Bret Erickson, Little Bear’s senior vice president of business affairs, says the additional inspections have already cost him “hundreds of thousands of dollars,” not to mention reducing paychecks for many shippers who have been out of work because the trucks weren’t working. they show up.
“This has directly impacted our business since the end of last week. Typically, we would receive 10-12 loads of watermelon per day from Mexico, as well as different types of herbs and vegetables. Since the middle of last week, we haven’t received any of those watermelon shipments,” Erickson said. That means the company hasn’t met its business obligations to major retailers, who in turn have had to source Mexican melons from farther afield, like Arizona. The extra distance means extra fuel costs.
“We all know that the cost of fuel these days is outrageous. Ultimately, it means consumers will bear the brunt of that higher cost,” Erickson said, adding that reduced supply generally drives up prices as well.
“As a Texas business, we were truly confused and disappointed by this decision by Governor Abbott, in a state that markets itself as business-friendly,” he said. “This was a direct hit to Texas businesses, businesses already facing rising costs in fuel, fertilizer, labor and packaging.”
Instituted in response to the Biden administration’s announcement that a pandemic-instituted impediment to immigration would be lifted, Abbott’s state inspections caused thousands of trucks to back up as much as eight miles at ports of entry. Trucks carrying household goods, auto parts and other non-perishable goods have been delayed, entangling supply chains involving hundreds of thousands of jobs on both sides of the border. Multiple days’ worth of backups could cause much of your fruit and vegetable load to go bad, rendering it worthless.
Abbott, a two-term Republican seeking re-election in November, has said he wants Mexican governors to make individual deals with him to increase security screening of trucks crossing the border. He held a press conference on Wednesday with the governor of Nuevo León, Mexico, and said they had reached such an agreement, promising to lift additional onerous inspections in one area. It is unknown if Abbott will reach similar agreements with other Mexican states and if those changes will facilitate the resumption of seamless transportation between the two countries.
Many are not optimistic about what might come next.
“Yesterday’s circus with Governor Abbott was just that: all show,” said Matt Mandel, vice president of finance for the Sun Fed, a producer and exporter primarily of Mexican-grown fruits and vegetables. “The protests on the bridges ended and traffic flowed again, albeit very slowly. It remains to be seen if the continued inspections create another scenario where truckers refuse to work again.”
A statement from several Mexican agencies, including the Business Coordinating Council and the Confederation of Industrial Chambers of Mexico, estimates the losses at $8 million per day.
Dante Galeazzi, executive director of the Texas International Produce Association, said consumers will start seeing empty store shelves this weekend in the fresh fruit and vegetable departments.
“Furthermore, it will be at least a week, if not longer, after a resolution is in place before the supply chain can be corrected,” Galeazzi said. “That means outages will persist even beyond the time a fix is deployed.”
Losses associated with the remaining port-of-entry jams depend on whether Abbott strikes deals with the other Mexican governors, said Lance Jungmeyer, president of the Fresh Produce Association of the Americas. The state of Tamaulipas, in northeastern Mexico, is key, he said, because most agricultural products cross the Rio Grande through the Pharr-Reynosa International Bridge into Texas.
Jungmeyer said that as of the opening of business Thursday at Texas ports of entry, things still looked rough and there were reports of “very slow traffic.”
“I heard that the Texas Department of Public Safety is continuing with intensive inspections outside of all ports of entry except the one announced yesterday,” he said. “The Governor of Tamaulipas seeks to meet with Governor Abbott today.”
If meetings cannot be scheduled Thursday, Jungmeyer said, at a minimum, Abbott should grant a “grace period” and suspend inspections of other ports until it has a chance to meet with governors.
Asked Thursday afternoon if Abbott has any other meetings scheduled with Mexican governors, a spokeswoman said she had no details to share at this time.
Mexico’s National Chamber of Freight Transportation, known as CANACAR, which represents Mexican trucking companies, said its members are losing millions of dollars a day due to border delays.
The chamber said the loss stems from a combination of contract breaches, perishables rotting on trucks and materials not arriving in time for manufacturing.
The most affected companies are those that work with perishable products and in the production of automobiles, the chamber said.
“We are talking about 15 to 30 hours of waiting to cross. There are products that cannot be stopped for so long, that need a controlled temperature with an air conditioner that runs on diesel, ”said a spokesman for the chamber who said he was not authorized to be quoted by name.
“But the most important thing is the inhumane conditions of the drivers and the issue of insecurity,” said the spokesman. “We already saw the burned trailers today… The line of trucks grows and grows, and you are there, unable to move, at 40 degrees (Celsius) without bathing, without resting, without security.”
– Gabriela Martínez contributed to this report.
