The economic fallout deepened on Thursday even as Texas Governor Greg Abbott, R, phased out new inspection rules for commercial trucks entering from Mexico, with some businesses saying they are unable to honor the orders because the trucks are blocked in backups of several kilometers. at several entry points.
Little Bear Produce is a Texas-based grower-packer-shipper, growing 6,000 acres in Texas and supplementing its inventory with Mexican-grown produce so it can be a year-round supplier to major grocery chains such as Wegmans, HEB, Publix, Albertsons and Kroger.
Bret Erickson, Little Bear’s senior vice president of business affairs, said the extra inspections have already cost him “hundreds of thousands of dollars,” not to mention reduced paychecks for many shippers who didn’t have work because the trucks did not show up.
“This has had a direct impact on our business since the end of last week. We were typically getting 10-12 loads of watermelon a day from Mexico, along with different types of herbs and greens. Since the middle of the week last time we didn’t get any of those watermelon shipments,” Erickson said. That means the company failed to meet its trade obligations with big retailers, who in turn had to source more Mexican melons. far, such as from Arizona.Extra distance means additional fuel costs.
“We all know the cost of fuel is outrageous these days. Ultimately, that means consumers will bear the brunt of this cost increase,” Erickson said, adding that the reduction in overall supply also makes raise prices.
“As a Texas business, we were really confused and disappointed by this decision by Governor Abbott, in a state that prides itself on being business-friendly,” he said. “This has been a direct hit to businesses in Texas, businesses that are already facing rising fuel, fertilizer, labor and packaging costs.”
In a sign of progress, Abbott held a press conference Wednesday with the governor of Nuevo León, Mexico, and said they had reached an agreement to lift the onerous additional inspections in this area. And early Thursday night, he followed up with a press conference with the governor of Chihuahua to cement a similar deal. His intention, he said, was to lift burdensome border inspections because the governor of every Mexican state that exports products through Texas ports of entry has agreed to heightened security requirements.
Abbott said the governor of Tamaulipas has already contacted his office and will meet with the governor of Coahuila soon.
“I look forward to the opportunity to meet with the Governor of Tamaulipas, which could be as early as tomorrow, where we will work to achieve similar results,” Abbott said. “Until these agreements can be finalized, however, the Texas Department of Public Safety will continue to thoroughly inspect all commercial vehicles entering the United States and the State of Texas from all Mexican states. , with the exception of Nuevo León and Chihuahua.”
Instituted in response to the Biden administration’s announcement that a pandemic-era immigration barrier would be removed, Abbott’s state inspections forced thousands of trucks back up to 8 miles at entry points. Trucks containing household items, auto parts and other long-lived goods have been delayed, tangling supply chains that involve hundreds of thousands of jobs on both sides of the border. Multi-day backups could cause much of the fruit and vegetable cargo to spoil, rendering it worthless.
Abbott, a two-term Republican re-elected in November, said he wants Mexican governors to make individual deals with him to increase safety inspection of trucks crossing the border.
“This sends a message to the president and to Congress: Texas is tired of being the unloading dock for illegal immigrants crossing the border. The new unloading dock will be Washington, DC,” Abbott said Thursday in Chihuahua.
Many are not optimistic about what might follow.
“Yesterday’s circus with Governor Abbott was just that: the whole show,” said Matt Mandel, vice president of finance for Sun Fed, a grower-shipper primarily of Mexican-grown fruits and vegetables. “Protests on the bridges have ended and traffic has started again, albeit very slowly. It remains to be seen if the continued inspections create another scenario where truckers refuse to work again.”
A statement from several Mexican agencies, including the Business Coordinating Council and the Confederation of Industrial Chambers of Mexico, put losses at $8 million a day.
Dante Galeazzi, chief executive of the Texas International Produce Association, said consumers will start seeing empty shelves this weekend in the fresh produce aisle.
“Furthermore, it will take at least a week, if not longer, after a resolution is put in place, before the supply chain can correct itself,” Galeazzi said. “This means outages will persist even beyond the implementation of a fix.”
Losses associated with the remaining traffic jams at the port of entry depend on whether Abbott reaches agreements with other Mexican governors, said Lance Jungmeyer, president of the Fresh Produce Association of the Americas. The state of Tamaulipas in northeastern Mexico is critical, he said, because the majority of produce there crosses the Rio Grande via the Pharr-Reynosa International Bridge to Texas.
Jungmeyer said as business opened Thursday at the Texas ports of entry, things still looked rough and there were reports of “very slow traffic.”
Mexico’s National Freight Transport Chamber, known as CANACAR, which represents Mexican trucking companies, said its members are losing millions of dollars a day due to border delays.
The chamber said the loss stems from a mix of non-compliance with contracts, perishables rotting in trucks and materials not arriving in time for manufacturing.
The companies most affected are those working with perishable goods and in car production, the chamber said.
“We’re talking about 15 to 30 hours of waiting to get through. There are products that you can’t stop for that long, that need a controlled temperature with an air conditioner that runs on diesel,” said a doorman. -spokesman who said he was not authorized to be named.
“But the most important thing is the inhuman conditions of the drivers and the problem of insecurity,” the spokesman said. “We have already seen the torched trailers today. . . . The line of trucks grows and grows, and you are there, unable to move, at 40 degrees [Celsius] without bathing, without rest, without security.”