As the U.S. Gulf Coast continues to struggle with the widespread damage caused by Hurricane Katrina, reports are painting a very bleak picture for food shippers around the country, many of which are scrambling to open alternate locations from which to move their products and to find other shipping routes and modes around the area.
The storm closed nearly all the ports, airports and railroad tracks in the region, and severely damaged several key highways, bridges and roads that are crucial for freight movement. Significant portions of Interstate 10 and U.S. 90, for example, the two main east-west highways along the Gulf Coast, were all but destroyed.
Particularly hard hit by the late August hurricane was the port city of Gulfport, MS, a hub for fruit imports from Latin America. Dole Food Co., Westlake Village, CA, imports most of its bananas, pineapples and tropical fruits from Central and South America through Gulfport. Ships of prod ucts had arrived in Gulfport weekly, but the company has now had to divert those vessels to port facilities in Freeport, TX, Port Everglades, FL, and Wilmington, DE. Chiquita Brands International, Cincinnati, receives about a quarter of all its imports of bananas and other produce from Central America through Gulfport. It, too, has had to scramble to reroute shipments through Freeport, Port Everglades and other ports.
“While we are still assessing the situation, it is clear that we will need to relocate our services from Gulfport for the foreseeable future,” says Chiquita Fresh President and CEO Bob Kistinger. “While this will obvi ously impact our logistics and shipping operations, we believe our ports in Texas and south Florida are well-positioned to maintain high service levels to our customers in a cost-effective manner.”
Coffee Takes The Hit
The Port of New Orleans, which also was seriously disrupted by the storm, is the premier point of entry for Jamaican and Puerto Rican coffee and for all coffee beans imported into the United States from Latin America. The port handled more than 252,000 tons of coffee last year alone. Once cleared in New Orleans, it is generally shipped to one of 13 warehouses, totaling more than 5.5 million square feet of space, before being processed and roasted at one of about a dozen facilities, all within 20 miles of the city.
Cincinnati-based Procter & Gamble is one company with coffee operations in and around New Orleans. It hopes to restore some operations at its four coffee production facilities in the area soon. In the meantime, P&G notified retailers Sept. 12 that there may be temporary supply restrictions for its Folgers and Millstone coffee brands. Sara Lee Corp., Chicago, also hopes to have at least a portion of its coffee-roasting plant in Harahan, LA, back up and running by the end of September. That facility handles about 10 percent of all the coffee produced by Sara Lee under the Douwe Egberts, Superior, McGarvey and Café Continental brands, along with some private label products.
Among other roasters, the condition of 1.6 million 132-pound bags of green coffee stored in New Orleans warehouses remained unknown at press time. “We still don’t know whether water has gotten into the warehouses or not,” says Joe DeRupo, spokesman for the National Coffee Association in New York. “So far, it looks as if there isn’t a lot of damage to the warehouses, but no one has been able to get into the facilities yet.”
Immediately after the storm, the New York Board of Trade suspended deliveries of coffee to New Orleans. Contracts for near-term inbound coffee shipments formerly scheduled to New Orleans have been diverted primarily to Houston, where there are a number of warehouses certified by the Board of Trade to hold coffee.
Costs And Capacity
The port of New Orleans is also a major exporting hub for the country’s agricultural industry, handling more than 615,000 tons of poultry, rice, grains, vegetables and other products each year.