Mexican shippers face logistics, labor challenges

Logistics challenges were a major problem in 2021, according to numerous news reports throughout the year. The greatest challenge, Mexican shippers say, has been transportation.

“I would say transportation is the most challenging aspect of our business. Freight rates have pushed us out of markets on the East coast,” said Jose Luis Obregon, president at Nogales, Ariz.-based IPR Fresh, an importer and shipper of Mexican produce.

It’s not hard to find agreement among shippers about the state of transportation and freight rates right now.

“Freight is the single-largest factor causing trouble and disruptions in the food chain. The cost to move fruit has risen astronomically,” said Mikee Suarez, sales manager at Rio Rico, Ariz.-based MAS Melons & Grapes, which specializes in Mexican produce. “Retailers can expect to pay $3,000 to $4,000 increases over normal market prices compared to the same time the past few years. In the short run, this added cost will eat into product cost but can soon become an extra cost to consumers if these high rates persist.”

The current freight situation is the most challenging. Freights have gone up. Michael Dupuis, quality assurance and public relations coordinator at Divine Flavor, hopes it levels out soon. The Nogales, Ariz.-based company has a growing location in Mexico’s Culiacan region.

Freight issues come in multiple forms. It’s not just price. Availability is also an issue.

“Freight is a challenge in both availability of drivers and the increased cost in the U.S. and Mexico, both,” said Tony Otto, sales manager at Magic Sun, which has a number of greenhouses in central Mexico.

Shippers hope there will be better options in the near future. New vehicle technology could be one answer.

“I would like to hope that we have other freight options to move fruit at a better price. From driverless trucks to better rail service, we are open to innovation to help solve the movement piece of the puzzle,” Suarez said.

Labor is another challenge Mexican shippers have had to overcome.

“Labor is a major issue in our industry. It’s so important to have good social programs. Good news spreads quickly,” Dupuis said.

At the same time, shippers appreciate those who’ve stayed on the job.

“Regarding labor, we've been able to manage through issues caused by COVID without disrupting our service. We've adapted a nimbler approach to the operation. And we're grateful to our team who has gone the extra mile the last two years,” Otto said.

Some regions are a little more difficult than others to find labor. Finding quality work can be challenging, Dupuis said.

Officials with Mexican-grown produce distributor SunFed, Nogales, Calif., said they have had to make adjustments to manage the challenges of transportation and lack of labor.

“We have implemented new technology to incentivize employees based on performance,” said Frank Camera, SunFed’s vice president of operations. “On the transportation side, we are trying to develop our own transportation arm. We currently have a three-truck fleet to help us offset some of the truck shortages.”

MAS said it hasn’t been as hard hit by labor issues as most have, however.

“Labor has been less of an issue for us, thankfully, but we have experienced some shortages of field labor down in Mexico,” Suarez said. “This has been a problem since the pandemic started.”