Archive For The “News” Category
In an article published in the Journal of Commerce (JOC), Mark Szakonyi goes in depth regarding the options that carriers are considering to face drought-driven restrictions imposed in the Panama Canal. Unless unexpected rainfall were to hit the country, transit restrictions are expected to be in place for the next few years.
“Restrictions, which effectively reduce the maximum stowage capacity of larger vessels and limit the overall number of transits, will likely force carriers to alter networks as they try to push higher costs onto shippers,” says Szakonyi.
Panama Canal authorities have announced that the soonest relief to restrictions- which were imposed in July- could come in 2028.
More concerning is the fact that the easing of restrictions would come when the government of Panama leaves aside years of underinvestment and supports $2 billion in investment to build a new reservoir and more pipelines.
“We greatly appreciate the current weather conditions are a factor,” Ocean Network Express (ONE) CEO, Jeremy Nixon wrote in a letter to Panamanian President Laurentino Cortizo Cohen on Oct. 30. “However, we also understand that no significant projects have gone ahead in Panama to increase the freshwater supply to the locks from other catchment areas.”
Draft limits are reducing the capacity of container ships transiting the canal by approximately 20% across all size classes, says Michael Kristiansen, president of Panama-based consultancy CK Americas.
Larger vessels lose approximately 350 TEUs of capacity for each foot of draft lost; with the draft now limited to 44 feet, down from the designed 50 feet, larger ships must give up about 2,100 TEUs of otherwise usable space.
Some carriers have been forced to offload cargo at terminals at either end of the canal, and then rail those boxes across the isthmus. Container lines have been generally spared from long transit delays, however, thanks to pre-scheduled transit appointments.
Carriers considering options
In Nixon’s letter to President Cortizo he explains that upon growing concerns and the lack of service reliability, ONE is considering other routings via the Suez Canal.
This month, Zim Integrated Shipping Services added a call at the Port of Lázaro Cardenas in Mexico to allow Asian imports to arrive in the Midwest.
ONE, similar to other container lines, invested heavily in larger vessels that were able to move through a larger set of locks, which was completed in 2016 at a cost of $5.25 billion.
Ports along the US East and Gulf coasts similarly invested billions of dollars to be able to handle the larger ships, which has helped fuel a two-decade shift of trans-Pacific imports away from the West Coast.
The lack of scheduled service is squeezing seasonal refrigerated (reefer) operators that charter vessels on an ad-hoc basis and must wait in line similar to the bulk carriers and tankers.
Nixon also raised concern about the reduction in daily transit slots for neo-Panamax vessels- those with capacities ranging from 10,000 to 15,000 TEUs that can transit the canal thanks to the new set of locks that opened in 2016- with the number falling to five starting Jan. 1 compared with the 10 available just three months ago.
Political solutions
Panamanian politicians seem more focused on copper than water, amid the largest protests in three decades over mining concessions. Rising political instability and social unrest frame the upcoming national election in May.
Ultimately, the government must either expand the canal authority’s geographic remit so it can push through water management projects or limit current restrictions that prevent it from building new reservoirs.
Canal officials hope construction contracts currently in the offing can be awarded by the end of 2024, with work completed in 2028.
Depending on the severity of this drought, and potentially others to come, carriers may do as ONE warned: shift service away from the canal.
Deploying smaller vessels is another option.
Carriers could also adjust services to send more cargo from South Asia through the Suez Canal, though it would add distance for some origins, Kristiansen said. The US East Coast is approximately 2,200 nautical miles farther from Shanghai via the Suez Canal than via a Panama Canal routing.
Yet another option would be for carriers to change some Asia–North America services to so-called around-the-world strings, transiting the Suez on the backhaul from North America to Asia, Kristiansen says.
That would require an additional deployment of ships in the string to maintain weekly service frequency. Although less than ideal, it would slightly mitigate industry-wide overcapacity.
INDIANAPOLIS, IN – Greenberg Fruit Company, a produce distribution company headquartered in Omaha, Nebraska, joined FreshEdge, a family of best-in-class fresh food distribution companies backed by Wind Point Partners.
Since 1936, Greenberg Fruit Company has proudly been serving customers throughout Nebraska and Western Iowa, distributing superior-quality fruits and vegetables, including an array of fresh-cut offerings under its processing brand, Professor Fresh.
The acquisition of Greenberg Fruit Company strengthens FreshEdge’s pursuit of becoming the preeminent family of best-in-class fresh food companies by expanding its geographic reach, optimizing its supply chain network, and providing additional space and logistical support to better serve its customer base.
FreshEdge now operates more than 1.12 million square feet of warehouse space across 29 facilities with a fleet of 1,041 trucks.
“Greenberg Fruit Company will be an amazing addition to our growing family of customer-obsessed companies,” said Steve Grinstead, CEO of FreshEdge. “We share the same company values centered around quality, service, and making our customers the number one priority.”
“We look forward to working together with the great team at Greenberg Fruit Company to continue to provide unprecedented service to all FreshEdge customers,” said Greg Corsaro, President and COO of FreshEdge.
“We are thrilled to be joining FreshEdge and are looking forward to this new era of growth and success for Greenberg Fruit Company,” said Brent Bielski, COO of Greenberg Fruit Company. “We strongly believe in the power of synergy and are eager to begin working alongside this remarkable family of companies to create new opportunities for our customers.”
About FreshEdge
FreshEdge is headquartered in Indianapolis, IN, and was established in 2019 with the combination of Indianapolis Fruit and Piazza Produce in Indianapolis and Get Fresh Produce in Bartlett, IL. Since then, numerous other best-in-class distribution companies and their respective value-added operations have joined the FreshEdge family, growing it into a super-regional leader in the fresh food industry with a focus on fresh produce and specialty food items. FreshEdge’s footprint spans twenty-two states throughout the Midwest and southeastern United States. Greenberg Fruit Company represents FreshEdge’s fourth acquisition since Wind Point’s initial investment in 2022. Together, Wind Point and FreshEdge intend to continue growing FreshEdge by welcoming more fresh food distribution companies into the group—all focused on high quality produce and specialty food products, along with exceptional service—to create a unique group of complementary entities.
About Wind Point
Wind Point Partners is a Chicago-based private equity investment firm with approximately $6 billion in assets under management. Wind Point focuses on partnering with top-caliber management teams to acquire well-positioned middle market businesses where it can establish a clear path to value creation. The firm targets investments in the consumer products, industrial products, and business services sectors. Wind Point is currently investing out of Wind Point Partners X, a fund that was initiated in 2022.
By Ted Kreis, Northland Potato Growers Association
The fresh growers in the Red River Valley have long been known for their red potatoes. In fact, the valley has long been, and still is, the leader in red potato production in the nation, but the Red River Valley has quietly become one of the biggest yellow potato producers in the nation also.
Consumer preferences have created a gradual but steady increase in yellow potato demand for well over a decade in the United States. Growers have had to adjust what colors they plant to to meet these preferences. Unfortunately yellow demand has come at the expense of other colors including russets, reds and whites.
Fifteen years ago (2008) the Red River Valley only raised about 120,000 hundredweight (cwt) of yellow potatoes, or roughly 3 percent of the fresh crop. This year the valley topped 2 million cwt of yellow potatoes for the first time ever representing about 45 percent of the fresh crop!
Nobody seems to know how long this trend will continue or if it will ever level off or recede. Many have predicted it would slow in previous years, but so far those predictions have all been wrong.
By Isabella Silva, ALC Marcom
A harsh reality of climate and economic twists is unfolding in the heartland of Mexico, where a colorful abundance of strawberries and avocados usually flourish. The country is painted with the struggles of a severe drought, hurricane surprises, and a resilient agricultural community striving to adapt to the shifting circumstances. I had the opportunity to interview Mark Santos, Manager of Santos International and TransKool Solutions, to hear firsthand how the economic climate in Mexico is affecting the year-round supply of produce coming into the United States.
“Mexico as a whole has been struggling with severe drought. Water shortages affected many commodities greatly across the board. The state of Michoacán, where the majority of strawberries and avocados come from, has felt the brunt of this,” stated Santos. “Then comes the irony of Hurricane Otis that went from a Category 1 to a Category 4 hurricane in less than 48 hours.” While the Zamora area, a significant agricultural region, escaped direct impact, other vital areas suffered, leaving a trail of damaged crops and economic uncertainty.
During these climatic challenges, Mexico faces an intriguing economic landscape. Despite the hardships, Santos shares that the peso stands strong against the dollar, maintaining a formidable exchange rate of 17-18 MXN, compared to previous fluctuations of 25 -27 MXN. “A stronger dollar encourages Mexican exports to the United States as Mexican growers strive to recover their investment in dollars. A weaker dollar has had growers questioning whether they should take on additional expenses such as freight and transmit times to get their product to the U.S.” With its predictable payment upon delivery terms, the Mexican market presents a tempting alternative. Adding to the complexities, Santos said, “Mexico is also struggling with labor shortages, forcing the industry to import labor from southern regions to fill the gaps.”
The Pharr International Bridge, a port of entry for the U.S.-Mexico border, reported the lowest crossing number of agricultural loads in the last quarter in comparison to the same time frame in the past five years. Santos gives an example, “we have a customer that would traditionally move about 180 loads of berries in October, and this year moved 110 loads.” However, in the grand scheme of things, every climate has its season, and while challenges persist, there are brighter days ahead. “Mexico continues to see an increase in planted acreage, especially in high-end commodities such as berries and avocados. Geographically, it is still in the best position than any other country to export to the U.S.”
Mark Santos has been a longtime friend with Allen Lund Company and the Lund family. Given the alignment in company culture and shared values with Santos International, the decision to collaborate six years ago was a natural progression. ALC takes pride in the partnership with the Santos family and draws upon their great insight, expertise, and local knowledge in McAllen, Texas, which is essential with Mexico being the United States largest trading partner.
*****
Isabella Silva graduated from St. Edward’s University in 2022 with a BA in Communication and minors in Psychology and Health Communication. She started working at the Allen Lund Company in July 2022 in the Marketing department.
isabella.silva@allenlund.com
Interviewee: Mark Santos, TransKool Solutions
In 2017, Allen Lund Company and Santos International came together and announced a new company, TransKool Solutions. This joint venture delivers top-tier warehousing solutions, specializing in LTL and FTL services, load consolidations, and Customs brokerage.
Peruvian onions imported by the U.S. have increased from 130,807 metric tons in 2018 to 164,734 metric tons in 2022, according to statistics from the USDA.
The total value of U.S. imports of Peruvian onions rose from $52.3 million in 2018 to $67 million in 2022, the USDA said.
The value of U.S. imports of Peruvian onions topped $412.30 per metric ton in 2022, up from $406.50 in 2021 but down from $446 per metric ton in 2020, according to trade numbers from USDA.
Peru accounted for 12% of total U.S. onion imports in 2022, the same share as in 2018.
In 2022, Peru shipped onions to the U.S. in every month but June, according to the USDA. The top shipment months were October through December, accounting for more than half of Peru’s total onion shipments to U.S.
However, Peru shipped a significant volume of onions to the U.S. from September through March.
Chilean blueberries imported by the U.S. totaled 45,982 metric tons in 2022, up from 42,458 metric tons in 2021 and up from 42,608 metric tons in 2020, according to the USDA.
U.S. imports of Chilean blueberries in 2020 were reported from August through April, with peak supplies in January and February.
The value of U.S. imports of Chilean blueberries totaled $4,605 per metric ton in 2022, down slightly from $4,675 per metric ton in 2021 but up from $4,533 per metric ton in 2020.
Chile provided 19% by volume of U.S. imports of fresh blueberries in 2022, down from 20% in 2021 and down from 23% in 2020, according to the USDA.
U.S. imports of Chilean blueberries (metric tons):
- 2018: 62,185 metric tons;
- 2019: 51,701 metric tons;
- 2020: 42,608 metric tons;
- 2021: 42,458 metric tons; and
- 2022: 45,982 metric tons.
Costa Rica is the primary exporter of fresh pineapple in the world, according to the Foreign Trade Promoter of Costa Rica (Procomer). Also, the United States is the main destination for the fruit.
The National Chamber of Pineapple Producers and Exporters (CANAPEP) reports pineapple contributes 1.90% of the country’s GDP, and about 34% of the country’s agricultural exports.
CANAPEP reflects U.S. per capita consumption of pineapple used to be low because most of the fruit that came from Mexico which had quality issues.
When Costa Rica entered the U.S. market with the Golden mb-2 pineapple, it was so well received that today Costa Rica supplies 84% of the fruit.
The United States also receives pineapple from Mexico, Ecuador, Honduras, and Panama.
Costa Rica’s pineapple production level has reached a peak, now producing about 48,000 120,000 acres, generating a volume of more than 160,000 containers per year of fresh pineapple. On a weekly weekly basis, the country averages 2,300 containers being exports to various markets.
Presidential Thanksgiving proclamations and speeches have been popular throughout American history. Within the federal government, the tradition pre-dates the U.S. Constitution adopted in 1789, and was observed by the Continental Congress.
President George Washington issued the first presidential Thanksgiving proclamation but that was not officially observed as a concurrent tradition by every president until Abraham Lincoln proclaimed a national day of Thanksgiving to be observed on Thursday, November 26, 1863.
Before Lincoln, Thanksgiving was generally promoted in government at the state level.
President Franklin Delano Roosevelt officially made the holiday the fourth Thursday in November in 1942.
Frutura of Reedley, CA, a gobal sales and marketing company has announced agreements to acquire two major produce companies – Giddings Fruit and Sun Belle.
Frutura described the planned acquisition as the most the company has made to date.
Giddings Fruit, headquartered in Santiago, Chile, is a global supplier of organic and conventional berries and cherries.
Sun Belle, based by Chicago’s O’Hare Airport, is a year-round marketer of a full line of conventional and organic berries, sold under the Sun Belle and Green Belle brands.
Frutura says it anticipates a smooth integration as Sun Belle and Giddings have enjoyed a deep, decades-long relationship. The companies have worked closely together on distribution, marketing and logistics, with Sun Belle serving as the exclusive sales agent for Giddings’ berries grown in Mexico.
Founder Janice Honigberg will continue as chief executive officer of Sun Belle and founder Julio Giddings will become chair emeritus of Giddings Fruit. Both will join Frutura’s board of directors.
What is the largest citrus fruit?
One might think the Sumo citrus, as its name suggests. Or could it be the pink, white or ruby red grapefruit?
It’s the pummelo. Here are some fast facts about this super-sized fruit.
Pummelos are:
- Originally from Southeast Asia.
- Harvested in Florida from December to April.
- About the size of a cantaloupe, 5 to 10 inches in diameter and 2 to 5 pounds
- Also called pomelo and Chinese grapefruit
- Fairly round and may have a slight point on one end
- Covered in yellow to green skin that’s slightly bumpy, with flesh that ranges from pink to rose and a thick rind
- Tart and sweeter than grapefruit with hardly any bitterness