Industry Responds to Potential Border Delays

Industry Responds to Potential Border Delays



WASHINGTON, DC - Last week, on March 27, 2019, U.S. Customs and Border Protection (CBP) Commissioner Kevin McAleenan issued a statement detailing plans to reassign as many as 750 CBP officers from ports of entry along the U.S.-Mexico border to assist U.S. Border Patrol with the processing of migrant crossings along the border. The statement also noted the inevitable “slowdown in the processing of trade” that would occur—a slowdown that, many note, will hit fresh produce importers and exporters harshly because of the perishable nature of their products and the complex interconnectivity of the supply chain.

Both the Produce Marketing Association (PMA) and the United Fresh Produce Association issued statements urging the Trump administration to reconsider the move, and dial back the bellicose language with which the President had been warning of a potential total shutdown of the U.S.-Mexico border. This morning, the President announced plans to give Mexico a "one-year warning," delaying any potential border shutdown, but tweets sent late last week have created a sense of uncertainty.

Both the Produce Marketing Association (PMA) and the United Fresh Produce Association issued statements urging the Trump administration to reconsider the move, and dial back the bellicose language with which the President had been warning of a potential total shutdown of the U.S.-Mexico border

“CBP will be forced to close some processing lanes, potentially in the ports of El Paso, Laredo, Tucson, and San Diego. In addition, officials at the port in Nogales, AZ, have announced closing commercial border traffic on Sundays,” United Fresh’s statement noted. “These steps will cause significant harm to growers, wholesale distributors, transportation companies, grocery stores, restaurants, and most importantly, U.S. consumers. On behalf of the fresh produce industry and the broad cross-section of members we represent, we urge the Administration to reconsider these steps…”

I spoke with Dante Galleazzi, President and CEO of the Texas International Produce Association (TIPA), to learn more about the situation on the ground.

Dante Galleazzi, President and CEO, Texas International Produce Association“So far, I have only heard of the El Paso Bridge suspending its weekend service. All the other bridges are open during their normal days and normal hours, but what’s being affected is their capacity to process trucks,” Galleazzi told me. “That’s to say if the average process takes two to three hours, that process is elongated now because there are few agents working to ensure the flow of traffic moves quickly.”

Galleazzi noted that the timing of these slowdowns couldn’t be worse: “This is going to impact us, particularly in fresh produce because we’re coming up on a holiday, with Semana Santa in Mexico and Easter in the U.S. Typically, around this time you start to see volume picking up. As volume picks up due to holiday traffic, typically we see delays in crossing, but as that picks up this year, those delays in crossing are just going to be amplified across the entire border—from Texas all the way to California.”

The real consequences of these delays, though, it seems, will be economical. United Fresh cited the San Diego Association of Governments and California Department of Transportation who “indicated that even an extra 15 minutes of wait time could generate as much as $1 billion in lost productivity and 134,000 lost in jobs annually.”

“Texas crosses seven billion dollars worth of fresh produce every year. That means you’ve got this massive supply chain that is involved with this process,” Galleazzi added. “When you start having these protracted delays, you’re going to have a lot of costs that are going to go from the bottom all the way to the top, and most of the folks at the bottom of the supply chain are going to feel it immediately.”

Produce operators working along the U.S.-Mexico border voiced their displeasure with the reassignment of CBP officers and the subsequent slowdown of commercial traffic.

 Matt Mandel, VP of Operations, SunFed® “Anything that hampers international trade is probably not for the benefit of the country on the whole, regardless of your stated goal. You’re going to be using a hatchet where you need a scalpel, and there will be negative, unintended consequences,” Matt Mandel, VP of Operations for SunFed® told me. “One of those unintended consequences is going to be the deterioration of trade with one of the U.S.’s top three trading partners. Regardless of security outcomes that President Trump is trying to achieve, hampering international trade is just not good business. Realistically, the person that will lose out in the long run is the American consumer. Anything that disrupts the balance between supply and demand is going to harm the consumer. And let’s face it—Mexico is going to feel the sting, but the U.S. is going to feel the sting just as much; to say that Mexico is going to be on the losing end of this is just short-sighted.”

Bret Erickson, SVP Business Affairs for J&D Produce, told me that, as of April 3, J&D had yet to experience significant delays, but anticipated deleterious effects in the future.

Bret Erickson, SVP Business Affairs, J&D Produce“We are very concerned with the reallocation of CBP staff away from their normal cargo processing duties to now being focused on border security efforts," said Bret. "We are closely watching the situation as it develops, communicating with our customers, and leaning on our state and national trade associations and our Texas delegation to not only keep us informed but actively work to prevent a slow down in our business operations. Although we have not yet experienced any crossing delays, we are bracing for potential delays of our imported commodities. We are in constant communication with our customers, keeping them up to date with timelines as we know them as well as briefing our customers on the specifics of what is occurring at the Pharr bridge.”

On April 3, a CPB/Trade meeting update from the Laredo Field Office—the office responsible for overseeing eight ports of entry from Brownsville, TX, to Del Rio, TX—noted that 15-20 percent of the office's staffers had been reassigned. The update outlined the following bullets:

  • Due to short staff, some of bridge lanes are closed
  • World Trade Bridge – out of 15 lanes, 6 are open for regular cargo and 3 for FAST
  • Colombia Bridge – 2 regular and 1 FAST lane are open
  • World Trade Bridge – usually processes 8,000 northbound daily, they are currently processing 5,000. 3,000 trailers backed up in Mexico
  • Colombia Bridge – usually processes 1,700 northbound daily, they are currently processing 1,000. 700 trailers backed up in Mexico

 

Colombia Bridge – 2 regular and 1 FAST lane are open

The report also affirmed that the Mariposa Commercial Facility in the port of Nogales, AZ, and Eagle Pass, TX, have both already decided to close during weekends, and Laredo has considered the option, though it currently has no plans to do so.

“The average time of a truck crossing is four hours from when the trailer arrives at the Mexican toll booth to the CBP primary lane. That does not count the line on the Mexican side, which can be a couple of miles long. This is being measured manually by CBP at all ports” the update notes, adding: “No need to port shop. All southern ports are working the same. They are being consistent; small ports have even less personnel.”

Delays are already taking effect, with serious economic repercussions. And the threat of a complete shutdown bodes even worse ramifications. President Trump has reported backed away from the threat of a complete and immediate shutdown, though he still considers a border closure a viable option. 

“I will do it. You know I will do it, I don't play games,” President Trump told reporters at the White House, according to a Washington Examiner report. “So we're doing it to stop people. We'll give them a one-year warning, and if the drugs don't stop or largely stop, we're going to put tariffs on Mexico and products, in particular cars...If that doesn't stop the drugs, we close the border.”

Those in the industry that I spoke with were less sold on the viability of a border closure. 

“If the border were to have a full closure it would be absolutely disastrous,” said Galeazzi, noting that Mexico supplies 90 percent of the avocados, mangos, and limes U.S. consumers enjoy, and supply of each of those items would dwindle to nothing in a matter of weeks.

Tommy Wilkins, Director of Sales, Grow Farms TexasTommy Wilkins, Director of Sales, Grow Farms Texas, and member of the Fruit and Vegetable Industry Advisory Committee, added: “Closing the border for any time would be incredibly detrimental to everyone. From producers to consumers it is costly. We hope this is not a reality.”

“The concept of closing the border is absurd,” added Erickson. “It would create a wave of economic turbulence across the entire country, and it would undoubtedly result in U.S. business closures and job losses. We are confident that cooler heads will prevail and that the Trump Administration will not put U.S. businesses at risk by shutting down the border. International trade is so critical to the U.S. economy, it’s absolutely critical that our borders remain open and that we are adequately staffing our ports of entry to the point that the flow of trade can continue uninterrupted, the U.S. economy and U.S. consumers depend on it.”

For more on the U.S.-Mexico border as the situation evolves, keep reading AndNowUKnow.