Issues with the broken, or at best, limping along chain of supply have been a reality of life for wineries during the pandemic. It appears that trend is set to continue over the next year or two. The issue is not specific to one particular item, but cuts across the gamut of wine industry products, from wine glass, to tanks, barrels and amphorae. Delays are caused by issues in Europe, Asia, and here at home with our own port back-ups and transportation issues plaguing the USA as well.
Erica Harrop, President of Global Package, LLC, says it is, “Currently impossible to anticipate how long it will take [items ordered] to arrive.” She says it is a compound problem, with a lot of moving parts. “Shipping lines moved from China to Europe due to high tariffs, and during the pandemic, but now ports on the west coast, in particular Port of Oakland, are so backed up, European container ships don’t want to come here.” According to the Port of Oakland website, only 16% of overall cargo they handle is coming from Europe.
Daniel Moore, of Wine IQ, says the backup can go even further back. “We are waiting on raw materials,” he states. “There are rail strikes, shipping space issues; everything is so backed up. I don’t think anyone has ever seen the supply chain in such disarray.”
Given the energy issues created by the war in Eastern Europe, glass factories across Europe are working much more slowly, as energy is limited. “Freight may then sit waiting at a port or railyard for up to twelve weeks due to administrative issues,” says Harrop. “There is too much disorganization at the ports, too many containers, and not enough labor,” she stresses. The best advice she offers to wineries is to order wine glass at least six months ahead.
Moore is in agreement. “A lot of the winery mentality is behind the mark, and they haven’t adapted to the new normal,” he notes gently. “Before, when something went wrong, there was always another option. Now that’s not true.”
Moore’s website for Wine IQ offers an “order by” counter, so clients know when to order tanks, barrels and amphorae, which all come from Europe. “Basically, now they [wineries] need to order in the first quarter for Fall delivery,” says Moore, for any of those storage-related items.
Additionally, according to Moore, there is no projecting how high freight costs will go. “What used to be a $4,000 container, went up to $14,000 a container.” Moore is a consulting winemaker and says empathetically, “I’ve been a winemaker on the other side of this, waiting for product. It’s frustrating.”
Sadly, notes Harrop, “We have no idea what the freight is going to cost us until we get the bill.” She knows that wineries wanting to order glass ahead are not able to plan for the cost per bottle, as there is no such thing as “locking in” shipping rates at this point. Freight is such a moving target, subject to many pressures, and there is just no guarantee.
However, there appears to be some light at the end of the tunnel, if it is a bit far away and dim right now. “Costs are starting to stabilize. 2023 should be better than 2022, and 2024 should be much better,” observes Harrop optimistically.
Harrop notes that in this climate of delays, planning ahead is key to successfully receiving your wine glass or whatever your order is, in a timely fashion. “People will have to be flexible and understanding,” she says. “Please be kind to your supplier!”
Global Package and Wine IQ are both exhibiting at the North Coast Wine Industry Expo (WIN Expo) on December 1, in Santa Rosa along with almost 300 other wine industry suppliers offering an excellent opportunity for wineries to meet with their suppliers, get a better understanding of what supply and timelines might look like for all the different products they need, and placing orders before it’s too late.
Offering a well-rounded view of the wine industry, Dawn Dolan transitioned from doing administration for the University of Michigan, to spending six years as both Marketing and Wholesale Manager for the Wilson Artisan Wines group, where she learned the ins and outs of the wine industry. Dolan describes herself as a Zinfandel grape grower who has also been an amateur wine maker for fifteen years. She learned viticultural and winemaking strategies from attending classes at the Santa Rosa Junior College, as well as from the professional winemakers with whom she has worked. With this multi-faceted experience in the wine world, she brings a consideration of different viewpoints to her work.
Dolan started Dolan Wine Business Consulting, a private marketing consultancy, eight years ago. She works with wineries and a variety of wine country businesses. She has been contributing to Wine Industry Advisor since 2015.