from China, the world’s largest exporter, and has proposed million-dollar port entry fees for Chinese-built ships.

As early as Tuesday, the U.S. could impose 25 per cent tariffs on familiar goods like avocados and tequila from Mexico, and beef, lumber and oil from Canada.

Trump has threatened to levy an additional 10 per cent tariff on Chinese goods. His administration also plans new or higher tariffs on steel and aluminum and has floated 25 per cent duties on products from the European Union.

“Unprecedented uncertainty is all around,” said Peter Sand, chief analyst at transportation pricing platform Xeneta.

The world’s biggest importer’s shift away from free trade hits as global supply chains are managing higher costs from global warming-fueled severe weather and routing ships away from the Suez Canal to avoid attacks by Iran-backed Houthi militants in support of Palestinians in Gaza.

U.S. container imports of everything from plastic toys to machine parts have surged, in part due to early purchases to avoid tariffs. But trade experts warn that a pullback is likely once new import taxes kick in, targeted nations retaliate, and inflation-weary shoppers absorb the brunt of tariff-related cost increases – something that could pressure shipping demand and prices.

The Drewry World Container Index’s spot rate for a 40-foot container was (US) $2,629 as of Thursday, 75 per cent below the pandemic peak of $10,377 in September 2021 and lowest since May 2024.

“The geopolitical landscape has of course become more complex which could lead to wild swings for freight rates in either direction, but our base case is for a moderation throughout 2025,” Jefferies analysts said in a recent note.

In another move that has set off alarms around the globe, the U.S. Trade Representative on Feb. 21 proposed hefty fees on Chinese-built vessels entering U.S. ports under a union-supported plan to spur U.S. shipbuilding.

Under the proposal, a vessel owned by Chinese maritime transport operators including state-owned COSCO would pay a port entrance fee of up to $1 million per vessel. The fee for other operators using Chinese-built ships could top out at $1.5 million.

The change could benefit Taiwanese and South Korean liner operators. Still, experts warn it will have a major impact on container carriers and could translate into steeper consumer prices for goods from toys and clothing to food and fuel.

“The economic burden on U.S. exporters and importers will be huge,” container shipping expert Lars Jensen said on LinkedIn.

“The actions taken by the U.S. administration over the past four weeks are unprecedented in scope and scale.”

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The success of the International Longshoremen’s Association in winning Trump’s support for its anti-automation battle could be instructive for unions facing contract renewals during his term, including the United Auto Workers, UPS Teamsters and the U.S. West Coast’s International Longshore & Warehouse Union.

The deal, announced on Wednesday night, must be ratified by some 45,000 members of ILA and the United States Maritime Alliance (USMX) employer group.

“This is a six-year détente in the tech-versus-labor tug-of-war at U.S. ports,” said Judah Levine, head of research at Freightos CRGO.O, a freight-booking and payments platform.

It landed days before an extended Jan. 15 deadline, averting a second strike that could have put a huge dent in the economy at the start of Trump’s second term on Jan. 20.

Father-and-son ILA leaders Harold and Dennis Daggett late on Wednesday called Trump a hero to the union and gave him “full credit” for the resolution of talks.

They pointed to a Truth Social post in mid-December, where Trump appeared to side with the union’s struggle against “foreign” employers after meeting with those ILA leaders.

“I’ve studied automation and know just about everything there is to know about it. The amount of money saved is nowhere near the distress, hurt and harm it causes for American Workers, in this case, our Longshoremen,” Trump wrote.

The employer group, which includes Maersk’s APM Terminals and the U.S. arms of major container carriers such as China’s COSCO Shipping, said the agreement came “thanks in large part to President Trump’s leadership.”

The ILA and USMX extended their bargaining deadline after a deadlock over automation sparked a three-day strike in October at major ports including New York and New Jersey, Houston and Savannah, Georgia.

President Joe Biden played a vital role in helping workers win a 62 per cent raise over six years, which ended the October strike.

Biden praised both the union and employers for reaching a tentative deal on Wednesday. Trump has not commented on Truth Social and his transition team did not immediately comment.

One pro-labor attorney cautioned against interpreting Trump’s post on automation as union support, saying that it was in keeping with his pugilistic approach to international policies.

“It supports his narrative of going after foreigners,” said Cathy Creighton, an attorney and director of Cornell University’s School of Industrial and Labor Relations in Buffalo.

— Reporting by Lisa Baertlein in Los Angeles and Daniel Wiessner in Albany, New York

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U.S. and British warplanes, ships and submarines launched dozens of strikes across Yemen overnight, retaliating against Iran-backed Houthi forces for attacks on Red Sea shipping, widening regional conflict stemming from Israel’s war in Gaza.

Most container ships already were avoiding the nearby Suez Canal, a shortcut between Asia and Europe that handles 12 per cent of global trade. Now, U.S. and UK militaries have advised all ships to steer clear of the conflict zone. That stoked fears that rates for oil tankers and bulk carriers that ferry vital commodities could surge, raising the risk of a new round of global inflation.

The benchmark Shanghai Containerized Freight Index was up over 16 per cent week-on-week to 2,206 points on Friday. The index, which measures non-contract “spot” rates for container shipments out of China’s ports, has gained 114 per cent since mid-December.

Rates on the Shanghai-Europe route rose 8.1 per cent to $3,103 per 20-foot container on Friday from a week earlier, while the rate for containers to the unaffected U.S. West Coast soared 43.2 per cent to $3,974 per 40-foot containers week on week, leading ship broker Clarksons said on Friday.

“The longer this crisis goes on, the more disruption it will cause to ocean freight shipping across the globe and costs will continue to rise,” Peter Sand, chief analyst at freight platform Xeneta, said in Friday.

Major players in the ocean shipping industry that handles upwards of 90 per cent of global trade are bracing for months of cost-stoking upheaval.

“Even if from today forward the Bab al-Mandeb Strait was to become safe and secure for transit, we expect it will take a minimum two months before vessels could assume normal rotational patterns,” said Michael Aldwell, executive vice president for sea logistics at Kuehne + Nagel KNIN.S.

Major container ship owners such as MaerskMAERSKb.CO and Hapag-LloydHLAG.DE have switched Suez Canal-bound ships to the longer route around Africa’s Cape of Good Hope. That has sent delays cascading through complex vessel schedules. Rates have at least doubled from a month ago on the most affected routes but remain below the pandemic’s record highs.

On Friday, four oil tankers turned around mid-voyage to avoid the Red Sea and five others either made diversions or paused navigation.

“Tanker rates will increase and futures are up this morning,” said John Kartsonas, managing partner at Breakwave Advisors, who added that dry bulk remains the least affected sector.

Major importers like Tesla, Geely-owned Volvo Car VOLCARb.ST and Ikea already have reported product shortages or warned of late-arriving goods.

Rerouting a ship around Africa adds roughly 10 days and $1 million in fuel costs for each one-way voyage between Asia and Europe.

Carriers are pulling vessels into the most affected European and Mediterranean trade lanes to compensate. That is reducing available vessel space for cargo moving on Transpacific and North-South routes and sending rates higher, Jefferies analyst Omar Nokta said in a note on Friday.

Vessel operators also are rolling out Red Sea-related surcharges and rationing less expensive, contract-rate space – forcing some customers’ shipments into the pricier spot market.

“The price of a vast range of goods threatens to march upwards again,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

–Additional reporting for Reuters by Siddharth Cavale.

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Train and engine service members of the transportation division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) narrowly voted to reject the deal. That unit, which includes conductors, brakemen and other workers, joins three other unions in rejecting a deal brokered via a board appointed by U.S. President Joe Biden.

“There’s a lot of anger about paid sick leave among the membership” who kept goods flowing during the early days of the COVID-19 pandemic, said Seth Harris, a professor at Northeastern University.

Labour unions have criticized the railroads’ sick leave and attendance policies and the lack of paid sick days for short-term illness. There are no paid sick days under the tentative deal. Unions asked for 15 paid sick days and the railroads settled on one personal day.

Railroads have slashed labour and other costs to bolster profits and are fiercely opposed to adding paid sick time that would require them to hire more staff. Those operators — which include Union Pacific, BNSF and CSX as well as the U.S. business of Canadian National Railway (CN) — say the contract deal has the most generous wage package in almost 50 years of national rail negotiations.

“The union needs to get this done in advance of the new Congress,” said Reliant Labor Consultants principal Joe Brock, a former Teamsters local president.

Republicans, who historically favour corporations over unions, earlier this month won control of the U.S. House starting in January.

“I see a minimal improvement in sick pay, and huge pressure from the (Biden) administration to accept a deal,” Brock said.

But railroads are also under pressure to wrap up talks. Major U.S. industry groups complain that rail industry cost cuts have hurt service. On Monday, several renewed calls for Biden and Congress to swiftly intervene to prevent a strike or employer lockout ahead of the holiday season.

White House spokesperson Karine Jean-Pierre said a shutdown would hurt American families, farms and businesses. She said Biden is being briefed on the issue and that Labour Secretary Marty Walsh is “very much engaged.”

“We continue to urge both sides to finish their work in good faith and avoid even the threat of a shutdown,” she told reporters. “But like we do for all issues, our team is preparing and planning for all possible outcomes.”

‘Without a strike’

A rail traffic stoppage could freeze almost 30 per cent of U.S. cargo shipments by weight, stoke inflation and cost the U.S. economy as much as US$2 billion per day by unleashing a cascade of transport woes affecting the energy, agriculture, manufacturing, healthcare and retail sectors.

Last week, the U.S. Chamber of Commerce said Congress should step in to prevent any disruption, warning it would be catastrophic for the economy. Automaker General Motors has said a halt would force it to stop production of some trucks within about a day.

“This can all be settled through negotiations and without a strike,” SMART-TD President Jeremy Ferguson said in a statement.

The National Carriers’ Conference Committee (NCCC), which represents the nation’s freight railroads in talks, said the “continued, near-term threat” of a strike “will require that freight railroads and passenger carriers soon begin to take responsible steps to safely secure the network in advance of any deadline.”

The railroads showed no sign of being willing to reopen talks and said, “Congress may need to intervene, just as it has in the past, to prevent disruption of the national rail system.”

The standoff between U.S. railroad operators and their union workers in September disrupted flows of hazardous materials such as chemicals used in fertilizer and disrupted U.S. passenger railroad Amtrak service as railroads prepared for a possible work stoppage.

Unions, including a separately contracted unit covering more than 1,000 SMART-TD yardmasters, have ratified nine of 13 agreements covering about half of the 115,000 workers affected by the talks.

The deal includes a 24 per cent compounded wage increase over a five-year period from 2020 through 2024 and five annual US$1,000 lump sum payments.

Beginning on Dec. 9, SMART-TD would be allowed to go on strike or the rail carriers would be permitted to lock out workers, unless Congress intervenes. Three other unions that rejected the deal have already agreed to extend a strike deadline until early December.

If there is a strike by any of the unions that voted against the deal, Brotherhood of Locomotive Engineers and Trainmen and other rail unions that ratified agreements have pledged to honour picket lines.

The Biden administration helped avert a service cutoff by hosting last-minute contract talks in September that led to a tentative contract deal.

— Reporting for Reuters by David Shepardson in Washington and Lisa Baertlein in Los Angeles; additional reporting by Jeff Mason and Trevor Hunnicutt.

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The potential shutdown, which could come as early as Friday, could freeze almost 30 per cent of U.S. cargo shipments, stoke inflation, impede supplies of food and fuel, cost the U.S. economy about US$2 billion per day and cause transportation woes.

Railroads including Union Pacific, Berkshire Hathaway’s BNSF, CSX and Norfolk Southern have until a minute after midnight on Friday to reach tentative deals with three hold-out unions representing about 60,000 workers.

If agreements are not reached, there could be union strikes or employer lockouts. But the railroads and unions also could agree to stay at the bargaining table or the Democratic-led U.S. Congress could intervene by extending talks or establishing settlement terms.

The Biden administration’s push comes as food, energy, automotive and retail groups implore Congress to intervene, saying a rail shutdown could threaten everything from global grain supplies to shipments of goods related to Christmas holiday shopping.

White House press secretary Karine Jean-Pierre said the administration is asking truckers and air shippers to assist should rail service cease and also is considering invoking emergency authorities. Jean-Pierre added that the administration is hosting daily interagency meetings to assess which supply chains and commodities are at highest risk.

The White House has told railroads and unions that “a shutdown is unacceptable and will hurt American workers, families and businesses, and they must take action to avert it,” a White House official told Reuters, speaking on condition of anonymity.

One key issue is ensuring “continued distribution of vital hazardous materials that depend on rail transport, such as chlorine for water treatment plants,” this official added. Railroads on Monday stopped accepting shipments for hazardous materials such as chlorine and chemicals used in fertilizer so they are not stranded in unsafe locations if rail traffic stops.

The U.S. energy sector relies on railroads to move coal, crude oil, ethanol and other products.

Some railroads plan to impose additional restrictions that could impact food suppliers and online retailers that use intermodal services that connect ships, trains and trucks. BNSF, which serves the western U.S., said it will stop accepting refrigerated intermodal cargo. Norfolk Southern, which serves the eastern U.S., said it will stop accepting all intermodal shipments.

U.S. passenger railroad Amtrak, which uses tracks maintained by freight railways, is facing growing disruptions. Amtrak said it will cancel trains on seven more long-distance routes on Wednesday after it began canceling trains on four long-distance routes on Tuesday.

High stakes

The stakes are high for Biden, who has vowed to rein in soaring consumer costs ahead of November elections that will determine whether his fellow Democrats maintain control of Congress.

Biden appointed an emergency board in July to create a framework for settlement terms.

That has not happened since the early 1990s, when Congress sent the parties into final and binding arbitration.

Unions in the current talks have been offered significant pay increases. Three of 12 unions, representing about half of the 115,000 workers affected by the negotiations, have yet to sign deals. They are grappling with railroads over working conditions that they have said worsened after the industry slashed its workforce by almost 30% during the past six years.

Rail customers have said a shutdown will send them scrambling for alternative transportation and storage for everything from ammonia and fuel to cars and chicken feed.

It takes about four trucks to handle cargo in a single rail car. The United States does not have the estimated 467,000 trucks or the necessary labour to support such a shift. Beyond that, some cargo is too heavy or large to travel over the road.

A rail work stoppage could strike as U.S. farmers harvest corn, wheat and soybeans for export around the world, according to the National Grain and Feed Association.

“The economic damages across the food and agricultural supply chain would be swift and severe,” the group said.

Justin Louchheim, senior director of government affairs at the Fertilizer Institute, which represents companies that rely on ammonia supplies, added: “When you contemplate global food security, I’d say it’s a crisis right now.”

Automakers worry that a disruption could empty dealer showrooms by stranding cars in the wrong places. Toyota said it would have to store vehicles and “many locations would run out of storage within two to four days of production.”

— Reporting for Reuters by David Shepardson and Lisa Baertlein; additional reporting by Ben Klayman, Joe White, Laura Sanicola, Stephanie Kelly, Arathy Somasekhar and Tom Polansek.

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Now it bears a different treasure: Paw Patrol Movie Towers, Batmobile Transformers and Baby Alive Lulu Achoo dolls.

The dry bulk cargo ship has been drafted into the service of retail giant Walmart, which is chartering its own vessels in an effort to beat the global supply chain disruptions that threaten to torpedo the retail industry’s make-or-break holiday season.

“Chartering vessels is just one example of investments we’ve made to move products as quickly as possible,” said Joe Metzger, U.S. executive vice president of supply-chain operations at Walmart, which has hired a number of vessels this year.

The aim is to bypass log-jammed ports and secure scarce ship space at a time when COVID-19, as well as U.S.-China trade ructions, equipment shortages and extreme weather, have exposed the fragility of the globe-spanning supply lines we use for everything from food and fashion to drinks and diapers.

More than 60 container ships carrying clothing, furniture and electronics worth billions of dollars are stuck outside Los Angeles and Long Beach terminals, waiting to unload, according to the Marine Exchange of Southern California.

Pre-pandemic, it was unusual for more than one ship to be in the waiting lane at the No. 1 U.S. port complex, which handles more than half of all U.S. imports.

Other big retail players, such as Target, Home Depot, Costco and Dollar Tree, have said they are chartering ships to deal with the pandemic-driven slowdown of sea networks that handle 90 per cent of the world’s trade.

Or, as Steve Ferreira of shipping consultancy Ocean Audit describes the escalating concern: “Containergeddon.”

U.S. retailers’ traditional lifeline from Asia is freezing up due to a resurgence of COVID-19 in countries like Vietnam and Indonesia plus a power-supply crunch in China. The supply snarls coincide with booming demand as consumers spend more on goods than going out, and the festive shopping frenzy nears.

Burt Flickinger, managing director at retail consultancy Strategic Resource Group, said at least 20-25 per cent of the goods stuck on ships were unlikely to make it onto shelves in time for the Nov. 26 Black Friday kickoff for the holiday shopping season, a period when retailers make more than a third of their profits.

Route for great profit

The biggest chains are taking matters into their own hands.

In a typical year, Walmart would have moved those toys from China to Los Angeles in hundreds of 12-metre cargo boxes stacked like colorful Lego bricks on gigantic container vessels that serve multiple customers.

But 2021 is far from typical. Incoming cargo at the Port of Los Angeles is up 30 per cent from last year’s record levels. Trucks and trains can’t remove it fast enough, leading to logjams, said the port’s executive director Gene Seroka, reflecting the surge in consumer demand.

“It’s like taking 10 lanes of freeway traffic and squeezing them into five,” Seroka said.

Chartered ships that offer valuable cargo space and can sidestep the container terminals play a critical role in this second pandemic holiday season, particularly for time-sensitive goods like Christmas sweaters that won’t sell if they arrive too late.

The Flying Buttress, for example, entered Los Angeles waters on Aug. 21. It got stuck in a queue outside the port before it bypassed clogged terminals and unloaded its goods at a separately operated bulk cargo dock nearby on Aug. 31, according to Refinitiv data and shipping records.

During that voyage, Walmart circumvented the shortage of 12-metre containers typically used for global shipping by switching to bigger 16-metre containers that are almost exclusively used to move goods by truck and train within the United States.

Other companies are also playing the shipping game including Home Depot, which said it was “creatively working to obtain additional capacity.”

The home improvement retailer dodged the Los Angeles gridlock by sending its Great Profit charter ship nearly 200 km south to the Port of San Diego.

On Sept. 15, the ship’s onboard cranes hoisted seven-foot Halloween “Spellcasting witches,” Christmas lights and other holiday decor onto docks there, said Ocean Audit CEO Ferreira, who helps shipping customers claw back overpayments.

“This is the home stretch. They’re doing whatever it takes” to win in an overheated market, he said of retailers.

Why port size matters

Yet there is a limit to such workarounds.

Great Profit moored at a terminal that handles everything from sugar to windmill blades but can only accommodate a maximum of 500 containers from one to two ships per month between now and the end of the year, said Greg Borossay, the port’s maritime business development principal.

That’s because San Diego, like many other U.S. seaports, doesn’t have the towering gantry cranes needed to pluck boxes from massive ships. Rail service is equipped for autos and other specialty cargo. And, roads in surrounding commercial and residential areas aren’t set up for the fleets of trucks needed to whisk thousands of containers to other parts of the country.

“We’d have a very unhappy community if we had 3,000 (boxes) coming off a ship,” Borossay added.

Not all retailers will hire ships to support sales, and other factors could be significant in picking out potential winners and losers.

Clothing and accessory retailers have seen their inventories decline even as sales have accelerated, stoking worries about sell-outs, said Jason Miller, associate professor of logistics at Michigan State University’s business college.

General merchandise retailers like Walmart and Target, on the other hand have done a better job of keeping inventory on pace with sales, he added.

Paying $20,000 per container

The global supply crunch is providing lucrative opportunities for bulk cargo ship operators, though; they are cashing in on a record spike in container shipping rates that has sent freight costs above US$20,000 per box on the biggest liner vessels.

Global container shipping players like AP Moller Maersk and Hapag Lloyd, are flush with cash from the soaring rates. Major lines are “putting in every ship we can find,” Hapag Lloyd CEO Rolf Habben Jansen said.

Several shipping sources said other firms were snapping up second-hand container vessels of all sizes.

Hong Kong-based Taylor Maritime, which according to shipping databases manages the Flying Buttress, did not respond to a request for comment.

Dry bulk transporters have a short window of time to prepare decks to safely secure and carry cargo boxes. They typically transport commodities in below-deck cargo holds.

Genco Shipping and Trading is seeking approval from its ship safety certifier to prepare some of its own dry bulk vessels to carry containers.

Genco isn’t going all-in on container shipping, said CEO John Wobensmith, who called the project “opportunistic.”

Separately, agribusiness giant Cargill said it is looking into using some of the dry bulk ships it charters to instead hold containers, if only as a temporary solution, to “alleviate bottlenecks.”

— Reporting for Reuters by Lisa Baertlein in Los Angeles, Jonathan Saul in London and Siddharth Cavale in Bangalore; additional reporting by PJ Huffstutter in Chicago.

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Catastrophic flooding from Hurricane Florence, which has dumped up to 36 inches of rain on North Carolina since Thursday, has interrupted supply lines around the state and into neighboring South Carolina. Meteorologists warn that the worst is yet to come as rivers rise to historic levels.

North Carolina is a top U.S. producer of poultry, hogs and tobacco. Agriculture contributes $87 billion to the state’s economy, making it the No. 1 industry, according to the state government (all figures US$).

Perdue Farms shut poultry processing plants in Rockingham, N.C. and Dillon, S.C. last week and kept them offline on Monday because of road closures and power outages, company spokesman Joe Forsthoffer said.

“It just wasn’t safe to ask people to come in,” said Forsthoffer, who added that the privately held chicken producer will monitor road conditions to determine when it can resume slaughtering.

Two North Carolina hog waste pits suffered structural damage, four were inundated with water and seven had discharges, according to the North Carolina Department of Environmental Quality.

More than 3,000 lagoons in the state were unaffected, the North Carolina Pork Council said.

When the manure pits overflow, they risk contaminating water supplies with bacteria such as salmonella and E. coli.

The North Carolina Department of Transportation on Monday warned against travel in the southern, central and eastern parts of the state — noting that several sections of I-95 and I-40, which are major transportation arteries, are flooded.

There were also traffic disruptions on U.S. Highway 1 near Perdue’s Rockingham plant, according to NCDOT maps.

The South Carolina Department of Transportation said sections of I-95 were closed near the North Carolina line, near Perdue’s Dillon plant.

No. 3 U.S. railroad operator CSX Corp, which services the area, advised customers that shipments traveling through the I-95 corridor will experience delays. CSX said it is still assessing damage from the storm.

“When it comes to moving product, there’s obviously challenges with major routes like I-95, I-75 and I-40 being closed and having to detour around that,” Perdue’s Forsthoffer said.

On Sunday, Perdue pulled off the road trucks delivering poultry feed to its farms because it was not safe to travel, he said. It resumed some deliveries on Monday but not all.

The company stocked up on feed at farms ahead of the storm in preparation for such transportation problems, Forsthoffer said. It kept its facilities shut because flooding made it unsafe for employees to try to go to work, he said, adding that a small number of poultry died on the company’s farms.

Smithfield Foods runs the world’s biggest hog plant in Tar Heel, N.C., near a junction where I-95 traffic is disrupted. Smithfield closed the plant on Thursday and Friday. It did not respond to requests for comment on Monday.

A Smithfield employee said the plant remained closed on Monday.

Cargill closed an animal-feed facility at Roanoke, Virginia, and another facility in Fayetteville, N.C. that handles salt, oils and grains, because they are in active flood zones, spokeswoman April Nelson said on Monday. A third facility in Charlotte, N.C. was also closed and set to reopen on Tuesday, she said.

Flooded roads have prevented some North Carolina farmers from accessing their crop fields and livestock barns to assess damage or livestock losses from the hurricane, said Andrea Ashby, spokeswoman for the North Carolina Department of Agriculture and Consumer Services.

“A lot of areas, they’re inaccessible,” she said. “People haven’t been able to get in and assess what the situation is.

“It’s critical to be able to get to the farms,” she said. “The flooding and the road closures are real challenges for the industry.”

On Tuesday, North Carolina Agriculture Commissioner Steve Troxler will attempt to survey farms from a helicopter, Ashby said.

— Reporting for Reuters by Tom Polansek and Lisa Baertlain; additional reporting by PJ Hufstutter in Chicago.

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Under a plan several years in the making, the fast-food company — along with its franchisees and suppliers — aims to cut its greenhouse gas emissions by roughly one third, preventing 150 million tonnes of them from being released into the atmosphere by 2030.

“To meet this goal, we will source our food responsibly, promote renewable energy and use it efficiently, and reduce waste and increase recycling,” McDonald’s CEO Steve Easterbrook said.

The commitment comes as U.S. President Donald Trump works to weaken Obama-era efforts to combat climate change. Trump decided last year to pull the U.S. out of the Paris climate pact.

Meat processor Tyson Foods, one of McDonald’s suppliers, is among the hundreds of companies that already have committed to fight climate change by cutting greenhouse gas emissions.

McDonald’s said it would put the greatest emphasis on the largest contributors to its carbon footprint: beef production, restaurant energy usage and sourcing, packaging and waste. Those segments combined account for about 64 per cent of McDonald’s global emissions, the company said.

The company said its plan involves “elevating and supporting sustainable agriculture practices,” noting its release last year of its 2020 goals for beef sustainability, to “proactively identify, share and scale beef production’s most sustainable practices.”

McDonald’s said Tuesday it also plans to install energy-efficient lighting and kitchen equipment, support sustainable packaging and encourage recycling in its restaurants.

Between 2015 and 2030, McDonald’s and its partners intend to reduce greenhouse gas emissions related to its restaurants and offices by 36 per cent. The company also aims to reduce emissions intensity per tonne of food and packaging by 31 per cent during that time frame.

McDonald’s program was approved by the Science Based Targets initiative, a collaboration between the World Resources Institute, the World Wildlife Fund, CDP (formerly the Carbon Disclosure Project) and the United Nations Global Compact, which help companies address climate change.

“We are about halfway there already on (total) packaging and waste,” Francesca DeBiase, McDonald’s chief supply chain and sustainability officer.

McDonald’s Canada, in a separate statement Tuesday, said it will work with its franchisees and suppliers “to develop plans to address the largest segments of our carbon footprint.”

The Canadian arm said it would work with franchisees to continue setting up energy reduction measures such as LED lighting, low oil volume fryers and other “high efficiency” technologies.

It also noted its participation in the first-ever beef sustainability pilot in Canada, which ran from 2014 to 2016 and “verified key sustainability outcomes across all aspects of beef production, including well-managed grazing systems and the protection of waterways.”

The global chain said the reductions announced Tuesday are the equivalent of taking 32 million passenger cars off the road for an entire year or planting 3.8 billion trees and growing them for 10 years.

The company said its target “will enable McDonald’s to grow as a business without growing its emissions.”

CEO Easterbrook, who also has committed to reducing antibiotic use in chicken and cutting artificial ingredients, said the costs would not be disruptive.

“We’re not expecting any substantial shift in business financials either at the corporate or restaurant level,” Easterbrook said.

— Lisa Baertlein is a Reuters correspondent covering the U.S. restaurant and grocery sectors from Los Angeles. Includes files from AGCanada.com Network staff.

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The Ninth U.S. Circuit Court of Appeals overturned a January 2015 lower court ruling striking down the law, saying the judge erred in concluding that the ban conflicted with a federal law governing the production of poultry products.

Friday’s 3-0 decision by the Pasadena-based appeals court is a victory for animal rights advocates opposed to force-feeding.

The decision is also a defeat for chefs who say they enjoy preparing foie gras, while luxury-minded diners enjoy eating it.

“It’s like a parent taking away a toy,” said Phillip Frankland Lee, the owner of Scratch Bar and Kitchen in Encino, Calif. and a former contestant on reality TV show Top Chef. “It will be something that’s missed by the guests.”

Prized by gourmands for its rich flavours, foie gras is the liver of specially fattened ducks or geese, and often used to make pate.

California’s law prohibits the sale of birds that are force-fed to enlarge their livers. It was passed in 2004 and originally took effect in 2012.

The law had been challenged by a group of Canadian duck and geese producers, the Association des Eleveurs de Canards et d’Oies du Quebec; Hudson Valley Foie Gras in Ferndale, New York; and Hot’s Restaurant Group in Los Angeles.

“They made a mistake,” Hudson Valley manager Marcus Henley said in an interview. “This law has always been unconstitutional and incorrect in its basis. We won’t be stopping.”

The office of California Attorney General Xavier Becerra, which defended the law, did not immediately respond to requests for comment.

In January 2015, U.S. District Judge Stephen Wilson in Los Angeles agreed with opponents of the foie gras ban that the federal Poultry Products Inspection Act preempted it.

But in Friday’s decision, Circuit Judge Jacqueline Nguyen said California was simply trying to ban a feeding method it deemed cruel and inhumane.

She said this posed no conflict with the federal law, even if its enforcement resulted in an effective ban on foie gras.

“Nothing in the federal law or its implementing regulations limits a state’s ability to regulate the types of poultry that may be sold for human consumption,” Nguyen wrote.

Jared Goodman, a lawyer for People for the Ethical Treatment of Animals, said that group was “thrilled” by the decision.

“It prohibits selling diseased livers of birds force-fed by jamming tubes down their throat and pumping concentrated food down their esophagus,” Goodman said in an interview. “This is truly torture and unimaginable cruelty.”

— Reporting for Reuters by Jonathan Stempel and Richard Leong in New York and Lisa Baertlein in Los Angeles.

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