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Ongoing backlogs clog ports, delay crop shipments

Issue Date: June 23, 2021
By Ching Lee
Loads of almonds destined for export sit in cold storage at PR Farms in Fresno County as they await delayed shipment from the Port of Oakland.
Photo/Jasbir Purewal

With harvest season of summer fruits and other perishable crops ramping up, California agricultural exporters say ongoing delays at West Coast seaports could cause more products to spoil before reaching their destination—and frustrate more customers, who may look elsewhere to fill orders.

Pandemic-fueled purchasing in the U.S. and the onslaught of e-commerce goods, most coming from Asia, have inundated West Coast ports. The ports have been trying to keep up with the surge in cargo since last fall and have faced disrupted shipping schedules and equipment shortages for marine terminal operations, railroads and trucking companies.

Vessel backlogs have left California agricultural exporters "living in a world of uncertainty," said David Najarian, vice president of Paramount Export Co. in Alameda County, as they've been unable to guarantee to their customers that their orders would arrive in a timely fashion—and in the condition they expect. He noted shipments have been taking two to three additional weeks to reach their destination.

"When you're dealing with perishable products, it's just awful," he said.

Until now, Najarian, who exports fresh fruits and vegetables, said citrus fruit has been the main perishable commodity that faced "arrival issues" due to port delays. Now that he's shipping more nectarines, plums and grapes, he said he expects to see more fruit decay if port slowdowns don't improve.

"We're trying to figure out what to do," Najarian said, noting that he may turn to more air transport, which raises the shipping cost upwards of 83%—a price he said he's not sure markets can bear.

With port slowdowns not improving, Solange Colonna, director of operations and logistics for The Fresh Connection in Contra Costa County, said exporting commodities such as melons, stone fruit and grapes—all of which normally go by ocean—now poses too big a risk. Shipping season for grapes is around the corner, she noted, and it remains unclear whether farmers and packers are willing to chance it by boat or if more items will end up going by air.

"There's only so much we can ship by air," she said. "It's very expensive and you don't get to ship much volume at a time. Down the line, if everyone decides to air-freight everything, then that's going to be another problem with air space."

Colonna said even though she remains optimistic some of the backlog will clear by August or September, it's more likely relief won't come until the end of the year, unless longshore workers can unload cargo more quickly.

To address vessel congestion and improve handling of record levels of cargo at the Port of Oakland, the Pacific Maritime Association and the International Longshore and Warehouse Union Local 10 announced last week they would provide training to hundreds of existing workers by the end of June.

Peter Schneider, president of Fresno-based TGS Logistics, said he expects those workers will be at the terminals by the end of July, which "should help with putting more cargo through." Due to demand, steamship lines have placed orders for new ships, he noted. They've already chartered most of the world's supply of ships and "there's no more available to lease or rent."

Even so, agricultural shippers remain "very worried that ships will not be on time," Schneider said, and they're also contending with a shortage of refrigerated containers and chassis used to transport those containers.

This early in the season, Najarian said it remains to be seen who's willing to shoulder the risk of sending perishable produce by sea. Though buyers show interest in the products, he said, overseas retailers remain price sensitive and don't like the expensive option of air freight, with some of them looking to other suppliers around the world, "which gives us more competition when we bounce back."

With stone fruit season just starting—and "good demand" on the domestic market—Najarian said farmers are not yet "panicking." This could change in another month, he added, when peak production necessitates more fruit to move to export markets.

Brandon Fried, executive director of the Airforwarders Association in Washington, D.C., said shippers with relatively high-margin products are using air freight as an alternative, "regardless of its increased cost, because they're buying time."

This has created added congestion at airports, he said, because not only are regular freighter aircraft moving cargo, but with air travel restricted during the pandemic, passenger planes, which typically carry some cargo in their bellies, have been designated to fly freight with no passengers on board. Even with the U.S. economy reopening and more leisure travelers flying again, Fried said the practice continues, noting that United Airlines alone has flown 13,000 of these charter flights without passengers as a way to "offset some of the port congestion."

As different countries start lifting their travel restrictions and there's more international travel, Fried said more airlines will be flying again, which will bring more needed belly capacity for cargo. But he said he expects there will also be fewer passenger planes carrying just freight.

"That could create some issues and exacerbate the port congestion problem," he added, "because you won't have as much space available on the planes, and this port congestion issue may not abate any time soon."

As an exporter of almonds, Robert Rocha, sales manager for PR Farms in Fresno County, said none of his customers so far have opted for air shipment, due to the huge jump in cost, despite delays that have stretched as long as five to six weeks. Because California produces the majority of the world's almonds, he said they're also less likely to turn to other suppliers. Instead, buyers are planning ahead, he said.

"They like our product. They want the product," Rocha said.

At The Fresh Connection, Colonna said buying products from other countries may be an option for buyers, but she pointed out the seasonality and shelf life of produce make early shipping difficult, unlike dealing with dry cargo.

"It's not like you can say, 'Let's ship months in advance,'" she said.

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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