Produce prices Hawaii consumers, who have been scooping up Spam and toilet paper in response to the dockworker lockout, soon may be facing another crisis at their neighborhood supermarket: higher produce prices.
expected to jump as
lockout lingers on
The West Coast labor dispute
Plant closures coming, even if ports open
is forcing isle suppliers to use
more expensive air freight
By Dave Segal
dsegal@starbulletin.comMark Teruya, president of Armstrong Produce Ltd., said the additional cost of flying in perishables likely will be reflected in prices at some stores this weekend and next week.
"The air freight is about 2 1/2 times the cost of ocean freight, and the increase is passed on," said Teruya, who operates the state's largest produce distributor. "It's a shame the outcome from this lockout is causing the people from Hawaii to pay this exorbitant amount for freight."
Fallout from the five-day West Coast port lockout seemed to pick up steam in Hawaii yesterday as the standoff continued between representatives of the International Longshore & Warehouse Union and the Pacific Maritime Association, which represents shippers and terminal operators.
Hawaii freight forwarder DHX handed out temporary furloughs yesterday to about 50 percent of its 38 dockworkers. Operations Manager Ken Cho said the workers were being encouraged to use whatever vacation they had available.
"There's no containers that we have to work," said Cho, who described the workers' responsibilities as unloading containers, tagging and reloading. "Eventually, it's just a domino effect," added Cho, who said the furloughs could spread to transportation workers and then to administrative employees.
Cho said Matson Navigation Co. and CSX longshoremen are still working but that Matson has called a meeting for late this afternoon or early evening to discuss the situation with major truckers, freight forwarders and some shippers.
"If there's no resolution on the West Coast, we'll probably know what will happen Saturday, Sunday and next week," Cho said.
Meanwhile, Matson's flagship, the R.J. Pfeiffer, was the last container vessel to arrive in Hawaii from the West Coast as it sailed into Honolulu shortly before noon yesterday with a wide range of commodities.
The Pfeiffer, which left Los Angeles half full Sunday after an initial 38-hour lockout lifted, was carrying items such as fresh produce, construction materials and automobiles.
The reserve vessel Lihue, which was added to Matson's regular seven-ship fleet two weeks ago, left Honolulu for Los Angeles about 1 p.m. yesterday carrying household goods, macadamia nuts, automobiles and other typical eastbound cargo.
"We're not accepting perishables, refrigerated, livestock or nursery products because there's such uncertainty as to when that ship will be worked," Matson spokesman Jeff Hull said. "Even if operations resume, it may be some time before it will be able to go to a terminal and receive labor."
Hull also said Matson will be modifying its hours of operation at its Honolulu terminal next week for customers to pick up and receive. He said the terminal will be open from 7 a.m. to 4 p.m. today, Monday and Wednesday, and 7 a.m. to noon next Friday. It will be closed Saturday, Sunday, Tuesday and Thursday.
"That's clearly because demand will be significantly reduced," Hull said. "But there's still work at the yard as far as what came off the Pfeiffer, military cars still being received, maintenance work, containers and cranes.
"We'll order more labor when we have vessels in port. Depending how long this lasts, when the West Coast ports reopen, it would be at least five days before you see ships coming in," he said.
The urgency of the situation brought another plea from Gov. Ben Cayetano to grant the state an exemption.
"You would hope they would continue to talk, at least on the request for exemption for both Alaska and Hawaii," Cayetano said yesterday. "They can drive their supplies to Alaska, but they can't drive supplies to Hawaii."
An agreement was reached today to allow shipping to begin to Alaska. However, no similar deal included Hawaii.
The PMA had said that it wants the union to sign a contract extension to allow goods to be shipped to Hawaii and Alaska, but relented today after a request by Alaska's governor. A person close to the mediation talks told the Star-Bulletin yesterday that the two sides were discussing with the mediator a way to get goods to Hawaii without a contract extension.
In the meantime, produce suppliers like Armstrong continue to look to the air to ship their goods. Teruya said he had 80,000 pounds of produce that did not make it on the Pfeiffer Sunday as scheduled. Consequently, he said he had to spend $20,000 to fly the goods to Hawaii instead of $8,000 if they had gone by sea.
"We had our normal amount come in this past Sunday and another shipment came in Wednesday, but now the supplies are starting to dry up," Teruya said. "Air space is also starting to become a problem now as more people are fighting for it."
As a result, Teruya said he has turned to locally grown products that are in good supply, such as head cabbage, papaya, bell peppers, cucumbers, tomatoes, sweet potatoes and ethnic leafy cabbage like choy sum, kai choy and pak choy.
"We're also getting Halloween pumpkins grown in Kunia and Ewa so we don't have to bring in mainland pumpkins," Teruya said. "We started that last year, so a positive is that we'll have pumpkins for Halloween."
Teruya, who said he already uses air freight service daily for perishables like mushrooms and gourmet items, said he'll now have to fly in staples for the first time, such as potatoes, onions and carrots.
Roger Godfrey, president of Times Super Market Ltd., said he has not been notified of any price increases by supplier Fleming Cos., which provides the grocery chain with its produce.
"Most of the manufacturers are subsidizing the freight at this point, but I don't know how long that will last," he said. "You can't stockpile perishables."
Honolulu-based Dick Pacific Construction Co. has not seen any impact yet.
"We had anticipated a possible lockout or strike, so when we scheduled work we planned in advance several months," said John Ogoshi, Dick's business development manager. "Most of our work at this point is related to the interiors of the buildings because the two major projects we're working on are the Pacific Command headquarters at Camp Smith and the Marriott Ko Olina time-share. We have done most of their exterior work, and we mainly have to finish the interiors. We have in stock drywall, flooring and paint."
Chris Pablo, director of public affairs for Kaiser Permanente in Hawaii, said the health care chain also is in good shape.
Pacific Maritime Association
International Longshore and Warehouse Union
