Posts Tagged “produce trucking”
For decades, the U.S. produce industry has had the protection of the Perishable Agriculture Commodities Act (PACA) offering protection from unpaid bills and other unscrupulous business dealings. Unfortunately these protections do not extend to produce truckers.
For a long time the Canadian produce industry has wanted something similar to America’s PACA, but resistance has been common from key government leaders.
In a message to the trade last January, the Fresh Produce Alliance (made up of members of the Canadian Produce Marketing Association, the Canadian Horticultural Council and the Fruit and Vegetable Dispute Resolution Corporation) pointed out they were “disillusioned” with a letter from Navdeep Bains, Minister of Innovation, Science and Economic Development and Lawrence MacAulay, Minister of Agriculture and Agri-Food, to the Standing Committee on Agriculture and Agri-Food.
The letter was a response to the committee’s request for an examination of the Fresh Fruit and Vegetable Model Law as a payment protection program for Canada’s fresh produce industry.
“The insolvency frequency of the fresh produce industry does not warrant the right to such an extraordinary remedy, which would have a significant effect on credit cost and availability and shift losses to other creditors,” according to the Bains-MacAulay letter.
The Canadian produce industry has been lobbying for a number of for a PACA, but disappointed with the decision. However, they contend efforts will not cease to convince lawmakers of the need for a PACA-like trust for Canada.
“While consideration was given to Canada’s loss of preferential treatment to the PACA dispute resolution process in the United States, the government does not support the industry’s claim that produce businesses have been substantially impacted by this decision with many companies not being able to afford the PACA double bond and writing off monies owed,” according to the Fresh Produce Alliance letter. Canadian leaders have been asking for a PACA-like payment protection program for more than 30 years, since the PACA was established in the U.S. in 1985. The PACA puts produce sellers first in line among creditors of a bankrupt firm.
The issue has added urgency since 2014, when the U.S. Department of Agriculture revoked the privileged status Canadian sellers had under the PACA, because Canada lacked a similar program. Since then, Canadian firms that want to file a complaint against a PACA licensee have to provide a surety bond before the complaint will be investigated. The bonds are twice the amount of the claim.
A strategy to keep the issue before Parliament continues by The Fresh Produce Alliance.
As part of the strategy, the FPA said a letter is being sent to the key parliamentarians which expresses the industry’s deep disappointment and also identifies areas for continued effort.“We want to reaffirm our commitment to achieving a solution for industry and will continue to keep our members advised as we move forward,” according to the letter, signed by Canadian Horticultural Council Executive Director Rebecca Lee, CPMA President Ron Lemaire, and DRC President and CEO Fred Webber. “CPMA, DRC and CHC will continue to now look at our efforts at making sure our politicians realize there is a public policy value in having farmers protected when they sell fresh fruits and vegetables in the event of a bankruptcy,” Lemaire said.
(I have been advocating for 30 years the U.S. PACA include produce trucking under the protections afforded the produce industry, particularly in a case were there is a claims dispute. However, the produce industry has shown no interest and when necessary has actually opposed it. The USDA also seems to view it as a “hot potato.” — Bill Martin)
Produce trucking can be frustrating this time of year as spring is still a month away (March 20th), rates are down from earlier in the year, and spring vegetable shipments have yet to seasonally take off.
An interesting note is imported truck loads that include everything from Nogales and South Texas, as well as ports on both coasts, there were 7000 fewer truck loads shipped than during the same week in 2017. Part of the explanation is many imported produce items are maturing on a more normal schedule this year, compared to last year when warmer weather resulted in a lot of early crops.
Florida spring shipments won’t hit volume for several weeks, but there are signs of life. The new season for red potatoes out of Southern areas is underway, and we are seeing light but increasing volume with vegetables such as beans and cabbage. Tomatoes (mostly mature greens) are averaging around 750 truck loads weekly, although most loads out of the state involve multiple pick ups. Plant City area strawberries are averaging around 500 truck loads a week.
Florida produce – grossing around $3000 to New York City.
Port of Philadelphia
Chilean fruit arrivals are growing in volume. Early season Chilean grapes haven’t been that impressive quality-wise, but it’s good enough you shouldn’t face claims issues over it. There also is increasing volume with peaches, plums and nectarines. However, the biggest single volume item may be pineapples from Costa Rica and other Central American countries.
Otherwise, it is pretty much slim pickings from the Eastern time zone. You’ve got light volume out of New York state with apples, cabbage and storage onions. Eastern North Carolina is shipping around 250 truck loads of sweet potatoes each week, which is more than double the other leading states of California, Mississippi and Louisiana combined.
Michigan is moving about 150 truck loads of apples weekly, primarily from the Grand Rapids region. Some shippers buy items such as potatoes and onions from Western states, repack them, and then ship it out.
With Rich Macleod’s pending departure from TransFresh Corporation June 30th, he leaves a legacy of being one of the most important individuals making immense contributions to in-transit perishable hauling since refrigerated truck transportation was invented following WWII.
It was 40 years ago that Rich joined TransFresh based in Salinas, CA, a company barely 10 years old focusing on perishables transportation.
Having known Rich much of this time and before that having covered a number of presentations by one of his mentors Dr. Bob Kasmire, Rich has always had a “soft spot” for produce trucking and the drivers of the big rigs delivering fresh fruits and vegetables.
“One thing that is critically important to anyone working in this trade is to respect every single level of those people that are feeding the retail chains and the consumers,” Rich says. “A lot of respect for the drivers comes from hanging out on these docks taking pulp temperatures, or atmosphere readings, or doing these studies on what’s going inside these trucks from a temperature standpoint.”
During this time Rich often spent a lot of time talking with truckers.
“They are a good group of professionals for the most part,” Rich says.
He also believes over the years produce shippers have started showing more respect for the men and women hauling those perishables. He also sees fewer incidents of lumpers at unloading docks “messing” with drivers.
Likewise, he is observing more receivers following the Costco model. In other words, if the truck arrives on time, it will be unloaded on time. By no means does he see a perfect world in this regard as there are still claims and “monkey wrenches” thrown into situations.
“But for the most part there has been a gradual improvement in the attitudes towards the drivers,” Rich states. “I don’t know how you run a business without making sure the transportation piece is being well taken care of.”
Rich adds one doesn’t get to where they are in a career without a number of mentors. A very important influence was Dr. Kasmire. He worked very closely with Dr. Kasmire as a research assistant at the University of California, Davis on transit issues. When Rich left for a career at TransFresh the two continued to working on projects together.
“A number of things in his publications are actually ideas that he and I generated together,” Rich recalls. “That’s why I have a soft spot for transportation. It is clearly generated by what Bob Kasmire taught me and what we’ve done together over the years. It’s really some of his passion coming through in my career.”
Rich still sees opportunities for progress that can be made with equipment and with drivers for the safety of our food. At the same time, it can’t be done by cutting corners.
“The reality is the drivers know when people are cutting corners. They know when they stuff (over load) a trailer there is a risk. They know when the buyer puts things on the truck that’s a risk. These guys know and they keep their mouths shut because that’s where they are on the job. They could actually be efficiency experts,” Rich says.
Meanwhile, nearly 30 years after Rich created the Fresh Produce Mixer & Loading Guide, he still receives probably 100 requests a year for it. The ground breaking in-transit research on berries at TransFresh will continue.
Rich seems very comfortable with the fact Michael Parachini, whose been with TransFresh 27 years, will continue his work. He describes Michael as his “right hand arm” for the past 20-plus years, working with the shipper base, Techrol process and equipment that plays a key in longer shelf life for fruit. He also names Reilly P. Rhodes, who has been with company over 20 years, saying he will have expanded roles that include marketing. Rich says Reilly has been instrumental in developing storage solutions for blueberries.
While retiring as the director of the TransFresh Pallet Division, Rich isn’t one to be complacent in a rocking chair. He will devote more time to helping the family with his aging parents, being more a part of the family grape and wine business, Macleod Family Vineyard in Sonoma County, CA, plus playing music in a local band. Rich also hasn’t ruled out sharing his vast knowledge through consulting.
While Florida leaves a lot to be desired when it comes to produce trucking in the fall, there are citrus loadings and limited amounts of vegetables.
Navel and fallglo tangerine harvets started the third week of September, with decent loading opportunties coming on in late September. This week, the harvest of navels are underway.
This season, the industry should pack about 12 million cartons of red and white grapefruit, down from the 13 million it produced last season.
Citrus shipments Wrap Up
U.S. citrus shipments fell four percent in 2014-15 season.
About 9.02 million tons of citrus were produced this season. The 2014-15 total is also 49 percent lower than the record 17.8 million tons produced in 1997-98.
Florida accounted for 56 percent of all 2014-15 loadings, California 41 percent, while Texas and Arizona amounted to three percent combined.
With about 97 million boxes, Florida’s orange shipments are eight percent lower than in 2013-14. Florida grapefruit shipments amounted to 13 million boxes, down 18percent.
California’s orange volume fell one percent to 49 million boxes. Grapefruit shipments in the state also fell one percent, but lemon loadings rose nine percent, while tangerine and mandarin volume rose nine percent.
Florida Fall Vegetable Shipments
Light Fall Florida Veggie Shipments will be staring in a few weeks, despite rains occurring nearly on a daily basis. Squash and cucumbers get underway from the Immokalee area the second week of November with bell peppers and eggplants starting only a few days later. One major shipper is Oakes Farms Inc.
Eggplant and other veggies get started in late October from the Loxahatchee area. A primary shipper this is J&J Family of Farms Inc.
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Here’s more proof that some basic, fundamental changes are taking place in California regarding produce trucking. The two most cited reasons are excessive regulations – and the drought. This deals with the drought.
Many folks recalled not too many years ago when it was a rite of spring that truck rates would go crazy in California. In particular, the rates would be lowest the first part of the week, but might increase 30 to 50 percent by the end of the week as truck supplies were depleted. While some of the reasoning can be placed on long term negotiated rates (for a year, or at least a shipping season), it is suspected that less production or volume is coming out of California while Mexico and Canada are increasing. (Also, see the interview with Kenny Lund of the Allen Lund Company, from June 4th).
More California crop acreage is being removed from production in 2015, according to the California Department of Agriculture.
At 564,000 acres, fallowing will be up 33% over last year as growers cope with the state’s fourth year of drought, according to the preliminary estimate by University of California, Davis researchers.
They compared this year’s drought effects to years of average water supply. Surface water is even scarcer in 2015 than last year.
Growers are forecast to pump 6.2 million acre-feet of groundwater to partially make up for an 8.7 million shortage. The added pumping is projected to cost $595 million. When pumping costs, job losses, livestock, dairy and other factors are added in, the state’s agricultural industry anticipates drought losses of $2.7 billion.
The estimate pegs direct job losses at 8,560 full- and part-time jobs. But when spillover effects and increased pumping costs are factored in, total losses are closer to 18,600. The loss in irrigated crop revenues statewide for vegetables is estimated at $107.7 million, and for orchard and vines at $82.8 million.
If the California drought continues, the consequences for produce trucking, consumers and agriculture will become even more severe.
Salinas Valley vegetables – grossing about $5100 to Chicago.
San Joaquin Valley fruit and vegetables – grossing about $7800 to New York City.
Kenny Lund doesn’t argue with the American Trucking Associations annual study, American Trucking Trends, which shows independent truckers and leased owner operators making $56,167 on average in 2014, which was 7 percent more income than the previous year. However, the vice president of operations for the Allen Lund Company, a third party logistics provider, says freight rates still aren’t increasing enough and operating costs are high.
For example, gasoline in California is $4 per gallon, while Number 2 diesel is about $3.50 per gallon. Take on excessive government regulations, plus an economy that leaves a lot to be desired, and Lund doesn’t see the freight rates keeping up with other costs.
“Truckers are making more money, but the rates aren’t up as much as expected, and the economy was expected to be much stronger,” Lund says.
He points out produce trucking is still dominated by companies with five trucks or less.
“God bless the owner operators out there. They don’t realize collectively what they do for this country and how important they are,” Lund surmises. “We try to convey that as a company and treat these owner operators with the respect they deserve. They are a critical component in the economic system of the U.S.”
He recently heard someone point out if all access to Los Angeles was cut off, there is only a four-day supply of food available. Lund calls that thought “sobering” and notes people just do not realize what a great transportation system has been built in this country due to all of the small companies working together.
“With the efficient distribution system throughout the U.S., you can pretty much get strawberries anywhere in the U.S. the year around, and this is true with most major commodities,” he says.
ALC Logistics
As for Allen Lund Company, he is particularly excited about a division of the firm, ALC Logistics. He developed the company’s Transportation Management System, building it from the ground up. It is the first one created and provides software solutions ranging from claims management to freight audits, and carrier contracts, among other features.
“It is pretty exciting. We are running about $1.4 billion through the system, working with the companies we have now, and we are just getting started,” Lund says.
As for the trucking industry itself, Lund is very interested in the development of driverless trucks. For example the technology is now available where you can follow someone on I-40 from New Mexico to Arkansas and never touch the steering wheel. He sees this addressing problems associated with hours of service regulations.
“I think we’re only five years or less away from it (driverless trucks),” he notes.
“If you can sell this to the driver by saying you are almost out of hours, then you put it on auto pilot. The driver can then go to sleep while the truck is moving down the road, and have your hours still available when you arrive at destination,” Lund observes. “It makes the single drivers like teams.”
(This is part II of a two-part series. The Allen Lund Company was formed in 1976 by its namesake. I have known Mr. Allen Lund nearly since the founding of the company. His son Kenny Lund joined the company 26 years ago this month. At that time the operation had 32 employees. Today Allen Lund Company has 500 employees, arranges about 250,000 loads a year, of which about 40 percent is with fresh produce. The company has 30 offices nationwide and will soon break the $500 million mark in annual sales. — Bill Martin)
The first 20 years of NAFTA has had a big time impact on the fresh produce industry, and produce trucking.
Americans are now consuming twice the fruit and three times the vegetables from Mexico and Canada as they did before 1994, and it takes refrigerated equipment to deliver it to markets.
Likewise, U.S. growers and shippers more than tripled the amount of produce they export to Mexico during the first 19 years of the North American Free Trade Agreement, according to a recent report from the U.S. Department of Agriculture (USDA).
Part of the increase in Mexico’s produce imports from the U.S. is attributed to the rapid expansion of Mexico’s supermarkets. As of November 2014, H-E-B had 43 stores in five Mexican states, and Wal-Mart had 2,114 stores in Mexico.
The U.S. is now importing more cucumbers and mushrooms from Canada than it exports. Before NAFTA, the U.S. was a net exporter of those commodities to Canada.
“In 2011, Mexico and Canada combined supplied about 13 percent of the fresh or frozen fruit available in the U.S. and 17 percent of the available fresh or frozen vegetables. In 1990, these shares each equaled 6 percent,” according to the USDA’s report.
Details on specific U.S. production and import/export of specific commodities are included in the report. There are also discussions about retaliatory tariffs related to cross-border trucking requirements.
In January HaulProduce.com marks it 4th anniversary. During this month we will have posted on the website 1,000 produce trucking reports and other news items and features.
This sojourn began in September 1974 as I began learning all I could about the produce and trucking industries and combining those two interests with what eventually led to creating the Produce Truckers Network. During its 20-years on the air it was broadcast on over 60 radio stations across the U.S. and Canada, before becoming a part of satellite radio for four years.
The essence of those radio reports continues to be viable to this day, as it re-emerged as HaulProduce.com.
It is very encouraging receiving the regular phone calls and e-mails saying the website is providing informative, useful information, whether it comes from owner operators, small fleet owners, carriers, or third parties.
Ironically, when I entered this industry it was a period leading up t0 the deregulation of the trucking industry. Unfortunately, this “deregulated” industry has to deal with more stifling regulations than ever.
After four decades of relationships established in both the trucking and produce industries, and collecting a wealth of information scattered throughout the internet, providing information you can use in your business continues to be a priority.
A special thank you goes to TransFresh Corp. that provides the Techtrol CO2 process that extends shelf live of berries and other items in-transit, thus reducing the chances for claims or rejected loads at destination.
Another special thank you to truck brokerage Cool Runnings.
I have known Rich Macleod of TransFresh and Fred Plotsky at Cool Runnings for decades and deeply appreciate their sponsorship since day one of this venture. Both companies represent the finest in business ethics and practices.
We are looking forward to more companies are coming aboard in the New Year.
However, without you, our readers and subscribers, none of this would be possible. Thank you so much for your continued support.
As we embark on 2015, this is wishing you a Happy, Healthy and Prosperous New Year filled with safe travels.
— Bill Martin
Produce trucking of Florida citrus has been significantly affected due to what is known as citrus greening. This disease has now shown up in the Lower Rio Grande Valley of Texas, but citrus should not be adversely affected — at least for this season.
While citrus greening is spreading in Texas, but it is not expected to hurt the 2014 orange and grapefruit crops and the loading opportunities for produce haulers. Luckily, the greening hasn’t been in Texas long enough to likely harm fruit this season, or its quality or volume.
So far this season, growers haven’t reported fruit drop or unusually small fruit — two signs of greening.
The orange harvest should begin in late September and grapefruit harvest in mid-October, with both fruits likely to start shipping in volume by late October or early November.
The disease is spread by a mottled brown bug no bigger than a pencil eraser. It arrived in the U.S. via an invasive bug called the Asian Citrus Psyllid, which carries bacteria that are left behind when the psyllid feeds on a citrus tree’s leaves. The tree continues to produce usable fruit, but eventually disease clogs the vascular system. Fruit falls, and the tree slowly dies.
The presence of greening also isn’t expected to limit shipments of Texas citrus to California, other U.S. states or even foreign markets. As long as fruit is shipped without stems or leaves, it is not at risk for spreading greening,
Citrus greening has spread in three Texas counties where oranges and red grapefruit are grown, establishing a “stronghold” in commercial groves and residential trees. There were 430 infected trees in commercial groves – including more than 50 in one block alone – and 207 infected trees in residential areas. Hidalgo, Cameron and Harris counties are under quarantine because of citrus greening, also known as huanglongbing or HLB.
The Texas Department of Agriculture is requiring all citrus trees in a 10-county area to be produced in an enclosed certified structure, to help keep the disease from infecting nurseries,
“The question weighing heavily on the minds of growers and many others in South Texas is whether Texas can avoid a catastrophic situation for our citrus industry, which wasn’t the case for our eastern neighbors in Florida,” said Ray Prewett, president of Texas Citrus Mutual, in a press release.
Mexican fruits and vegetables crossing into South Texas – grossing about $2800 Chicago.