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Moving wine from the port of origin to final destination has always required great care and attention, and a logistics provider that knows how to effectively manage the process. With the global pandemic interrupting supply chains, port congestion issues growing, and a persistent ocean container shortage underway, the delicate orchestration of wine deliveries to customers worldwide has become more complicated than ever.
Despite these complications, demand for wines and spirits hasn’t changed. “Wine logistics is a year-round business across all climate zones,” says Yvonne Mayer, DB Schenker’s Team Leader for Ocean Beverages. “Wine is harvested all year long.”
As they make their way around the world, these beverages require special logistics attention and handling. By its nature, wine is especially susceptible to temperature changes. When exposed to extremely high temperatures, for instance, a bottle of wine’s oxidation may be negatively impacted and its cork could dry out.
With these and other intricacies in mind, DB Schenker generally transports the beverages on direct routes to avoid transshipments and waiting times in ports. “We pay attention to the special stowage position on ships,” says Mayer. “Wine cannot tolerate heat sources nearby. So, we tell the shipping company where we would like to have it stowed.”
Security, Trust, Experience
Disruptions in the global supply chain have forced U.S. wine importers to delay shipments of new vintages because containers are not available, the Washington Post reports. “The coronavirus has hit shipping companies and dock workers hard, creating backlogs at ports around the world,” it continues. “The Ever Given’s six-day fiasco in the Suez Canal last month may not have disrupted wine shipping routes, but its ripple effects will affect the availability of ships and containers for all products for weeks.”
As the world recovers from the pandemic, high shipping demand from Asia is impacting U.S. wine importers’ ability to secure ships and containers. “And ships that do arrive here often have to wait outside ports to be unloaded, resulting in higher costs for importers,” the publication adds.
A leading provider of wine logistics services, DB Schenker imports 1,200 TEU (Twenty-foot Equivalent Unit) containers per year by ocean. Wholesalers and retailers, medium-sized catering businesses, contract bottlers, and wine shops – from the convenience store around the corner to the high-priced luxury boutique – import the goods from Australia and New Zealand, America and South Africa. Wines from Europe, on the other hand, reach the customer by land.
Once in Europe, DB Schenker uses all modes of transport to deliver the wine to its final destination. The role of rail and inland waterways is also growing. “With wine, the sustainability of the transport chain is becoming increasingly important,” Mayer says. “This is also a very discreet business and thrives on intense client loyalty. Security, trust, and experience mean a lot in wine logistics.”
Wine Tariffs are Paused for Four Months
In March, the Biden administration paused the tariffs on most French, Spanish, English, and German wines, bringing economic relief to European winemakers, American merchants, and wine consumers, for at least four months.
The suspension is intended to ratchet down tensions as the U.S. and European Union negotiate a solution to a long fight over government aid to airplane manufacturers, Wine Spectator reports. (In 2019, when the WTO ruled that the EU’s subsidies for Airbus’ development of new planes provided an unfair advantage over Boeing, the U.S. administration retaliated by placing tariffs on wine.)
The original U.S. tariffs of 25% applied specifically (and more than somewhat arbitrarily) to wines from France, Spain, Germany, and the UK (all guilty of the subsidies) under 14% alcohol, according to Robb Report. The U.S. Wine Trade Alliance says the impacts were significant: U.S. imports of wines from the four countries dropped by nearly 54% during the first five months of 2020 (compared to the same period in 2019).
In many cases, the producers themselves shouldered the costs of these new tariffs, which are now officially on pause for at least four months. “The fact that wine prices didn’t soar in the past year is a testament to the pain European producers and US importers and distributors have absorbed—all at a time when the pandemic has prompted many wine drinkers to trade down on their price points,” Robb Report adds. “They have simply eaten a large share of the cost, to avoid passing it on to the end consumer.”
The pause halts the tariffs while the Biden administration negotiates with its European counterparts on a final agreement to end the fight. “This is absolutely thrilling news,” the U.S. Wine Trade Alliance (USWTA) told the publication. “Suspending these tariffs will bring tremendous relief to millions of small businesses around the country.”
The financial terms of the settlement remain unclear, but for now at least, “importers and wine consumers can breathe a little easier,” Wine Spectator notes.
Mayer concludes, “We share your passion for fine beverages. Which is why we offer temperature-controlled storage and delivery, secure rack and bulk storage, case and bottle picking, tracking and tracing, and delivery of samples or small orders. We also make sure you never have to worry about customs documents, certificates, and labeling. In short, DB Schenker has a complete solution for vineyards and wine distributors.”