Source: Wine-Searcher, Freight Blues Driving up Wine Costs by W. Blake Gray

There’s plenty of wine in the world, but transport woes mean getting hold of it is the big challenge.

Expect to pay higher prices for wine this fall – and prepare for the possibility that your favorite wines may not make it to your local store.

I have already noticed this with sake: the selection isn’t as wide as last year. It won’t be long before you notice it on wine as well.

The reasons have nothing to do with wine itself, and everything to do with logistics. Your favorite Burgundy could be stuck anywhere along the route to your door, says wine logistics expert MaryAnn Pisani.

Pisani is the chief revenue officer for MHW, a Long Island-based company that does basically everything in the wine industry except make and sell wine. You might say: “What else is there?” MHW is a licensed importer and distributor, it handles regulatory paperwork, and it arranges warehouse space, trucks, and everything else in the wine logistical chain. Pisani says that right now every link in that chain is more stressed than she has ever seen.

“These are things I’ve never seen in 25 years,” Pisani said. “I’ve never seen product that’s not moving out of the warehouse. That holdup has never occurred before.”

Pisani says the logjam started before the pandemic because of the Trump tariffs on European wine. She said a lot of big importers, surprised by the first round of tariffs, decided to bring in containers of wine before more tariffs could be imposed. At the same time, a tax break on alcohol called CBMA was set to expire at the end of 2020, and importers wanted to rush to get their products in before that happened. (CBMA has since been made permanent, but who could predict what the US government might have done in late 2020?)

“It created a backlog in the warehouse system in the US,” Pisani told Wine-Searcher. “The warehouses were pretty full. Then you have Amazon, going into areas like New Jersey and they’re eating up all the warehouse space. Warehouses that used to be able to rent extra space, you can’t do that anymore.”

Here is a fact I found shocking: Pisani said Amazon pays its warehouse workers better than workers in alcohol warehouses, which naturally makes me worry about the well-being of the latter. It also means that, as in many industries, the pandemic led to warehouse worker shortages.

The first link to be broken in many cases is shipping. Americans have been shopping online like crazy since the pandemic started, so much so that most container ships just want to work the lucrative China-US route. Wine is not the only product that suddenly found it difficult to get a ride from Europe or South America to the US.

“You have a massive backup of containers,” Pisani said. “You have people out there trying to buy every container they can, not caring what the prices are. The steamship lines are actually charging extra just to secure a booking. We’ve had boxes that have sat for months in warehouses in France and not moved. They’ve been picked up at the winery, brought to the port and never moved from there.”

Out of space

Then there are dockworker shortages: “The port of Oakland’s been running 20-25 days behind,” Pisani said. “We have a box that’s been sitting in the port of Oakland since April 27.”

So let’s say you get your crate of wine to the port. You need a drayman, a specialized trucker who delivers containers to and from the port. Generally, you hire a drayman to take your container to a warehouse location where it can be unloaded and sorted for shipping across the country.

Except, of course, there’s a drayman shortage. And when you do find a drayman, “the warehouse doesn’t have room for it”, Pisani said. “You have people storing product in a yard somewhere. People have product stored in multiple warehouses, which is terrible for logistics.”

OK, so your wine gets to a warehouse space, it gets unloaded, and now it’s ready to truck to your city. Guess what? That’s right, trucker shortage.

“The warehouses stopped picking and staging orders because the truckers weren’t shipping,” Pisani said. “If you have an event or something, you have to FedEx the product because you can’t get it out the door.”

Now let’s say you overcome that obstacle and get the wine to the understaffed retail store.

“In the stores, they had to worry about curb services, and worrying about how many people are in the store all the time. That all costs money,” Pisani said. Wine shops may have been loath to pass on those costs during a pandemic, but eventually they will.

MHW has hired extra logistics people to look for warehouse space and make calls to ports to check on containers. These services are getting costly.

“If you look at a standard container from France: standard, non-refrigerated, you’d get 1200 cases in it, you’d be looking at $4000,” Pisani said. “That’s edging up to closer to $5000. Then there’s all these additional charges. You pay double for the drayman. You pay more for the warehouse space. That’s a lot of money that adds up if you’re talking about a $12.99 bottle of wine.”

Pisani says she believes the situation will ease by spring 2022. But unfortunately, the peak season for selling wine is from late October through early December.

“My clients are starting to bring in product earlier than they would,” Pisani said. “Containers they would have brought in in October, they’re bringing in in July. That’s only going to make the warehouse situation worse. A standard product like Tito’s [vodka], they have great sales all through the year. But if you talk about newer products, when people are out buying gifts or going to restaurants more because it’s the holidays, that’s when they try new things. If those little guys can’t get their products on the shelf – not just in the country but on the shelf – they’re going to miss the whole year’s sales.”

So the upshot is, expect to pay more for wine this fall, and if there are wines – or whiskeys – that you really have to have, buy them when you see them, because the next vintage might not arrive on time. There’s one more depressing shipping note, especially for fans of natural wines with no added SO2.

“One of the products that suffers the most in situations like that is beer. Beer is working on a very small margin. And they cannot afford to be sitting in a port,” Pisani said. “It’ll go bad. The same thing with a lot of wine.”