Washington Business Summer 2016 | Page 39

business backgrounder | economy “My first thought when it was over: How do we keep ourselves a multi-pronged initiative, built on stable labor relations, improved from being right back here in five years?” Schinfeld said. To assure transportation networks, enhanced port productivity, and expanded that the slowdown didn’t become just another nasty, nearly forgotten distribution and logistics centers to grow the cargo base. disruption in a decade littered with them, he wanted “to capture The stakes are high. Jon DeVaney, president of the Washington how painful it was.” State Tree Fruit Association, talks about the impact on the state’s He commissioned an analysis by Community Attributes Inc. (CAI) agricultural producers. to document the effects on the state economy. The apple, pear and cherry industries export about one-third of their After crunching all of the numbers, CAI determined the slowdown crop, with apples and pears relying on waterborne transport, DeVaney resulted in total near-term losses of $769.5 million to Washington said. During the slowdown, growers had to look for alternative, generally businesses. The analysis breaks down the costs: less lucrative markets or see perishable product expire. • The largest share of the loss is attributed to $555.8 million in There were few good choices. Products destined for Asian markets exports not shipped by waterborne containers. About $152.6 may not be as desirable for the domestic markets. Distinctions, million of goods were shipped by air so the net loss of goods varieties, matter. There’s no “an apple is an apple is an apple.” A not exported amounts to $403.2 million. CAI also points out Gala is not a Jazz is not a Red Delicious. that producers choosing other transport modes incurred costs Asked about contingency plans, DeVaney says there aren’t a lot. that were “upwards of 10 times waterborne shipping costs.” “It’s the equivalent of the flotation device on your airplane, if you • Trade goes two ways. The slowdown also reduced imports could call that a contingency plan,” he said. to the state. CAI estimates delayed and delinquent delivery For some growers, contingency planning begins with the decision of imported goods cost of what product to plant: Do Washington businesses you manage risk by planting $345.1 million. Retailers for the domestic market? didn’t get inventory and That’s an extreme, worst manufacturers didn’t get case response. DeVaney said parts and supplies. that replanting an orchard • Finally, there are the costs is expensive, and beyond of warehousing and storthe means of some small ing product while waiting orchardists. for shipment. Add another The best hope for Wash$7 million. Then tack on ington businesses is to see $14.2 million for truck certainty restored to the idling costs. waterfront. Washington’s Three-quarters of a billion ports — the West Coast ports in losses, however, is just the — must again be seen as relibeginning. able business partners. “Future costs, such as dam Trade leaders aged client relations resulting were encouraged in the loss of business or sole by announcements source contracts can have longi n Ap r i l t h a t t h e lasting impacts on Washington P M A a n d I LW U — Eric Johnson, executive director, Washingt