While most of our attention has been focused short term – filling shelves with toilet paper, eggs, milk and now meats…we need to take a step back and look globally and how that is going to impact our supply.
Remember that most of the food factories in China have been closed, they are just starting to reopen – and we import a lot of food from China. Seafood, produce, garlic and processed mushrooms to name just a few. In the case of seafood, about 95% of our supply comes from Asia. And then there is the fight and tariffs on foods imported from the EU over the Boeing-Airbus battle. And that our great wine, meats and cheese factories in Italy and France in particular are closed as well.
On top of the closures, which will cause shortages, the majority of food and beverage products from those parts of the world are shipped to the US by boats. And those require ports, and as Bloomberg reports, “the port backups that have paralyzed food shipments around the world for weeks aren’t getting much better. In fact, in some places, they’re getting worse”.
They report that in the Philippines, officials at a port that’s a key entry point for rice said earlier this week the terminal was at risk of shutting as thousands of shipping containers pile up because lockdown measures are making them harder to clear. Curfews in Guatemala and Honduras, known for their specialty coffees, are limiting operating hours at ports and slowing shipments. And in parts of Africa, which is heavily dependent on food imports, there aren’t enough workers showing up to help unload cargoes.
Then there is the problem of the shipping containers themselves. They are scattered all over the world amid the supply chain disruption and as countries shut down those containers were left stranded, some empty and some with food, both will produce shortages, and higher prices.
Bloomberg also reported that Paul Aucoin, executive director of the Port of South Louisiana, the largest tonnage port district in the U.S. biggest worry is the threat of sick workers. Covid-19 has already forced some security personnel to self-isolate, and vessel crews are no longer allowed on shore in an effort to stem the spread, he said.
“I fear we’re going to lose some workers, and when you lose workers it gets harder to keep the same pace,” Aucoin said. “We are going to see a slowdown.”