Container port at San Pedro in Los Angeles / Getty
Market trends have created a problem perhaps best appreciated by wine lovers: a bottleneck.
As the economy recovers and consumers spend again, the increased volume of imported goods is arriving too quickly for the global supply chain to handle. Add our collective love affair with direct shipping and you get the delays you know, plus more to come, and dramatically higher costs at every logistical link.
Variations and storage requirements aside, a global wine supply chain generally looks like this: grape grower > producer > packer > exporter > shipper > importer > trucker > wholesale distributor > retailer/restaurant/bar.
Roughly speaking, currently, a process that used to take 30 days can take three months.
Part of the problem is business itself. Many distributors historically operated on a just-in-time system, receiving items as close as possible to when they are actually needed, to keep costs low. Today, “just in time no longer exists,” says Serge Lozach, managing director at Wine in Motion, a New Jersey-based importer.
Containers full of goods now wait in ships outside of U.S. ports, something unheard of before the pandemic. On October 13, the Port of Los Angeles announced it would start operating 24/7, a schedule the Port of Long Beach started last month. These two ports receive some 40% of shipping containers entering the U.S.
The West Coast isn’t where most wine arrives, but these are not the only ports with severe delays. According to Sea-Intelligence, a supply chain analyst, the schedule reliability of global ocean liners hit an all-time low in August 2021.
Don’t blame the ships, though. And don’t think workers unloading 3,500 containers in the wee hours each night means every bottle will immediately be on its way.
“We have enormous pressure from the market to execute orders in much shorter time than normal and necessary.” —Antonio Mendonça, Bacalhôa Vinhos de Portugal
Ann Boucher, the European Portfolio Director of Cutting Edge Selections, an Ohio-based distributor, attributes slowdowns to friction and shortfalls along the entire chain. She recently postponed a large Bordeaux order at the last minute because the producer had no boxes in which to pack the wine.
Antonio Mendonça, export director for Bacalhôa Vinhos de Portugal, producer of wines like Alianca Vinho Verde, says disruptions started last year with issues like rusty containers with holes. There’s now a growing lack of materials for everything necessary for wine production, including glass, label inks, paper and cardboard.
“Many imported components are in short supply everywhere, and industries are constantly lagging behind as the imbalance of shipments globally is having a knock-on effect on production,” says Mendonça.