The American Filet-O-Fish supply chain crosses Canada. It can change.



Thanks to a legal battle involving a a few million pounds of Alaskan pollock, McDonald’s Filet-O-Fish is an endangered and even endangered species.

The fish in question was just starting to roll out of cold storage in Canada on Wednesday as the United States and two shipping companies fight in federal court. At the heart of the matter is whether a brief jaunt across the Canadian border is enough to exempt companies from US shipping laws.

The ploy used by companies to exploit a loophole in the Jones Act is actually some sort of genius.

The US government claims that the companies in question – Kloosterboer International Forwarding and Alaska Reefer Management, both part of the American Seafoods group – “violated Jones Law, which requires goods shipped between US ports to be carried on US owned ships,” The Associated Press reported.

The fact that the companies used foreign flagged vessels is not in dispute. But the ploy that companies have used to exploit a loophole in Jones Law is actually some sort of genius. here’s how The Maritime Executive commercial publication breaks down the plot, which begins in Dutch Harbor, Alaska, and is almost a Bond villain in its level of complication:

These ships are loaded at Dutch Harbor and transit through the Panama Canal and around the east coast to the port of Bayside, Canada. At Bayside, the cargo is unloaded into truck trailers for delivery in the eastern United States.

If the trucks carrying this fish entered Maine directly, the entire arrangement would be prohibited by the Jones Act, which prohibits the use of foreign vessels to transport goods between points in the United States. However, the “Bayside route” benefits from an obscure clause in the Act – the “third condition” – which permits the use of foreign flag vessels if a “direct route on” a Canadian rail line is also involved in the delivery. .

To get through this little-known loophole, every truck of fish at the Bayside Terminal is driven to a ramp and onto the only train of the “Bayside Canadian Railway” – a 100-foot stretch of track with two cars and no destination. A small bypass motor pulls the train all the way to the bottom, then pushes it back up the ramp. The truck then descends by the same ramp, to route 127 and across the border from Maine to Calais, completing a 7,500 nm foreign flag expedition between two American points.

This is a change from 2012, when, according to the US Department of Justice, companies “legally used the New Brunswick Southern Railway to transport their seafood to Canada, a trip of over 30 miles along an established railroad that carried seafood from one point to another. In contrast, a video of the U.S. customs and border protection process highlights how ridiculous the current performance is.

Not seeing the elegance or comedy inherent in the ridiculous system the companies had developed, CBP slapped them and their associates with more than $ 350 million in penalty notices. The companies hesitated and took the government to court for “excessive fines,” leading to the deadlock that threatens the US fish stick supply chain.

It may all sound a bit strange and arbitrary, but American history is littered with examples of the government taking incidents involving the fish market and the Canadian border very seriously. After the War of Independence, one of Americans’ greatest victories in the peace talks was to retain the right to continue fishing off the coasts of Nova Scotia and Newfoundland, a key demand for New England’s elites. A tariff dispute between the United States and Canada on herring in 1894 almost turned into a real brawl that froze relations between countries for years. A Pacific Northwest salmon dispute in the 1990s, hundreds of canadian fishermen blocked an alaskan state ferry for three days, announcing a wave of “burnt flags, insults based on national stereotypes, and even a moderate version of the gunboat diplomacy ”. The New York Times reported at the time.

For now, the scales of justice have tipped in the side of shipping companies.

The Government of Canada has remained silent on this current dispute so far, despite its territory being used for such fishing matters. It’s probably for the best – the United States and Canada are still shaken by trade war that former President Donald Trump initiated. Today Washington and Ottawa are still search for agreement on issues such as tariffs on solar energy products and softwood lumber from Canada and quotas on Northbound US dairy products.

During this time, The Wall Street Journal Editorial Board weighed in last month to call law enforcement Jones “economic destruction” and call on President Joe Biden to “use his authority to suspend law enforcement Jones, then ask Congress to repeal it.”

For now, the scales of justice have tipped in the side of shipping companies. U.S. District Judge Sharon Gleason for the District of Alaska has approved an injunction that suspends U.S. fines, allowing tons of pollack that were previously in limbo to cross the border. It is not known how long it will take for the $ 41 million in fish to be delivered. But his ruling only lasts until the whole case can be heard on the merits, leaving open the possibility that businesses will ultimately be for millions of people.

Seafood executives say it’s a terrible time for such uncertainty as pollock sales tend to explode during Lent – and now is the time to start processing ahead of this growing demand. If so, Alaskan pollock that turns into a crispy square covered in cheese and tartar sauce may become much more difficult to find in the immediate future.

In this current debate, however, I must declare my neutrality. The provisions of the Jones Act have Costs and benefits which justify a debate on whether serves the national security interests that it was supposed to or if it is mainly a gift to US shipping companies, protecting them from foreign competition. But I can’t be swayed in one way or another by the effect this may have on the Filet-O-Fish – I’m more of the McNuggets type, myself.

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