Archive For The “News” Category
By Nora Trueblood
Before diving into this very tenuous subject of immigration, I wanted to share some history to bring us to 2023.
The United States has always been considered the great melting pot, welcoming immigrants from all over the world. From the late 1800s until 1965, immigration was just a matter of something we always had, accepted, and were proud of. We welcomed those from all points in Europe and Russia and then more and more from Asia and Latin America. The early immigrants were attracted by jobs in building and manufacturing industries, and as time went on the needs in agriculture became more obvious for immigrant workers.
The U.S. had allowed immigrants at a large pace, admitting an average of 250,000 immigrants a year in the 1950s, and 330,000 in the 1960s.
Beginning in the early 1960s, immigration became more and more of a talking point, and the idea of establishing a policy to monitor and control entry to the U.S. was on the minds of both sides of the aisle – both in Congress and with the Senate. Quotas that had been established based on census information since the 1920s were out of date, and those quotas were challenged as to their fairness. John F. Kennedy took up immigration reform prior to his assassination.
The Immigration and Naturalization Act of 1965
Considered the first legislation of its kind passed after Kennedy’s death, with support and passage by Congress and in the Senate. However, the water-downed version of the legislation was thought to have very little real consequence in immigration reform. In the three decades since its passage, it is estimated that over 18 million legal immigrants entered the U.S., with the highest number from Mexico. The roots of this legislation remain in effect.
The Refugee Act of 1980
This legislation’s focus was on raising the annual admittance of refugees to the U.S. from 17,400 to 50,000. It also created a better process to review and adjust to the huge influx of refugees from war-torn countries where individuals needed to show a “well-founded fear of persecution” if they stayed in their home country. It also provided assistance to immigrants to achieve financial self-sufficiency. This legislation was passed unanimously by the Senate and was signed into law by President Jimmy Carter. Parts of this legislation remain in effect.
The Immigration Reform and Control Act of 1986
The intention was to create a better way of enforcing immigration and the first amnesty programs, creating more chances for legal immigration. It also made it illegal for employers to knowingly hire or recruit illegal immigrants. This was passed and signed into law by President Ronald Reagan. The effect was specific to a new visa process to allow immigrants to work temporarily in mostly agricultural settings, with some non-agricultural visas extended as well. This Act remains in effect.
The 1990 Immigration Act
This legislation amended the Immigration and Naturalization Act of 1965, by raising the total level of immigration. Reportedly 20 million immigrants were permitted over the two decades since its passage to enter the U.S. Additionally, entrants could stay in the U.S. until situations in their home countries improved. A new area addressed in this Act was that employers could contract with foreign laborers to come to the U.S. and pay for their passage in exchange for the worker’s wages (up to one year). What resonates with me specifically about this legislation is the fact that it was introduced by (D) Ted Kennedy and signed into law by (R) President George Herbert Bush. It seems like the last time a bipartisan piece of immigration reform was passed.
There was additional reform passed in 1996, and then after 9/11, the Homeland Security Act of 2002 took over much of the immigration enforcement.
President Biden is trying to push through more immigration reform, however the Republicans currently control the House and the Democrats the Senate. And the divides in this country have never seemed so wide.
Our agricultural businesses need seasonal workers as do other non-agricultural businesses like the hospitality/hotel industry. They rely on immigrants (legal and other) to keep their businesses afloat. I have read and heard the statement “no one wants these low-paying hard-working jobs.” I always thought it would be interesting to require high school students in an agricultural region/state to work in the fields for one week. While I have not done so myself, I understand working in the fields, just as working as a housekeeper at a hotel, is very hard work. So, we Americans won’t fill these jobs? That is another topic altogether to think about.
How do we get our Congress and Senate to work together to bring about humane and fair immigration reform? Where those in the U.S. who are here illegally, but are working and paying taxes have a road to citizenship. Where the Dreamers that are here because their parents wanted a better life for them, may stay and become legal citizens. And the flip side, how do we remove the immigrants that are criminals, prevent entry to those with records of violence and gang affiliations, those that are moving fentanyl through our schools and communities, and those who do not work and expect our government to take care of them?
I do not have answers to all of these questions, but I do know that the transportation and produce industries employ a lot of very smart people. We need to speak up, get involved and be the conduits of change. Let’s have more conversations.
Mexico exports nearly one-half of the world’s avocado exports, amounting to a record of $3.495 billion in 2022. More and more in these exports are going to the U.S. and less in the rest of the world, according to El Economista.
Of all overseas shipments of Mexican avocados in the past year, 86.1 percent went to the U.S. market, in value terms, a share that exceeded the previous all-time high of 80.2 percent in 2014.
The growing avocado exports from Mexico are based on purchases by American consumers, but at the same time this explains the decreasing geographical diversification of Mexican external sales of this fruit.
Of all world avocado exports in the past year, Mexico had a 47.5 percent share in 2022, with sales of $3.008 billion to the U.S.
The market value of the other destinations for avocado exporters from Mexico is substantially lower: Canada ($287 million), Japan ($87 million), Spain ($41 million), El Salvador ($26 million), Honduras ($11 million), and the rest of the nations reach less than $10 million each.
The U.S. began the gradual opening of its market in 1997, after having applied an embargo on Mexican avocados for 83 years. The last stage occurred on January 31, 2007, when it allowed imports to California,
In 2003, the U.S. only represented 30.2 percent of Mexican avocado exports. Then sales were diversified to destinations such as Japan (20.5 percent), France (14.9 percent) and Canada (9.7 percent).
The USDA reports that raspberry retail per capita consumption rose from 0.2 pounds in 2010 to 0.8 pounds in 2021.
The total domestic and imported raspberry supply increased from just 111 million pounds in 2010 to 352 million pounds in 2021.
The share of supply provided by imports also has increased sharply in the past decade. Imports only accounted for 29% of total supply in 2010 but increased to 68% in 2021, according to the USDA.
California was the only source of domestic raspberry truck shipments reported by the USDA. California raspberry shipments are most active from May through October.
The USDA reported raspberry imports in 2022 from Canada, Guatemala and Mexico — with Mexico accounting for more than 99% of total imports.
Percent of raspberries accounted by imports:
- 2010: 29%
- 2011: 29%
- 2012: 38%
- 2013: 40%
- 2014: 32%
- 2015: 45%
- 2016: 45%
- 2017: 46%
- 2018: 59%
- 2019: 57%
- 2020: 60%
- 2021: 64%
Source: USDA
By Jake Diana, ALC San Francisco
When it comes to the rapid advancement of AI and automated technology, there are few topics more controversial than autonomous vehicles. Many states are not only utilizing, but actively encouraging the implementation of autonomous trucking technologies. From Elon Musk’s Tesla line featuring autopilot mode to the seemingly endless supply of Waymo driverless vehicles throughout major California cities like San Francisco and Los Angeles, it seems that autonomous transportation is becoming less and less avoidable in today’s society.
For some folks, it is evidence of the state’s willingness to change with the times and adapt in ways that allow for a more streamlined future. For others, autonomous vehicles represent a threat to the economy, potentially taking the livelihoods of thousands of hard-working industry veterans by eliminating the need for truck drivers.
On May 31, 2023, the California State Assembly voted to ban driverless trucks from operating within state lines, mandating the presence of a safety driver within these vehicles. Should this bill (AB 316) pass in the California State Senate, California would fall further behind in terms of implementing autonomous technology into the trucking logistics industry. Jeff Farrah, executive director of the AVIA (Autonomous Vehicle Industry Association), stated directly after that “AB 316 undermines California’s law enforcement and safety officials as they seek to regulate and conduct oversight over life-saving autonomous trucks” in reference to the often utilized argument that the use of self-driving vehicles actually increases road safety and causes a regression in transportation-related deaths. Industry veterans strongly refute this argument, believing that their experience and human characteristics allow for better results.
Fernando Reyes, Teamster Local 350 member, advocated for trucks needing drivers, stating: “…the thought of it barreling down the highway with no driver is a terrifying thought and it isn’t safe…”. He goes on to elaborate further into the safety risks posed by a lack of drivers, saying, “…I know to look out for people texting while driving, potholes in the middle of the road and folks on the side of the highway…”. Clearly, this is a divisive issue featuring some strong points on both sides, yet how does it affect freight brokerage companies?
The answer is that a potential monopoly on trucking due to utilizing autonomous trucks could be just as devastating for brokerages as the carriers themselves. Automated transportation would have a cascading effect on the industry as a whole, as the need for drivers would be eliminated. If there were no drivers involved, there would be no dispatchers. Therefore, shippers would likely come to the conclusion that they would be better served purchasing automated trucks and their accompanying tracking/logistical management systems. Most, if not all, brokerages would be forced to end operation given that much of the moment-to-moment load management would become obsolete as driver error would be eliminated. Rate negotiations would cease, as shippers would own their own fleets in entirety and therefore have no reason to seek outside guidance or management.
However, the need for truck drivers for produce and perishable products is an entirely different conversation. Most of these loads are multi-pick, where a human is needed, so they will probably not see driverless vehicles in the future. As of now, it seems that fully autonomous freight transportation is still decades away from being viable – seemingly in step with the gradual implementation of autonomous technology across all sectors of the world.
*****
Jake Diana graduated in 2020 from the University of Oregon with a Bachelor of Arts degree in General Social Sciences. Diana joined the ALC San Francisco office in August 2022 as a broker’s assistant, before being promoted to carrier sales representative, and most recently to carrier sales manager. He is a high-energy individual with a passion for competition, teamwork, and tech.
jake.diana@allenlund.com
Celebrating summer with a barbeque event will be costlier this year, a new economic analysis from Rabobank shows.
The 2023 Rabobank BBQ Index reveals a 10-person barbecue will cost nearly $100 this year, according to a news release. In fact, food items listed on the barbecue menu have jumped 31% since 2018, according to Rabobank.
The Russia-Ukraine war, severe drought, higher wages and rising costs of farm inputs, transportation and energy have combined to fuel broad-based inflation throughout the supply chain.
COUNTING THE COST
The 2023 Rabobank BBQ Index, which measures the cost of staple ingredients for a 10-person barbecue, shows that it will cost $97 to host a cookout on Independence Day this year, up from $73 in 2018.
Food prices have shot up 31% in the last four years, the biggest four-year gain since the late 1970s oil crisis, according to Rabobank.
Here are price increases over the last four years, according to Rabobank:
- Soda: 53%.
- White bread: 51%.
- Potato chips: 46%.
- Chicken: 37%.
- Lettuce: 29%.
- Ground beef: 25%.
- Beer: 22%.
Despite the elevated food costs, Rabobank analysts said many consumers — particularly those under 40 — are now prioritizing experiences over goods and are willing to splurge for a special occasion.
“Consumers have taken some heavy punches but they’re still standing,” Tom Bailey, senior consumer foods analyst at Rabobank, said in the report. “They’re being shrewd in areas that don’t enrich experiences, while giving in to the urge to splurge where it matters most. With that mindset, look for spending to heat up this summer on quality meats and drinks — the recipe for a memorable barbecue.”
The trend to value “experience over things” was emerging before COVID-19, but Rabobank analysts said the shift has accelerated, especially for millennials and Generation Z. For baby boomers, spending on travel and food has increased, in part thanks to an 8.7% cost-of-living adjustment to their Social Security benefits this year, according to Rabobank.
A healthy labor market is also keeping consumers willing to spend their money. The May jobs report showed that unemployment sits at 3.7%, down from its pandemic peak of 14.7% just three years ago, Rabobank economists said.
“Steady work makes it easier to justify increased spending when budgets are tight,” Bailey said in the report. “Rather than trading down to soften the blow of stubbornly high inflation, we may see consumers trading up to more premium products.”
The Rabobank BBQ Index, according to the report, assumes an average American barbecue event on the Fourth of July with 10 adults, with each consuming the same amount of food and beverages.
The index assumes each person will consume one cheeseburger with lettuce and tomato, one chicken sandwich with lettuce, tomato and a slice of cheese, two handfuls of chips, a beer, a soda and a few scoops of ice cream.
USDA data shows strawberry consumption continues to surge.
Retail per capita availability of strawberries has grown from 5.3 pounds in 2016 to 6.7 pounds in 2021, according to the USDA.
Both domestic and import supplies of strawberries have increased in the past two decades, but the growth of imports has been much stronger.
The USDA estimates that domestic strawberry output increased from 1.77 billion pounds in 2016 to 2.17 billion pounds in 2021, a gain of 23% in that five-year period.
At the same time, imports of strawberries increased 43% from 2016 to 2021, rising from 365 million pounds in 2016 to 521 million pounds in 2021.
As a percent of the total strawberry supply in the U.S., the USDA reports that imports accounted for 19% of the total supply in 2021, up from 17% in 2016 and up from just 7% in 2000.
The peak month for domestic strawberry availability in 2022 was May, when shipments accounted for 15% of the total annual supply. Other top months for strawberry shipments include June (14%), April (11%), July (11%) and March (9%). The month with the smallest domestic shipments in 2022 was December, when just 3% of the domestic annual volume was shipped, according to USDA truck shipment data for conventional fruit.
Imported strawberry volume, dominated by Mexico, is active year-round. However, the top months for strawberry imports were February (18% of total annual volume), March (18%), January (16%) and April (14%). The smallest import volumes were recorded in August and September, which both accounted for less than 1% of the total imported annual volume.
Mexican fresh tomato shipments for 2023 are predicted to hit 3.87 million metric tons, a 2% increase over the Mexican government’s official 2022 production estimate of 3.8 million metric tons, according to the USDA.
“Stable U.S. demand and increasing adoption of greenhouse technologies account for the uptick in year-on-year production growth,” the report said.
The USDA also forecasts Mexico’s 2023 fresh tomato exports at 2.06 million metric tons, a 5% increase over 2022, due to expected higher production, stagnant domestic consumption and robust U.S. demand.
Although exports to the U.S. occur year-round and are consistently above 100,000 metric tons per month, the largest volume of exports generally occurs from January to March and from October to December.
In 2022, the report said Mexico exported over 1.81 million metric tons of tomatoes to the U.S. and accounted for about 91% market of tomatoes imported into the U.S.
Sinaloa remains Mexico’s largest tomato-producing state and accounts for 22% of total production, followed by San Luis Potosi, Michoacán, Zacatecas and Jalisco.
Mexico’s tomato exports to the U.S. will remain strong due to robust supplies and flat Mexican consumption.
Mexican tomato production occurs throughout the year with two overlapping production and harvest peaks, the report said. From December to April, the state of Sinaloa — Mexico’s largest open-field and shade house tomato producer — dominates the domestic market and exports over 80% of its crop to the U.S., according to the report.
During the period from May to November, the states of San Luis Potosi followed by Michoacán, Zacatecas, Jalisco, Baja California Sur, Sonora, Morelos, and Puebla become major suppliers, the report said.
According to the Mexican government’s Agrifood and Fisheries Information Service, the official 2022 production estimate reached 3.8 million metric tons.
Sinaloa’s production in 2022 totaled 821,000 metric tons, followed by San Luis Potosi with 475,149 metric tons, Michoacán with 322,153 metric tons, Zacatecas with 244,706 metric tons, Jalisco with 197,946 metric tons and Baja California Sur with 189,659 metric tons.
San Luis Potosi, Michoacán, Zacatecas and Jalisco account for over 55% of national production, but tomatoes are grown throughout the country, the report said.
“While Sinaloa currently remains Mexico’s largest state-level producer, most of the overall production growth is dispersed across San Luis Potosi, Michoacan, Jalisco, as well as other smaller producing states,” the report said.
Mexico exports over half of its annual tomato production, and growers throughout the country use greenhouses, shade houses, high-tunnel systems and other climate-control technologies to supply the U.S. market year-round, the report said. In fact, Mexican government sources reveal that 67% of tomato production is grown under controlled conditions, the report said.
The greatest volume of Mexican tomatoes imported into the U.S. enters through the Laredo (Texas) Customs District, followed by the Nogales (Ariz.) and San Diego Customs Districts, the report said.
The Laredo District has four important ports of entry for fresh tomato shipments, chiefly Pharr, Laredo, Brownsville and Progreso. In comparison, the Nogales and San Diego Customs Districts each have just one port of entry for tomatoes, the report said.
BEAVERTON, OR — Truckload freight volumes and spot rates held firm in June while contract rates fell to their lowest points in almost two years, according to DAT Freight & Analytics, operators of the industry’s largest online freight marketplace and DAT iQ data analytics service.
“The gap between spot and contract rates was the narrowest since April 2022,” said Ken Adamo, DAT Chief of Analytics. “Rates for van and refrigerated freight increased for the third straight month, and volumes were almost unchanged from May. These are signs that spot truckload prices have reached the bottom of the current freight cycle.”
The national benchmark contract rate for dry van freight has not increased for 12 consecutive months. At $2.58 per mile, the rate was 70 cents lower than a year ago.
Volumes held steady in June
The DAT Truckload Volume Index (TVI), an indicator of loads moved during a given month, decreased marginally for van and refrigerated (“reefer”) freight and increased slightly for flatbed loads:
- Van TVI: 230, down 1% from May
- Reefer TVI: 167, down 3% from May
- Flatbed TVI: 267, up 2% from May
Van, reefer rates improved
On the spot market, the national benchmark rates for van and reefer freight rose while the flatbed rate declined compared to May:
- Spot van rate: $2.08 per mile, up 3 cents, the first increase in five months
- Spot reefer rate: $2.47 a mile, up 3 cents
- Spot flatbed rate: $2.61 a mile, down 4 cents
Van line haul rates averaged $1.65 a mile, up 4 cents compared to May, while reefer line haul rates averaged $2.01 a mile, up 5 cents. The flatbed line haul rate dipped 2 cents to $2.10 a mile. Line haul rates subtract an amount equal to an average fuel surcharge. Lower diesel prices in June pushed fuel surcharges to 17-month lows, averaging 43 cents a mile for van freight, 46 cents for reefers, and 51 cents for flatbeds.
Load-to-truck ratios reflected seasonal demand
Load-to-truck ratios reflect truckload supply and demand on the DAT One marketplace:
- The national average van load-to-truck ratio was 2.6, meaning there were 2.6 loads for every van posted to the DAT One marketplace last month. The ratio was 2.5 in May and 3.9 in June 2022.
- The reefer ratio averaged 3.8, up from 3.6 in May and down from 7.0 in June 2022.
- The flatbed ratio fell to 9.7, down from 11.7 in May and 37.6 in June 2022.
“Demand for truckload services typically slows at this time of year, but this could change quickly given the threat of strikes in the parcel and less-than-truckload sectors,” Adamo said. “Shippers are putting contingency plans in place and would look to freight brokers and carriers on the spot market to keep their line haul operations moving. Demand for trucks would jump, especially around Louisville, Memphis, Indianapolis, Dallas and other major parcel hubs.”
About the DAT Truckload Volume Index
The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month; the actual index number is normalized each month to accommodate any new data sources without distortion. A baseline of 100 equals the number of loads moved in January 2015, as recorded in DAT RateView, a truckload pricing database and analysis tool with rates paid on an average of 3 million loads per month.
Spot truckload rates are negotiated for each load and paid to the carrier by a freight broker. National average spot rates are derived from payments to carriers by freight brokers, third-party logistics providers and other transportation buyers for hauls of 250 miles or more with a pickup date during the month reported. DAT’s rate analysis is based on $150 billion in annualized freight transactions.
About DAT Freight & Analytics
DAT Freight & Analytics operates the largest truckload freight marketplace in North America. Shippers, transportation brokers, carriers, news organizations and industry analysts rely on DAT for market trends and data insights based on more than 400 million freight matches and a database of $150 billion in annual market transactions.
Founded in 1978, DAT is a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the S&P 500 and Fortune 1000 indices.
By Bill Bess, ALC
It’s no secret that organized crime, scammers, and thieves are actively working to upset the legitimate flow of freight across the US and Canada. This type of crime has been going on for years, but in the last 12 months thieves have intensified their efforts. Cargo security is a major concern no matter what your role is in the food supply chain. We are all in this together and together we can tighten up our security and make a huge difference.
Allen Lund Company has taken a pro-active approach to identify and eliminate potential security breaches. We have made changes to our on-boarding process, which is closely monitored by our Carrier Resources department. Education and training for brokers has given them the tools to evaluate the potential risk that a carrier might exhibit and react accordingly. Our Accounting department scans thousands of bills of lading and invoices monthly, looking for any inconsistencies. In addition to the internal measures ALC has taken, we share information and best practices with the Transportation Intermediaries Association, CargoNet, Carrier411, and other transportation companies. These policy changes, information sharing, and additional training will continue to make a difference.
What can a shipper or a warehouse do to help prevent your product from being compromised?
- Prior to loading, have your broker give your shipping department the driver’s name, company name, and trailer number. If the information doesn’t match call the broker.
- Whenever possible use a temp recorder that has a tracking device built in. These devices have the ability to monitor temps and location.
- Don’t rely on the pick-up number to verify the carrier.
- Verify the driver’s name with their license. Insist that the bills are signed legibly by the driver and include their company name. If necessary, have the driver print their name and company name.
- Driver should arrive with a pre-cooled trailer. Driver should acknowledge that they understand the desired temp and that it is in continuous mode.
- Most importantly, use a transportation service provider that has the experience and protocols in place that are necessary to protect your product.
We are all in this together with the same basic goal…to deliver the safest and freshest product to our customers.
*****
Bill Bess, Director of Carrier Development, was previously the manager of ALC Orlando, FL, and has been with the Allen Lund Company for 39 years. With over 45 years of experience transporting perishable products, Bess’s expertise includes perishable supply chain protocols, claims resolution, and developing carrier-specific programs for the company.
bill.bess@allenlund.com
Dollar General is pulling back on “nice to have” investments in favor of “need to have” as inflation and income pressures its bottom line. The move mirrors many of its customers.
Headquartered in Goodlettsville, TN, the company is cutting its pOpshelf concept in 2023, reducing the number of stores in the pipeline to 90, down from 150. The concept, which is focused more on urban shoppers with higher incomes, currently has more than 160 stores in 16 states.
“We are reevaluating our plans with regards to our timing of reaching 1,000 stores by the end of 2025 and plan to provide an updated expectation at a later date,” said CEO Jeff Owen, during the company’s recent earnings call.
Reductions in SNAP dollars and lower-than-usual tax returns hit Dollar General customers hard, Owen said. That resulted in less discretionary spending, and lower sales in non-consumables.
“Unfortunately, our customers are saying they’re having to rely more on food banks, savings, and credit cards,” Owen said.
One area Dollar General continues to focus on is its DG Fresh, and fresh produce initiatives. DG Fresh has enhanced profitability of perishables for the company, and while it continues to focus on frozen and refrigerated foods, fresh produce is still on the radar.
“While produce is not currently serviced by our internal supply chain, we continue to believe that DG Fresh provides a potential path forward to expanding our produce offering to more than 10,000 stores over time,” Owen said.
By the end of the first quarter, March 31, Dollar General offered fresh produce in nearly 3,900 of 19,000 stores. Owen said the company is on track to expand that number to 5,000 by the end of 2023.