New Orleans: Six months later, things are looking up
New Orleans: Six months later, things are looking up
"It's getting better every day," said Nick Cusimano of Cusimano Produce Co. Inc. in New Orleans. Last week we did better than the week before, and weve got two more customers opening up today.
Six months after Hurricane Katrina devastated New Orleans and its produce industry, both the city and the industry are coming back. Those small local grocery stores had been closed since the storm, but their reopening means a bit more business for local produce suppliers.
It is definitely a tale of two cities, said Rick Ebel of Fred C. Ebel & Co. Inc., whose business is located in Jefferson Parish on the side of the levee that held, while his home is in Orleans Parish on the side of the levee that was breached. Id say 95 percent of the people and the businesses in Jefferson Parish have come back. Orleans Parish is a different story.
Mr. Ebel said that his home on Napoleon Avenue is on high ground, so flooding mostly involved his basement. But just two or three blocks away, they had water up to the second story. A lot of those houses are just lost and are going to be bulldozed out of there.
The fact that that hasnt happened yet distresses Mr. Ebel, who is clearly perturbed at the rate at which New Orleans is rebuilding. He said that many neighborhoods are still vacant because local, federal and state officials havent decided yet what can be rebuilt and what cannot.
Of course, the rate of speed at which people are coming back to the city is the determining factor that will allow the produce industry to return to normal.
I dont know if it ever will [return to normal], said Mr. Ebel. New Orleans is coming back, but it is never going to be as big as it once was. And I cant even say it is going to be better. New Orleans is old, but a lot of the old was very good. People who are rebuilding are upgrading, but that doesnt mean it is going to necessarily be better.
For the Fred C. Ebel firm, business is close to what it was pre-Katrina because I do a lot of regional business in Baton Rouge [LA] and Biloxi [MS] and other places, not just New Orleans. The business Ive lost in New Orleans has been replaced by companies who have gotten smaller and can no longer order direct mixed loads from California. Now they are buying one or two pallets from me.
But other New Orleans wholesale produce firms that rely primarily on New Orleans residents for their business have seen a major downturn.
Jay Joyce, manager of Bubbas Produce Co. Inc., said, We are at about 50 to 55 percent of what we were before. But he added that he is actually ahead of the target he set one week after the storm hit. On September 6, we developed a new business plan and we are actually ahead of schedule.
Within 90 days, Mr. Joyce expected the firm to be at 40 percent of its original business and reach the 50 percent mark at six months. Both those targets were reached, but from here on out, he expects that growth will come slower. At 18 months [after the storm], we expect to hit 75 percent, but it will take five or six years to come all the way back.
Mr. Cusimano said that his business is down about 45 percent and he doesnt know how long it will take to get back to normal. Once the [Federal Emergency Management Agency] people leave the hotels and the convention center, we should see some more business, he said.
Of course, the big problem is that New Orleans has only half the population that it had seven months ago. While the tourist trade, the ports and the convention business has a chance to get back to pre-Katrina levels, the citys population probably never will. That means hospital, school and small grocery store business will never be the same.
Mr. Cusimano said that his biggest problem currently is getting enough labor. It is difficult to get people to work for you because they have no place to live. I have been on the phone with FEMA for six months trying to get them to drop some trailers here so my employees would have a place to live. They are not going to do it. They say orders are too backed up.
Mr. Joyce of Bubbas has also had a problem securing labor. Im three people short right now. I hired seven people yesterday and none of them showed up. They just wanted to list something on their [unemployment] application so they could continue getting money from FEMA and unemployment insurance.
With federal aid running out, however, the produce firms are expecting the workers to return.
Bubbas is operating with 38 percent of the labor force it had before Katrina. Mr. Cusimano has refurbished about 50 percent of its facility and will steadily rebuild the rest as business improves.
Another issue with which produce firms are dealing has to do with the persistence of their suppliers. Mr. Ebel, who vented his frustration at suppliers in The Produce News a few months ago, said that the situation has improved, but he is still generally disappointed with the supplier community. He believes that circumstances should play a role when dealing with a company that owes you money.
Over his 30-year career in the produce business, he said that he has been swindled out of money by crooks and has also had honest people go out of business owing him money. Retelling a couple of those stories, he said that it is just plain wrong to go after the local grocers estate when the mans small grocery store failed because he had a heart attack.
On the other hand, Mr. Ebel said that a local banana company owner filed bankruptcy and skipped town with a personal fortune even though he left owing money to many different produce firms. Those two circumstances warranted different responses from him as the creditor and he dealt with them differently.
But the suppliers, especially those in California, want everything they can get. And they dont give a damn about your problems. To them, a dollar is a dollar, and it doesnt matter why you owe them money, he said.
Mr. Cusimano, who said that he was the last New Orleans wholesaler to reopen after being out of business for three months, has had a fairly good experience with his suppliers. I had to pay all the bills even though some of my customers were flooded out and never paid me, but most of [the suppliers] worked with me. I only had one guy file a PACA claim, and thats only because he didnt try to find me. I paid all of my bills.
All three wholesalers interviewed said that communication is still a problem. Cusimano Produce had to have new phone service installed, which involved new phone numbers because the local phone company lost all of its switching equipment in the flooding.
Mr. Ebel said that his area still has no phone service and everyone has to use cell phones. At 5 oclock in the afternoon, it is almost impossible to get service because everyone is using their cell phones on the way home from work, he quipped.
Six months after Hurricane Katrina devastated New Orleans and its produce industry, both the city and the industry are coming back. Those small local grocery stores had been closed since the storm, but their reopening means a bit more business for local produce suppliers.
It is definitely a tale of two cities, said Rick Ebel of Fred C. Ebel & Co. Inc., whose business is located in Jefferson Parish on the side of the levee that held, while his home is in Orleans Parish on the side of the levee that was breached. Id say 95 percent of the people and the businesses in Jefferson Parish have come back. Orleans Parish is a different story.
Mr. Ebel said that his home on Napoleon Avenue is on high ground, so flooding mostly involved his basement. But just two or three blocks away, they had water up to the second story. A lot of those houses are just lost and are going to be bulldozed out of there.
The fact that that hasnt happened yet distresses Mr. Ebel, who is clearly perturbed at the rate at which New Orleans is rebuilding. He said that many neighborhoods are still vacant because local, federal and state officials havent decided yet what can be rebuilt and what cannot.
Of course, the rate of speed at which people are coming back to the city is the determining factor that will allow the produce industry to return to normal.
I dont know if it ever will [return to normal], said Mr. Ebel. New Orleans is coming back, but it is never going to be as big as it once was. And I cant even say it is going to be better. New Orleans is old, but a lot of the old was very good. People who are rebuilding are upgrading, but that doesnt mean it is going to necessarily be better.
For the Fred C. Ebel firm, business is close to what it was pre-Katrina because I do a lot of regional business in Baton Rouge [LA] and Biloxi [MS] and other places, not just New Orleans. The business Ive lost in New Orleans has been replaced by companies who have gotten smaller and can no longer order direct mixed loads from California. Now they are buying one or two pallets from me.
But other New Orleans wholesale produce firms that rely primarily on New Orleans residents for their business have seen a major downturn.
Jay Joyce, manager of Bubbas Produce Co. Inc., said, We are at about 50 to 55 percent of what we were before. But he added that he is actually ahead of the target he set one week after the storm hit. On September 6, we developed a new business plan and we are actually ahead of schedule.
Within 90 days, Mr. Joyce expected the firm to be at 40 percent of its original business and reach the 50 percent mark at six months. Both those targets were reached, but from here on out, he expects that growth will come slower. At 18 months [after the storm], we expect to hit 75 percent, but it will take five or six years to come all the way back.
Mr. Cusimano said that his business is down about 45 percent and he doesnt know how long it will take to get back to normal. Once the [Federal Emergency Management Agency] people leave the hotels and the convention center, we should see some more business, he said.
Of course, the big problem is that New Orleans has only half the population that it had seven months ago. While the tourist trade, the ports and the convention business has a chance to get back to pre-Katrina levels, the citys population probably never will. That means hospital, school and small grocery store business will never be the same.
Mr. Cusimano said that his biggest problem currently is getting enough labor. It is difficult to get people to work for you because they have no place to live. I have been on the phone with FEMA for six months trying to get them to drop some trailers here so my employees would have a place to live. They are not going to do it. They say orders are too backed up.
Mr. Joyce of Bubbas has also had a problem securing labor. Im three people short right now. I hired seven people yesterday and none of them showed up. They just wanted to list something on their [unemployment] application so they could continue getting money from FEMA and unemployment insurance.
With federal aid running out, however, the produce firms are expecting the workers to return.
Bubbas is operating with 38 percent of the labor force it had before Katrina. Mr. Cusimano has refurbished about 50 percent of its facility and will steadily rebuild the rest as business improves.
Another issue with which produce firms are dealing has to do with the persistence of their suppliers. Mr. Ebel, who vented his frustration at suppliers in The Produce News a few months ago, said that the situation has improved, but he is still generally disappointed with the supplier community. He believes that circumstances should play a role when dealing with a company that owes you money.
Over his 30-year career in the produce business, he said that he has been swindled out of money by crooks and has also had honest people go out of business owing him money. Retelling a couple of those stories, he said that it is just plain wrong to go after the local grocers estate when the mans small grocery store failed because he had a heart attack.
On the other hand, Mr. Ebel said that a local banana company owner filed bankruptcy and skipped town with a personal fortune even though he left owing money to many different produce firms. Those two circumstances warranted different responses from him as the creditor and he dealt with them differently.
But the suppliers, especially those in California, want everything they can get. And they dont give a damn about your problems. To them, a dollar is a dollar, and it doesnt matter why you owe them money, he said.
Mr. Cusimano, who said that he was the last New Orleans wholesaler to reopen after being out of business for three months, has had a fairly good experience with his suppliers. I had to pay all the bills even though some of my customers were flooded out and never paid me, but most of [the suppliers] worked with me. I only had one guy file a PACA claim, and thats only because he didnt try to find me. I paid all of my bills.
All three wholesalers interviewed said that communication is still a problem. Cusimano Produce had to have new phone service installed, which involved new phone numbers because the local phone company lost all of its switching equipment in the flooding.
Mr. Ebel said that his area still has no phone service and everyone has to use cell phones. At 5 oclock in the afternoon, it is almost impossible to get service because everyone is using their cell phones on the way home from work, he quipped.
