Coronavirus has crippled global shipping. That’s bad for California farmers and winemakers

By disrupting worldwide cargo shipping, the coronavirus pandemic is creating major headaches for California’s $50 billion-a-year farming industry.

From rice to pistachios to oranges, farm exporters said they’ve been struggling to get their hands on empty cargo containers needed for shipping goods to international markets.

The problem, in a nutshell: Coronavirus shut down much of China’s industry earlier this year, which means far fewer cargo containers have been sailing for American ports than usual. As a result, there’s a staggering shortage of empty containers available for shipping wine and other commodities to California’s farm customers.

“You don’t have the empties to go back,” said Jessica Brady, a marketing officer in the Benicia office of Hillebrand, a German shipping company that exports California wine through the Port of Oakland. “You don’t get the containers that you can reuse.”

The coronavirus outbreak, which was declared a pandemic Wednesday by the World Health Organization, has clobbered the shipping industry to a degree never seen before. A record 2 million containers were idle in late February, according to the Wall Street Journal.

As a result, farm trucks have been lining up daily at the Oakland docks, waiting for empty containers that they can drive back to their farm customers. It’s often a frustrating wait.

“You see the lines here in the morning and the lines here in the afternoon, and they’re not going away,” said Carleton Booker, director of sales at Fast Way Xpress Inc., a trucking company at the port.

Although there have been some signs of the problem easing, Booker said the bottleneck has been particularly troubling for citrus growers, many of whom have wrapped up a harvest worth about $3 billion.

“We have this high season right now,” he said.

Despite those problems, most citrus exports are finding their way through the ports, said Casey Creamer, president of California Citrus Mutual, a growers’ group. But he acknowledged the timing has been difficult — this is the time of year when export demand is at its peak, and the logistical issues have probably depressed business somewhat.

“It’s a major export window for our navels and some of the other commodities,” he said.

The frustration is being felt throughout California’s farm fields, where a “feed the world” philosophy has taken hold over the years. Of the state’s $50 billion annual crop, about $20 billion gets exported to Asia, the European Union and elsewhere.

Cargo is measured in the equivalent of 20-foot containers being delivered, and the shipping routes between East Asia and North America are the world’s busiest, at 27.6 million units in 2018, according to the United Nations.

“Anything that delays shipments is a hit,” said Jim Zion of Meridian Growers, a farmer-owned exporter of pistachios, almonds and pecans based in Madera. “We’re asking customers to understand that we have no control over this.”

Blue Diamond able to ship almonds

Sacramento’s largest food producer, the $1.5 billion-a-year Blue Diamond Growers, said it has been able to find containers.

“Because of the breadth of our international footprint and volume of business we do, we’ve been able to work closely with the major shipping lines and ports,” said Bill Morecraft, a senior vice president at the giant almond producer. “As a result, we’ve seen no significant impacts to our supply chain operations.”

Blue Diamond might be one of the lucky ones. Kirk Messick, a farm-export consultant based in Sacramento, said major producers are having an easier time finding containers than smaller farmers.

“Those who have relationships with the major carriers ... might have some protection,” Messick said. “It’s going to be the have’s and the have-not’s.”

Even some of the big Sacramento Valley rice growers are having difficulty shipping their product. Farmers’ Rice Cooperative, a Sacramento-based export company that sells to 65 countries, said a shortage of 20-foot-long containers has put a crimp on shipments at a time when global demand for Valley rice has jumped sharply.

“Although we are experiencing a higher demand, we are experiencing delays that extend several weeks,” said Derek Alarcon, director of export sales at Farmers’ Rice.

American Commodity Co., a rice producer in Williams, has seen the shortage of containers ease off somewhat.

“It was particularly bad around the middle of February, when China was really on complete lockdown,” said president Chris Crutchfield.

In the last couple of weeks, the flow of containers from China into the Port of Oakland has improved. The company was also able to make some shipments out of the ports of West Sacramento and Stockton, where facilities are more limited.

Officials at Hillebrand, the German shipping company, also believe more containers have been leaving China lately. But that won’t translate into immediate relief.

“It’s not happening overnight,” Brady said from Hillebrand’s office in Benicia. “There’s an ocean to cross.” The increased traffic should reach West Coast ports in another couple of weeks or so.

This story was originally published March 12, 2020 at 4:40 AM with the headline "Coronavirus has crippled global shipping. That’s bad for California farmers and winemakers."