UNHAPPY HOLIDAYS FOR LOBSTER SHIPPERS

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But it wasn’t just Paris and London that were poor choices for landing perishable cargo. Many destinations in Europe had much more snow than usual. That combined with the normal Christmas-New Year’s rush made for a situation that the Canadian shipper said, “Was just bad, bad, bad.”

Then came December 26-27 and with it an incredible three feet of snow that paralyzed New York. Anyone with a television set saw scene after scene of people sleeping on the floors of JFK.

The amount of lobster had to be unpacked was mind-boggling. A major dealer said he shipped 500,000 lbs. and had to unpack 160,000 lbs. of lobster. “Because of the issues that they had with removing the snow from the area that goes from the cargo warehouses to the tarmac with the planes,” he said, “they could not bring the product to the planes. So we had a very large amount of product that came back in New York, JFK.” He explained that neither Alitalia nor Air France could move freight and that lobster shippers larger than he shipped and had to unpack more product.

Shippers heard of losses suffered by others, but could not verify numbers over 40,000 lbs., though a number of them did admit to having to unpack that many.

A Maine shipper who had to unpack “only” 10,000 lbs. said he considered himself lucky compared with those who had to unpack more. He said he knew of several trailer loads going to JFK in New York on one of the larger Boeing 939 cargo planes. When the plane couldn’t fly, he said the dealer tried to sell the lobsters in boxes at a discount there in New York, but had no takers.

A Massachusetts dealer who unpacked only 3,600 lbs. also considered himself lucky. Those who didn’t ship to Europe this past holiday season counted themselves luckiest of all. Next luckiest were shippers who used a new perishables-holding facility at the Halifax, Nova Scotia airport. This company, Gateway, has a huge, state-of-the-art refrigerated warehouse right there where freight planes can land, taxi over to the facility, load the product required, and fly on to their destinations. Over the holidays, shippers using Gateway had their flights land in airports not affected by snowstorms such as those in Liege and Amsterdam.

But the Canadian also mentioned not having enough air cargo space. Because in Canada fewer people fly in winter, instead of using less fuel-efficient wide-bodied cargo planes, airlines use more fuel-efficient narrower-bodied ones. And because of being unable to secure enough cargo space, the Canadian lost an order for an additional 30,000 to 50,000 lbs. of lobster to a sale already made. He added, though, that thanks to using Gateway, his company needed to unpack fewer than 5,000 lbs., and considers himself “extremely lucky.” Of Gateway, he said, “It was tremendous for efficient and timely loading of charters in December.”

Despite Canada’s luck in having this new refrigerated airport holding facility, that major airports were unable to land or take on perishable cargo caused an astronomical amount of lobster lost.

“The vast bulk of the industry suffered from these various incidents to varying degrees,” the Canadian said. “Lots of companies unpacked 25,000 lbs. or more. That is a huge loss short term and long term. You really only get to pack these winter lobsters once,” he explained. “The second time around they do not perform nearly as well.”

Whenever a shipper has to unpack lobster he loses money. It’s a matter of the amount of time a lobster is out of water and the stress to the animal from being handled. Asked to explain how shippers re-sell returned product, the Canadian said he could speak only for how his company handles it.

“We bring back lobsters that have been packed and out of water for from 6 to 48 hours,” he explained, saying the returned lobster goes to a special area designated, “Returns. Those Returns,” he said, “are allowed to regain strength and sustenance over a three-day period following the unpack. They need to take in water, oxygen and get acclimatized again before anything takes place.” If the lobster recovers from the initial pack and unpack in sufficient condition, then, he said, “We will contemplate re-shipping it again at a future date to other customers.” But, he said, “We will send that product on an overnight basis only. An overnight flight ... will work perfectly well; there will be no [shrinkage] issue whatsoever.”

“I will not ship returned product to a long-distance customer in Asia,” he said, “and I will not ship returned product to our long distance customers in places in Europe. The longer the transit time, the more challenging the ordeal on the lobster; therefore, it’s not fair to send Copenhagen or Shanghai a returned lobster. It just won’t perform well.”

But, “In the event the product has been compromised... due to stress, strain, wear and tear,” he said, “we would sell it off to a processor. The challenge with selling it to a processor, though, is there’s generally a 25- to 75-cent loss, not counting packaging, ... labor, ... finance, [etc.] You lose a buck a lb.” A US dealer corroborated that amount.

“There’s always a loss,” the Canadian continued, explaining that it’s a matter of how much. The first pack costs a shipper 50 or 60 cents, even if a dealer re-sells the same lobster at the same price with no mortality, or shrinkage, he still has lost that initial packing loss of 50 or 60 cents. He said, “It’s a matter of mitigating your loss without compromising your quality or your brand.”

This past holiday season, a Maine processor said that once the boat price of lobster went above $4.25/lb. it had gone beyond a point where processors could recover their cost, so US processors did not process.

As for Canadian processors, snow created tremendous losses for those who held crated product in tidal pounds. Lobster cannot tolerate fresh water and live, and snow is frozen fresh water. This meant losses of the entire cost of each lobster plus the additional costs of labor and transit: a whopping loss.

Canadian shippers made out best because of being able to ship from Halifax, where they know how to cope with tremendous amounts of snow, and because they shipped to such alternative airports as Liege and Amsterdam for product flying to Europe and Asia. A knowledgeable Canadian said that although Canadian shippers may have had delays in having their product reach customers, “It wasn’t a wipe-out. They handled it.”