Supply chain disruptions this year are bringing challenges never seen in at least a generation, said Larry Davidson, CEO of North American Produce Buyers Ltd., Toronto, Ontario.
For more than 50 years, North American Produce Buyers has been operating out of the Ontario Food Terminal in Toronto, Ontario. Morris Shoom founded North American Produce Buyers in 1960 and the firm has grown to be one of the top fruit importers in Canada.
Davidson said logistics challenges make 2022 remarkable in a bad way.
“I’ve never imagined or experienced anything remotely like this in 25 years,” Davidson said.
Bottom line, both distributors and retailers are having trouble securing enough fruit for their typical programs, he said. “It’s not a unique phenomenon; it is hurting everybody,” he said.
Davidson said it is not just one thing causing friction.
“Every input along the assembly line is challenged,” he said. With the vaccine mandate in place in the U.S. and Canada for truckers, Davidson said that transportation is difficult to secure.
“You’ve got a situation where there weren’t enough drivers to begin with, and now we’re taking out another chunk of them from the pipeline and just making a difficult situation even worse,” he said.
At the same time, congestion at ports of origin and ports of receiving adds to the misery.
“You’ve got people that were traditionally shipping up to the West shipping into the East because the ports in the West are far (more congested) than the Eastern ones,” he said. Some of that fruit arriving in the East is then shipped to West Coast to meet customer needs.
For perishable commodities such as fresh produce, delays have consequences. Still the effect can vary by commodity, Davidson said.
“When it comes to grapes, it’s not an issue from a condition perspective, because the grapes can handle the extra transit time,” he said, noting that growing conditions in South American growing countries have been ideal this season. That fact helps minimize problems, he said.
Still container shortages in growing countries such as South Africa have held back fruit shipments by as much as 30%. Labor also has been tight at ports, he said.
“Weather hasn’t been a major issue at this point, fortunately,” he said. When the fruit arrives and is cleared and available for pickup, truck shortages and the vaccine mandate come into play.
With the new vaccine mandate, perhaps 20% to 30% of driver’s won’t go to the U.S. to pick up a load.
Thousands of containers are ready for pickup. “There’s no trucks to get them and they’re sitting,” he said. “And when the next round comes in behind them, they’re going to be sitting, because they’re not going anywhere on the ones in front of them.”
Outlook
Looking ahead, Davidson said that North American Produce Buyers is focused on the import business as a distributor.
“What we’ve just continued to add and build into both our import product offerings and our infrastructure for receiving and distributing that product,” he said. “And it’s gone very well for us.”
While retail consolidation has already happened in Canada, Davidson said one trend may be consolidation at the importer/distributor/wholesaler/middleman level.
“That is where you are going to see consolidation because as these retailers obviously are so big, they want to be serviced by equivalently sizable suppliers,” he said.
North American Produce Buyers is also investing in logistics, having opened up two logistic companies in the last seven years.
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