Challenges Ahead
Due to the soaring growth in San Antonio, there are challenges—old and new—to face. Among them are weather-related shortages of fruits and vegetables from both inside and outside the United States; the opposite of shortages with a glut of some items due to excellent weather conditions; the stiff competition in retail, including higher fees for some suppliers and loss of lucrative contracts for others (mostly smaller, local growers); new food safety regulations; and a tight labor market, especially for the transportation sector.
Some would say it is ironic to bemoan too-perfect weather, but good conditions can lead to overabundance, and several importers were dismayed by excess supply coming out of Mexico at times, driving down prices.
Chris Damon, president of Produce Connection, which has locations in McAllen, Nogales, and Mexico, laments that, yes, too much of a good thing is, well, just that. “There’s way too much production coming out of Mexico year after year,” he contends. “The windows of opportunity are no longer there unless there’s a catastrophe, and even then, it’s short-lived.”
On the other hand, there were pronounced shortages, and when shippers did manage to secure coveted items like avocados, berries, and citrus for foodservice and retail partners, finding drivers and trucks was extremely difficult. Even worse are various holidays, like Valentine’s Day and Mother’s Day, when demand skyrockets and produce shippers must compete with floral.
Implementation of electronic logging devices is exacerbating the situation. Though federal and state authorities offered a grace period until April 1 for compliance, citations can still be written but drivers will not be put out of service or penalized until after the 90-day period expires.
Despite the mandate’s good intentions, many in the perishables industry are very unhappy about it. Some, like Williams, think it will have both short- and long-term effects on the distribution chain, impacting how suppliers buy produce going forward.
“Trucking companies will want to keep the same schedules, which probably means hiring twice as many drivers as they have now—and customers want the same delivery schedule, so they’re going to pay increased freight costs,” Williams says. “In the end, the consumer is going to pay for it.”
Damon of Produce Connection also thinks the mandate will impact rates. In November and December, prices for some destinations doubled. And while they’ve dropped since then, rates continue to be higher than in previous years. “Besides the impact of higher rates, our biggest challenge is what it takes now to get to the destination,” he says. “The communication between trucks, shippers, and receivers is of great importance.”
Future Thoughts
Although the road has been bumpy for many in the region, the Alamo City’s produce industry is adjusting and moving forward. Indeed, things are looking rosy for both suppliers and consumers, as more companies enter the market.
As Williams of Willson Davis Company puts it, “There’s just a continued and growing demand for every kind of produce.”
Images: pilphoto, Joseph Sohm/Shutterstock.com
