Economic fallout worsened Thursday even as Texas Gov. Greg Abbott (R), moved slowly to repeal new inspection rules for commercial trucks coming from Mexico. Some companies claim they can’t fulfill orders due to trucks stuck at multiple entry points.
Little Bear Produce is a Texas-based grower-packer-shipper, farming 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, H-E-B, Publix, Albertsons and Kroger.
Bret Erickson, senior vice president of business affairs for Little Bear, says the added inspections have cost it “hundreds of thousands of dollars” already, not to mention the reduced paychecks for many loaders who have had no work as trucks fail to show up. This has had a direct impact on our business since last week. We would typically be receiving 10 to 12 loads of watermelon per day from Mexico, as well as different kinds of herbs and greens. Erickson stated that we have not received any of these shipments since the middle of last Week. This means that the company failed to meet its obligations to major retailers. They have had Mexican melons shipped from Arizona, so they are now unable fulfill their business obligations. Additional distance can mean higher fuel prices.
” We all know how high fuel costs these days are. Erickson stated that consumers will be the ones paying for this increased price, and that a reduced supply of fuel overall can also drive up costs.
“As Texas businesses, this Gov. He said that Abbott was making a direct hit to Texas businesses in a state which claims it is business-friendly. “This was a direct hit to Texas businesses, businesses that are already facing increasing costs in fuel, fertilizer, labor and packaging.”
In a sign of progress, Abbott held a news conference Wednesday with the governor of Nuevo Leon, Mexico, and said they had hashed out an agreement to lift the onerous additional inspections in that one area. He then held a news conference Thursday night with Chihuahua’s governor to seal a similar agreement. He stated that his intention was to eliminate cumbersome border inspections and the governors of all Mexican states exporting products via Texas ports of entry would agree to more stringent security terms.
Abbott stated that the governor from Tamaulipas has already reached out to his office, and that they would be soon meeting with the governor in Coahuila.
” I look forward to the chance to meet with Governor Tamaulipas. This may happen as early as tomorrow. We will then be working together to reach similar results,” Abbott stated. “Until those agreements can be achieved, however, the Texas Department of Public Safety will continue to thoroughly inspect all commercial vehicles entering into the United States and into the state of Texas from every Mexican state except Nuevo Leon and Chihuahua.”
Instituted in response to the Biden administration’s announcement that a pandemic-era impediment to immigration would be discontinued, Abbott’s state inspections caused thousands of trucks to back up for as much as eight miles at ports of entry. The delay of trucks containing household goods and car parts has led to supply chains that have entangled hundreds of thousands of workers on both sides. Many of the vegetable and fruit cargo could spoil due to multiday backups, making it unusable.
Abbott is a Republican two-term candidate for reelection. He said that he would like Mexican governors to make individual agreements to improve safety inspections of trucks crossing the border. This is a signal to Congress and the President: Texas has had enough of being the port for illegal immigration crossing the border. According to Thursday’s announcement in Chihuahua, Washington, D.C .,” will be the new unloading dock .
Many aren’t optimistic about the future.
“Yesterday’s circus with Gov. “Abbott was nothing more than a circus with Gov. Traffic started to flow again after the protests at bridges were over. However, it was slow. It remains to be seen if the continued inspections create another scenario where the truckers refuse to work again.”
A statement from multiple Mexican agencies, including the Business Coordinating Council and the Confederation of Industrial Chambers of Mexico, pegs the losses at $8 million per day.
Dante Galeazzi is the chief executive officer of Texas International Produce Association. He stated that consumers would start to see empty shelves in fresh fruit and vegetable departments this weekend.
“Further, it will take at least a week if not longer after a resolution is in place before the supply chain can correct itself,” Galeazzi said. “That means outages will persist even beyond the time a solution is implemented.”
Losses associated with the remaining port of entry logjams depend on whether Abbott makes agreements with the other Mexican governors, said Lance Jungmeyer, president of the Fresh Produce Association of the Americas. He said that Tamaulipas, in northeastern Mexico, is crucial because most produce crosses the Rio Grande via the Pharr-Reynosa International Bridge to Texas.
Jungmeyer said that as of the opening of Thursday’s business at Texas ports of entry, things still looked rough and that there were reports of “very slow traffic.”
Mexico’s National Chamber of Freight Transport, known as CANACAR, which represents Mexican trucking companies, said its members are losing millions of dollars per day because of delays at the border. The chamber stated that the losses are due to a combination of not complying with contracts and perishable goods getting rotten in trucks as well as materials arriving late for manufacturing. The chamber stated that the most affected businesses are those involved in perishable goods production and automotive manufacturing.
“We are talking about 15 to 30 hours of waiting to cross. A few products cannot be stopped long enough, so they need to run on diesel-powered air conditioning.
“But what is most important are the inhumane driving conditions and insecurity,” said the spokesperson. We saw the trailers that were burned today. … The line of trucks grows and grows, and you are there, without being able to move, at 40 degrees [Celsius] without bathing, without resting, without security.”
Gabriela Martinez contributed to this report.