Port of New Orleans to Play Second Banana Again? Chiquita Considering Leaving
Two years after a celebrated homecoming, Chiquita Brands International is considering moving its cargo business elsewhere. This left Port of New Orleans, Louisiana, officials scrambling May 11 to try to keep the company from again leaving the city that was once the country’s top banana importer.
The departure of Chiquita, one of the world’s largest banana and fruit shippers, could cost upward of 350 jobs and hundreds of millions of dollars of projected economic activity that were expected to flow through the local port over the next decade.
Port leaders and state officials were working to get a better handle on whether Chiquita is indeed planning to leave and, if so, whether it could be talked into changing its mind.
Still, the rumor had circulated “around the docks” that the North Carolina-based company is on its way out, said Gary LaGrange the port's president and CEO. When he first heard the news, he said, he felt “dismayed.”
Though word spread widely among maritime officials and local business leaders, many declined comment, saying they were still trying to assess whether the rumored departure is a done deal.
In a statement May 11, the Port of New Orleans said its board “is aware of Chiquita’s potential interest in pursuing other strategic shipping options” but had received no official notice from the company.
Louisiana Economic Development also has received no official notification that Chiquita will leave the New Orleans market, LED Secretary Don Pierson said.
A Chiquita spokesman did not respond to a message seeking comment.
LaGrange said he received word late May 11 — he wouldn’t say from whom — that Chiquita could be leaving but that he had been unable to get any company officials on the phone.
Still, he said, he was taking seriously what would be a major blow after local officials spent nearly a decade working to recruit the business back to New Orleans, which it called home for more than seven decades before leaving for Gulfport, Mississippi, in the 1970s.
“We’ve made a number of phone calls,” LaGrange said. “None of them seemed to be turning up anything, but that doesn’t mean it won’t turn up something at some point.”
A 2014 Louisiana State University economic impact study forecast that the company’s return to New Orleans would result in about 270 to 350 new permanent jobs in the city and a total economic impact of $373 million to $485 million over 10 years.
Chiquita had planned to move about 60,000 to 78,000 20-foot-equivalent units — a measure of cargo capacity for containerized shipping known as TEUs — through the port each year, representing almost a 15% boost in total container volume.
The port already has seen Chiquita’s impact to its bottom line: It handled a record amount of container cargo in the year ending in September — more than 500,000 TEUs, up more than 13% from the year earlier.
In 2015, nearly 244,700 tons of bananas were shipped through the port, representing 2.5% of its total general cargo tonnage, the port said.
New Orleans’ ties to the banana trade go back more than a century. The city once was the nation’s biggest banana importer, home to Chiquita’s predecessor, United Fruit Co., and its main rival, Standard Fruit, which was founded in 1899 in Plaquemines Parish and later become the Dole Food Co.
Beginning in 1910, Samuel “the Banana Man” Zemurray, a Russian immigrant, started building Cuyamel Fruit Co., which he sold to United Fruit in 1930. Zemurray later arranged a takeover of the bigger company. He served at its helm for more than a decade and moved its Southern regional headquarters from New Jersey to New Orleans.
Still, despite the rich history, some signs that Chiquita’s relationship with the local port was strained emerged not long after the company moved its cargo business back to New Orleans in 2014.
When Chiquita first unveiled its planned move, the company was on the verge of merging with Irish fruit company Fyffes. That deal fell through, however; instead, it was acquired by Brazilian companies Cutrale Group and Safra Group.
Last year, Chiquita reversed course and decided against moving its banana ripening business from Gulfport to New Orleans, which was part of the original deal, citing congestion at the local port. At the time, port officials downplayed the setback, saying the ripening business was a small slice of Chiquita’s operations.
Hoping to foster a relationship, port leaders offered to visit the new owners but never got much response, and LaGrange said port leaders “never really developed a rapport with the Brazilian owners that we would’ve liked to have."
“Perhaps that should’ve been somewhat of a red flag, if any red flag is out there,” he said.
To land the project, the state offered Chiquita a performance-based deal that provided it with $11.3 million to help cover its business costs. The money was to be paid over a decade and tied to the number of container units moved.
The state also put up $2.2 million to invest in a port-owned distribution and ripening facility that would be leased to Chiquita. Though the ripening business stayed put in Gulfport, LaGrange said about half of that money was spent.
The port offered $2 million for infrastructure upgrades and rehabilitation work at a freight warehouse, but that money has not been used.
While he awaits official word on Chiquita’s plans, LaGrange plans “to do everything we can to continue laying out the red carpet and to try to do everything we can — short of breaking our back bending over backwards — to keep them here.”
“We’d always held our commitment and kept up with our end of the deal,” he added.
Asked about the impact of the company’s departure, LaGrange said the port likely would miss its cargo projections for the next few years.
“There are others out there that could fill that gap,” he said, “but to say that they would do it, I’d rather bet on a bird in the hand.”
