03.17.2015  
 

Port Slowdown Hinders Wine Industry

West Coast winery suppliers report weeks of delays and lost revenues

 
by Kate Lavin
 
“wine
 
Dozens of wine industry suppliers told Wines & Vines they experienced costly shipping delays as a result of the West Coast port slowdown.

Oakland, Calif.—After working without a contract for seven months, dockworkers at 29 West Coast ports breathed a sigh of relief Feb. 20, when labor negotiators reached a tentative working agreement. But many suppliers serving the wine industry are still waiting for their shipments to be delivered, and laborers have yet to vote on the proposed contract, opening a window of possibility for further delays.

Chris Kammer, CEO of San Mateo, Calif.-based Access Supply Chain/Access Wine Service, told Wines & Vines he began warning clients of a port slowdown at the Unified Wine & Grape Symposium held in January 2014.

“We knew back last spring there was going to be a disaster at these ports. I was telling clients, ‘Be prepared for a rough spring, and ship early,’” he said. “I felt like the guy walking around with a sign saying the world was coming to an end.”

Payment without possession
Beyond the problem of delayed shipments, Kammer, who counts wineries and sellers of winery equipment among his clients, said port delays have complicated payment terms for many importers.

With a shipment currently more than two weeks late, Unionpack operations manager Tracy Totten agrees. “The suppliers want their money, yet we don’t have the product to send to customers,” said Totten, whose American Canyon, Calif.-based company provides screwcaps, capsules and sparkling wine hoods to North American wineries.

Totten was one of dozens of wine industry suppliers who responded to a survey Wines & Vines sent out to gauge the effects of the West Coast port slowdown. Of the survey respondents, more than 59% reported experiencing delays of four to eight weeks. A similar number said the slowdown had taken a financial toll on their business.

Hits to inventory
Brett Peterson, general manager for bottle supplier Vitroval USA Inc., told Wines & Vines the port slowdown already has cost his business more than $100,000. “My inventory is currently at 21% of what it should be at this time of year due to the port slowdown. My shipping costs are currently 28% higher than last November, and the rates are likely to stay high for three more months until the backlog clears.”

Peterson recounted the tale of one shipment of 2,280 cases that was booked to ship from China to Oakland. During a scheduled stop in Long Beach, Calif., the ship owner decided to cancel the final leg of the trip due to port delays. The shipper required the container be returned empty to Long Beach, meaning Vitroval had to arrange and pay for loading the goods into a truck and transporting them from Long Beach to the Bay Area.

Tom Nulman, president of San Luis Obispo, Calif.-based mobile bottling firm The Bottle Meister, said several of his Central Coast winery clients were unable to take receipt of packaging materials as a result of the West Coast port slowdown, forcing them to cancel scheduled bottling dates.

Exploring alternatives
Lucy Farber, operations manager at Alameda, Calif.-based craft beverage producer St. George Spirits, which produces custom grappa for several California wineries, told Wines & Vines, “We had a rush export order to France, which, if it couldn’t arrive by a certain date, would be cancelled. We had to arrange for the goods to ship by truck to Houston and leave from there, to be assured the order would arrive within six weeks.”

Mark Sottana, general manager of Santa Rosa, Calif.-based Inoxpa USA Inc., which specializes in sanitary stainless steel equipment for the wine industry, said the West Coast port shutdown cost his company more than $10,000 in sales. “We have a shipment of 12 crates worth over $44,000 that was supposed to arrive early last month,” he told Wines & Vines. “Our shipment left India in late November/early December for expected delivery in early February. It just now is off the ship, but we still do not know when we will receive it.”

 

 

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