Distribution firm
stocks up so residents
can chow down
Fleming Foods Hawaii's 30-day
inventory cushions the isles
if there's a dock strikeGov. Cayetano offers to mediate
By Rod Ohira
Star-BulletinBERNADIE Minor of Pearlridge and her aunt, Jiba Lautej, found the bags of rice they were looking for at Foodland Super Market's Beretania store.
"This is enough for two months, just in case the strike goes on," Minor said yesterday of the six 20-pound bags she, her aunt and another relative purchased separately to comply with the per-customer limit.
Like other residents suffering from strike anxiety, the two women started shopping for rice Wednesday night, going to 10 stores before finding the price and quantities they wanted.
And the stores, in turn, are relying on Fleming Foods Hawaii, the state's largest wholesaler, whose warehouse employees have been working around-the-clock since Monday to meet increased demands and make up for the recent slowdown on the docks.
"This is being driven by consumer panic," said Steve Christensen, Fleming Food Hawaii's distribution manager.
Details on the upcoming vote: A CRUCIAL TWO DAYS
BACKGROUND: The International Longshore and Warehouse Union Local 142, which represents dockworkers, terminated its contract Monday. The union is now free to strike but has said it will not to call a strike until after a strike authorization vote today.
"It's the fear of '71," he added, referring to the local shortages affected by the West Coast dock strike 28 years ago. "But there was no distribution center here back then. We've got plenty of everything."
Contract talks between the International Longshore and Warehouse Union Local 142 and stevedoring management are scheduled to resume tomorrow. But that seems to have done little to reduce the rush to the stores which began Monday, when the union decided to terminate a contract which had been extended past its June 30 expiration date.
Times Super Market in McCully, for instance, ran out of its daily allotment of toilet paper and 20-pound rice bags a half hour after opening its doors yesterday. It too is supplied by Fleming, which according to Christensen, has delivered more than 225,000 cases of toilet paper in the last four days.
"This reminds me of the holiday season when our volume goes up," he said.
Fleming Foods is the nation's second-largest food wholesaler and distribution firm. It purchased Foodland's warehouse and distribution operation in September 1986, and bases its Hawaii operation at Campbell Industrial Park.
Being able to deliver products quickly is the key to the company's local success."The benefit to our retailers is that we store products and have inventory available here," said Ralph Stussi, 46, Fleming's division chief who came to Hawaii in April from Lafayette, La.
"We have 95 percent of what they need on hand so if an order is placed this morning, typically, they'll receive the order in 24 hours. What the consumer bought yesterday is being replenished today. You don't get much quicker than that."
Ocean shipping from the mainland takes about 7 to 10 days, Stussi said.
Fleming employs 200 people, has an inventory of more than 18,000 items and serves about 150 accounts, including many chain operations such as Foodland, Times, Daiei, 7-Eleven and Kentucky Fried Chicken.
The company leases 350,000 square feet on Hanua Street at Campbell Industrial Park, where two of its four warehouses are located. There's another facility near Honolulu Airport and a Kalihi warehouse, which is used for its produce operation.
In a typical week, Fleming will receive, store and move three container loads of rice, or about 100,000 pounds.
David Higashiyama, vice president of marketing for Times, says operating its own distribution center would create space and manpower problems for Times.
"Running warehouse and wholesale is a difficult business in itself," Higashiyama said. "And if we needed 700 cases of say, toilet paper, we would have to buy the whole container of 1,000 cases.
"With Fleming, we can order what we need. Fleming has always been supportive of our needs. It's not always perfect, but like a marriage, we try to work things out."
Fleming uses a computer program called "FOODS" to track the movement of its dairy, produce, meat, frozen food, bakery, and health and beauty care warehouse items.
"It's important for us to make sure we're not out of items," Stussi said. "We have in excess of $20 million of inventory. We're happy if we turn it over 12 times a year."Fleming, which serves 3,000 supermarkets in 42 states, has a unique setup in Hawaii.
"We try to service a more diversified base of customers," Stussi said.
"A big part of our business is military and 60 percent of our military business is commissary."
Stussi said Fleming works on contract with vendors who are hired by the military.
Providing items for land-based military dining facilities is also a part of Fleming's military business. Y. Hata Co. handles the dinning items for military ships, Stussi said.
Fleming also serves convenience stores and fast-food restaurants, maintaining a supply of everything from marked paper goods to chicken.
"We do a lot of different businesses here and that's unique for Fleming," Stussi said. "They have separate divisions on the mainland, but we're able to do it here because we're on an island and have warehouses."
Fleming also serves the neighbor islands.
Maui gets container shipments Mondays, Wednesdays and Fridays; Kona and Hilo on Fridays and Mondays; and Kauai on Tuesdays and Fridays.
"It's very competitive and our competition comes from the mainland," said Stussi, pointing to businesses like Safeway and Costco that have their own distribution centers. "Our price includes payment to the manufacturer, ocean freight and distribution costs.
"But rent and labor rates in Hawaii are high."
A long dock strike would eventually drain Fleming's 30-day inventory.
"What are the contingencies, that's my biggest concern," Stussi said. "We can't do it with the airlines.
"Basically, we have a monopoly on ocean freight. So if they can't resolve this, I think the government has to step in as a limited contingency plan."
Fleming's employees here belong to a different International Longshore and Warehouse Union local than the one currently negotiating a contract, while its drivers are Teamsters, Christensen said.
Governor offers to act as
By Craig Gima
mediator if needed
Star-BulletinGov. Ben Cayetano says he believes union and management will reach an agreement this weekend in negotiations to avoid a statewide dock strike, and he says he's prepared to help both sides reach a settlement.
The governor is so confident, he has ordered his household staff not to hoard rice, toilet paper and other supplies.
"If the strike were to happen tomorrow, I'm afraid that we would be caught cold," Cayetano said. "I told our people, we're not going to go out and stock up on bags of rice and soap and toilet paper and all that because I feel good about what's happening right now."
After signing a contract with the State of Hawaii Organization of Police Officers giving 9 percent pay and 6 percent step increases over four years, Cayetano told reporters yesterday he is ready to step in to help mediate negotiations if he is asked.
International Longshore and Warehouse Union Local 142 President Eusebio "Bobo" Lapenia does not trust the federal mediator, Cayetano said, and the union president has asked him to mediate if negotiations break down.
"I offered my services to both sides," Cayetano said. "Management indicated to me that they would consider it, but they didn't think it was necessary."
Cayetano said he is optimistic both the ILWU and the employers will be able to avoid a strike because they know how damaging a strike could be to the state's economy.
"I think both sides don't want the rest of the state to suffer," he said.
The governor has not met with his Cabinet yet to discuss contingencies in case of a strike. He said he has the power to intervene if a crisis is declared.
"But I don't want to talk about these things too much because they become a self-fulfilling prophecy," he said.
The governor also encouraged others to follow his example and not hoard supplies.
"I would say to the public out there, don't panic. Don't hoard because basically what happens is prices will be driven up."
