The recent labor slowdown at U.S. Pacific coast ports, plus continuing congestion problems, could result in the loss of U.S. agricultural exports particularly in the time-sensitive perishable market according to a refrigerated terminal executive.
Mike Girdner, owner/developer at M&L Refrigerated Terminal, Inc. (M&L) located at the Port of Stockton, California, says logistics at U.S. ports must improve and “repurpose local and regional assets, or the United States is going to lose market share.”
Girdner says that the United States “has a number of competitors who are calling attention to what is going on in the U.S.” and are prepared to take markets away.
The refrigerated business is a “low volume but high value export market” and because products are perishable and require refrigeration, they quickly lose their shelf life if they are not expeditiously moved from producer to end users abroad. Girdner noted that the impact on perishables includes U.S. producers of beef, chicken, and pork, as well as citrus and produce, who export abroad. He said recent disruptions at ports such as Oakland and other ports lead to backups throughout the country. This ultimately leads to the inability to move agricultural products at all and has an adverse impact on jobs, not just in California, but also in Mid-American states such as Kansas and Iowa.
Mike Bowden, owner of RIM Logistics at the Port of Stockton, echoed Girdner’s sentiments. He noted that “when there is a slowdown in the unloading of import containers, there is a slowdown in the supply of refrigerated export containers, and the result is that both importers and exporters are suddenly unable to move product.”
Bowden noted that exporters of tomato paste are in a better position to withstand dislocations because their product is canned and not refrigerated. Exporters of protein, such as beef, pork and chicken cannot afford to wait and suffer losses when delays occur.
Girdner noted that congestion problems at Oakland and other ports had been getting worse even before the most recent labor dispute.
The need to “repurpose U.S. logistics assets and operations is necessary to safeguard export markets and re-establish the reputation of the United States as a reliable exporter,” he says.
The Port of Stockton M&L facility is served by both the Union Pacific and Burlington Northern Santa Fe Railroads. Adjoining intermodal facilities exist for truck to rail transfers at both the Union Pacific’s facility at Lathrop and the Burlington Northern Santa Fe facility at Mariposa.
The Port of Stockton handles over 6000 rail cars per month that allow for tremendous volumes of cargo to flow through the uncongested gates of the port, destined for more than 30 countries via direct ships, Girdner said.
Girdner said that he was a supporter of the M580 tug/barge service between the Ports of Stockton and Oakland. The service was discontinued by the Port of Stockton due to the extensive time necessary to get local and regional volume commitments to cover high start-up costs.
Girdner says that M&L was able to ship as much as 20% more weight per container on the barge than was possible trucking the container by road, due to legal highway weight restrictions.
“Twenty percent more cargo results in a huge savings in logistics and equipment and even an average of 12% is still substantial compared to transporting by road. The savings is also appreciated by the foreign customer…. A similar savings is available when transporting perishable goods in refrigerated containers.”
In addition to the M580 barge, the Port of Stockton had over 250 vessel calls last year, Girdner and Bowden said. They are working on direct refrigerated ship service as a potential solution to the ever-increasing congestion at California’s main ports.
