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Discord at the Ports

A survival guide for strikes and slowdowns
Discord Ports

Research alternate shipping options
The West Coast delays also caused more congestion to both East Coast and Gulf ports. DiMare sells more than 1,800 produce items at the Port of Houston, where shipments were backed up two to three weeks, according to Janke. Alternatives included flying in product (raising costs to a prohibitive level for many commodities); using domestic sources (although many customers prefer imports); and renegotiating shipping deals to use other ports (increasing costs).

Oneonta shipped some fruit from alternate ports, such as Houston and Miami, and considered alternatives like truck and rail. Both the latter options required more transloading and the potential to damage product, as well as adding expense. “We can pass some of [the increased cost] to the customer, but not all of it,” Reinholt points out. “It depends on our relationship and the customer’s needs.”

BEYOND U.S. BORDERS: A PORTS & LABOR SNAPSHOT
Strikes and slowdowns in key produce exporting and importing countries can have a significant impact on the global produce industry.

In 2014, a 22-day strike at Chile’s Port of San Antonio delayed fruit exports to the United States. Chile has experienced numerous short strikes across all of its ports in recent years, as a response to labor reform and other issues.

Zach Schulman, president of New York Export Company in Beacon, NY, says two recent strikes in Chile caused produce to sit for prolonged periods. “We had to dump a whole load of plums in the local market, because with a 10-day to two-week delay in transit, they weren’t suitable for shipping.”

Such issues extend across South America and into Asia as well. In June 2015 union workers ended a three-week strike at Peru’s largest port, Callao, after agreeing to improved scheduling and benefits. Workers and customs agents in Brazil’s ports have had a number of strikes over the past several years, as have Hong Kong and Indonesian ports. Hong Kong’s dock strike in 2013 lasted 40 days, while Jakarta’s Tanjung Priok port came to a halt the same year, in both June and December.

New York Export Company uses West Coast ports to ship apples and pears to customers in Central and South America. Last year’s delays “caused a disruption in supply, an inability to live up to our commitments, and extra charges,” confirms Zach Schulman, president. Some loads of fruit sat on the pier, others were in containers but not yet on the pier, and others were shipped overland to Gulf ports. All of this led to additional diesel and trucking costs, most of which could not be passed along to the customer.

Reconsider all the scenarios
No one wants to experience another port imbroglio, but not one wants to be Chicken Little either.

Schulman spells it out: “The real problem is trying to predict it in advance. If you know a contract is up, you can tell the customer you will charge more to ship via the Gulf of Mexico,” he proposes. “But then if there’s no strike and everyone else is shipping direct, you’re not competitive.”

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