As ‘McLarge’ French Fries Come Back to ‘McMenus’ in Japan, Idaho Potato Sector and Other Exporters Count the Losses
They’re back! If large-size orders of french fries are not already being served at McDonald’s outlets in the Land of the Rising Sun, they very soon will be returning to menus.
McDonald’s Japan has announced that all sizes of fries will be available again at its 3,600 or so restaurants nationwide by no later than January 5. The fast food chain has limited customer orders to small sizes since December 17, in a measure to cope with shortages due to delayed deliveries of frozen potato products from American suppliers whose export schedules have been affected by labor dispute slowdowns at West Coast ports. Approximately 1,000 tons of fries have reportedly recently been airlifted across the Pacific (Japan consumes more than 300,000 tons per annum), and other measures have been taken to improve inventory conditions enough to resume normal sales, according to a McDonald’s spokesman.
Meanwhile, US Pacific Coast port congestion, terminal closures and other disruptions attributed to unsettled contract negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) continue to cause product delays, lack of available equipment, increased costs and lost sales.
The dispute is hurting the agriculture industry in Idaho, which relies on exports as one of the pillars of its economy. Virtually all cargo exported from the West Coast, especially containerized cargo, is impacted. This includes fruits, vegetables, beef, dairy products and other items, as well as partially cooked frozen fries used by QSR operators, according to the Idaho State Department of Agriculture.
The potato sector has suffered from numerous lost loads. Some customers have cancelled orders because they can’t get product delivered. Orders have sat at the port for a week and a half only to be brought back to Idaho.
The slowdowns at the ports are wreaking havoc on previously signed contracts and price negotiations with new and current clients, according to Frank W. Muir, president and ceo of the Idaho Potato Commission.
He elaborated: “Container loads have been ordered and paid for, but are not reaching their destinations on time. Shippers aren’t quoting new shipments because the cost of transportation is increasing on a daily basis and there is no assurance they can get a truck within a week, or then find container space on a ship within a calculable timeframe. The port issues could cause us to lose customers, in particular in Asia, to competition from Europe or Australia.”
“We have seen a significant negative impact to our business, with a reduction of almost 70% of our export volume costing us millions of dollars,” said Brad McDowell of Boise-headquartered Agri Beef Co. “Unfortunately this loss also means that we have had to cut back our operational hours impacting our people and their livelihoods. Globally, our customers are questioning the reliability of American suppliers – and that has opened the door to international beef competitors. We may never fully recover our export business, regardless of when this is resolved. What we spent decades building can be destroyed in weeks. It’s not a good situation and will have a serious impact on all agriculture business.”
Symms Fruit Ranch estimates that its export sales are down 20% this year due to the port disruption. Of the product that is being exported, nearly 80% has suffered delays due to the work stoppage.
“Many full containers spent a week or two on the docks at a port waiting for vessels to dock. Because of the equipment shortage many loads had to be placed in cold storage in Seattle, Long Beach, San Francisco and elsewhere. Our expenses ranged from $200 to over $1,000 per load, depending on the amount of time in storage waiting to be loaded in containers and then placed on a vessel,” explained Jim Mertz, vice president of the Caldwell-based company.
No part of the state is immune from the disruption.
“The ILWU West Coast slowdown is severely impacting Idaho’s agricultural and timber exporters. At this point, pea and lentil shippers are finding it extremely difficult to get containers out of Pacific Northwest ports,” said David Doeringsfeld, general manager at the Port of Lewiston.