Bret Erickson, Little Bear’s senior vice president of business affairs, says the extra inspections have already cost him “hundreds of thousands of dollars,” not to mention reduced paychecks for many shippers who haven’t had a work because the trucks do not show up.
White House, truckers blast Texas as inspections snarl Mexican traffic
“It has had a direct impact on our business since the end of last week. We usually received 10-12 truckloads of watermelon a day from Mexico, along with different types of herbs and greens. Since the middle of last week, we haven’t received any of these watermelon shipments,” he said. This means the company failed to meet its trade obligations with major retailers, who in turn had to source Mexican melons from further afield, such as Arizona. Extra distance means extra fuel costs.
“We all know the cost of fuel is outrageous these days. Ultimately, this means consumers will bear the brunt of this cost increase,” Erickson said, adding that the reduction in overall supply is also driving up prices.
“As a Texas business, we were really confused and disappointed by this decision by Governor Abbott, in a state that prides itself on being business-friendly,” he said. “This has been a direct hit to businesses in Texas, businesses that are already facing rising fuel, fertilizer, labor and packaging costs.”
Biden administration to lift pandemic border restrictions
Instituted in response to the Biden administration’s announcement that a pandemic-era immigration barrier would be removed, Abbott’s state inspections forced thousands of trucks back up to 8 miles at entry points. Trucks containing household items, auto parts and other long-lived goods have been delayed, tangling supply chains that involve hundreds of thousands of jobs on both sides of the border. Backups lasting several days could cause a large portion of fruits and vegetables to spoil, rendering them worthless.
Abbott said he wants Mexican governors to make individual agreements with him to increase safety inspection of trucks crossing the border. He held a press conference Wednesday with the governor of Nuevo León, Mexico, and said they had reached such an agreement, promising to lift onerous additional inspections in one area. It is unclear whether Abbott will enter into similar agreements with other Mexican states and whether these changes will facilitate the resumption of smooth road transport between the two countries.
Mexico’s avocado ban could be deadly the longer it lasts
Many are not optimistic about what comes next.
“Yesterday’s circus with Governor Abbott was just that: the whole show,” said Matt Mandel, vice president of finance for Sun Fed, a grower-shipper primarily of Mexican-grown fruits and vegetables. “The protests on the bridges have ended and traffic has started 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 government agencies, including the Business Coordinating Council and the Confederation of Industrial Chambers of Mexico, put losses at $8 million a day.
Losses associated with the remaining port bottlenecks depend on Abbott reaching agreements with other Mexican governors today, said Lance Jungmeyer, president of the Fresh Produce Association of the Americas. The state of Tamaulipas in northeastern Mexico is critical, he said, because the majority of produce there crosses the Rio Grande via the Pharr-Reynosa International Bridge to Texas.
U.S. imports little from Ukraine and Russia, but food and farm costs set to rise
Jungmeyer said as business opened Thursday at the Texas ports of entry, things still looked rough and there were reports of “very slow traffic.”
“I hear that the Texas Department of Public Safety is continuing its intensive inspections outside of all ports of entry except the one announced yesterday,” he said. “The Governor of Tamaulipas is looking to meet with Governor Abbott today.”
If meetings cannot be arranged today, Jungmeyer said, Abbott should at a minimum give a “grace period” and cease inspections for other ports until he has a chance to meet.