Tens of thousands of dockworkers have gone on strike indefinitely, affecting about 14 ports along the East and Gulf Coasts.
"The strike is quite concerning even though as an industry, we're in the final weeks of summer citrus imports from the Southern Hemisphere," says Bill Weyland of Seven Seas. "There's still a significant amount of product in transit."
As for contingency plans, Weyland says very little could be done. Thanks to cooperation between the port operators and the storage facilities, product that arrived last week was moved out of the ports. "However we're all watching the news which is showing a massive line of trucks trying to get into the ports to either drop off empties or pick up containers available," he says. "Everyone's racing to get as much cargo out of the ports as they possibly can."
Photo: Port of New York and New Jersey
Postponing shipments
For its large citrus program from Chile, Seven Seas delayed departures by seven to eight days anticipating that if the strike would go through, it could potentially be over and congestion cleared by the time these Chilean shipments arrived.
There's concern over not only a strike happening in the first place–but the length of that potential shutdown. "Experts say for every day there is a strike, you can add three to four days at least before you will see the vessel begin to unload," says GT Parris of Seald Sweet, who adds that its team has been running several scenarios assuming the strike would happen. "You have to factor in the log jam this will create. We sometimes also only look at produce and forget that these vessels deliver much more than just produce. Everyone will want their products delivered for sales and inventory replenishment. Plus, these ships need to reload containers of goods here to deliver abroad. Without those containers coming back it just upsets the whole flow."
He says looking at current inventory and considering what vessels will make it into the port, Seald Sweet is planning for the next 10-14 days to use this product to fill customers' needs as best it can and will act as if it will not receive any fruit from strike-affected ports during this time.
This is all coming on top of an already challenging import season. "The citrus season especially out of South America has been tight to begin with, with the majority of fruit sizing up too small for retail specs, and demand exceeding supply for most of the season," says Michael Giordano of Consalo Family Farms® "Couple these issues with the impending strikes, and you will have almost zero continuity in supply. When supply eventually does become available, importers will need to assess damages on the fruit, and in turn, market the fruit to the absolute best of their ability, while also avoiding rejections and ensuring retailers have quality product to place on their shelves."
Photo: Port of New York and New Jersey
Backlog of product
At the same time, he says growers are facing the largest risk with these impending port strikes. "Not only do they have millions of dollars of product stuck either in the river or at the port, when the ports eventually open back up, the salvageable product will all be thrown into the marketplace at once, which will not be favorable for market conditions," Giordano says.
The situation also puts retailers in a very tight spot given they are faced with not having product on shelves which will put immense pressure on the domestic citrus supply. "The crisis is further exaggerated on items such as blueberries which are not in season domestically. This will have an overwhelming effect on the entire perishable department, as items that are available will be bought at a higher rate, meaning higher prices for pretty much everything," says Giordano.
It also puts pressure on the government to step into the situation as it did in 2002 when then-president George Bush invoked the Taft-Hartley Act after 11 days of a strike on the West Coast ports.
"We hope this is very short-lived and that we can get back to resuming formal operations because the industry provides an essential service–food," says Weyland, adding that of course vessels are also carrying out other essential consumer goods such as medical supplies and more. "I would think there'd be tremendous pressure from industry and lobby groups to force the administration to take action if this disruption becomes evident. Hopefully, it's no more than a day or two and then we can resume shipments."
For more information:
Bill Weyland
Seven Seas
www.sevenseasfruit.com
G.T. Parris
Seald Sweet
www.sealdsweet.com
Michael Giordano
Consalo Family Farms
www.consalofamilyfarms.com