After months of rumors, Chiquita Brands International confirmed Wednesday that it is moving its cargo business back to Gulfport, Mississippi, a symbolic blow and an economic setback for New Orleans only two years after the company’s much-heralded return to the city.
Chiquita, one of the world’s largest banana and fruit shippers, called New Orleans home for more than seven decades before leaving for the Port of Gulfport in the 1970s.
Local maritime officials and state leaders blamed Chiquita’s about-face on the company’s new owners, who took over the business not long after it returned to Louisiana.
“Suddenly on the scene you have a brand new management team that has a different strategic vision,” said Don Pierson, the Louisiana Economic Development secretary. “A number of — in fact, almost 100 percent — of the individuals who were involved in the decision-making process and negotiations with us were no longer with the company.”
Gary LaGrange, president and CEO of the Port of New Orleans, offered the same diagnosis: “two different management systems from two different companies.”
Chiquita’s lease in Gulfport is for 40 years, according to Gulfport officials, who expect to begin receiving Chiquita containers by mid-July, with the first vessel set to arrive in August.
“We are pleased to return our port operations to Gulfport, where our Chiquita ripening and distribution facilities are located,” Chiquita President and CEO Andrew Biles said in a statement Wednesday. “We believe that Gulfport is optimally situated to service our customers most efficiently.”
As The New Orleans Advocate has reported, local port leaders and state officials began scrambling in May to try to avert Chiquita’s departure. But the company did not make “any formal outreach in terms of a negotiation,” Pierson said.
The company’s exit could cost upward of 350 jobs and hundreds of millions of dollars of projected economic activity once expected to flow through the local port over the next decade, according to a 2014 LSU economic impact study.
The Port of New Orleans has enjoyed a boost from Chiquita’s presence: It handled a record amount of container cargo during the year ending in September 2015 — more than a half-million 20-foot containers, up more than 13 percent from the year earlier.
In 2015, nearly 244,700 tons of bananas came through the port, representing 2.5 percent of total general cargo tonnage, the port said.
Chiquita’s return meant New Orleans was back in a trade that it used to dominate. The city was once home to the nation’s biggest banana importer, 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.
Starting in 1910, Samuel Zemurray, a Russian immigrant known as “the Banana Man,” began building Cuyamel Fruit Co., which he sold to United Fruit in 1930. Zemurray later orchestrated a takeover of the bigger company. He served at its helm for more than a decade and moved its headquarters from New Jersey to New Orleans.
When Chiquita unveiled plans to resume its cargo business in New Orleans in 2014, the company was on the cusp of merging with the Irish fruit company Fyffes. That deal fell through, but the company was eventually acquired by Brazilian orange-juice maker Cutrale Group and Safra Group.
Then last year, Chiquita decided against moving its banana ripening facilities from Gulfport to New Orleans, which was part of the original plan. The company cited congestion in New Orleans.
Though it’s a smaller piece of Chiquita’s bottom line than the cargo operations, the loss of the ripening business was a signal that the company’s relationship with the port had become strained.
“We were in constant dialogue through the Port of New Orleans and directly with Cutrale-Safra, offering to meet with them to work on a resolution of any issues that they had, but they were not forthcoming in response to our outreach,” Pierson said.
To land the company in 2014, the state offered Chiquita a performance-based deal, promising $11.3 million to help cover its costs. The money was to be paid over a decade and tied to the number of container units moved. So far, the state has issued one payment of about $817,000. That was in exchange for Chiquita shipping 48,918 cargo containers in and out of the port during the 12-month period that ended last September.
The state also agreed to put up $2.2 million for a port-owned distribution and ripening facility that would be leased to Chiquita, but that incentive came off the table after the company decided to keep its ripening operations in Gulfport.
Of the $2 million promised by the port for related infrastructure upgrades and improvements to a freight warehouse, about half got spent, officials said, although the same facilities could still be put to use by other companies.