Archive For The “News” Category
Prices of shipping containers have fallen by two-thirds this year after reaching figures tenfold on major trade routes during 2021, according to Investors’ Chronicle. Rates slowly began falling in the third quarter of 2022 and are expected to continue to drop, the outlet reports.
The estimated cost of shipping a 40 foot container from China to the U.S. West Coast has dropped by 84% since the start of April to $2,470, according to Freightos Baltic Index.
Although the rate is 86% lower year-on-year, it is still 80% higher than in October 2019, before the onset of the pandemic.
Shipping container prices for routes between China and northern Europe began their decline in January, Freightos’ head of research Judah Levine said.
The executive quoted the hit to disposable incomes from higher inflation and the shift in spending from goods to services as the two main factors for the decrease.
Consequently, as lower demand sets in, the congestion issues that have affected major ports around the world is also starting to ease. Prior to the pandemic, only around 3% of global container ships were held up due to this problem. Today, this affects 8% of vessels, a considerable drop from 14% in January 2022.On the other hand, contract rates are also in decline. Shipping data firm Xeneta’s index tracking contract rates from China to Europe recorded its biggest ever month-on-month drop of 8% in October. However, the figure is still 64% higher than in January 2022.
By Makenna Christensen, Software Sales Coordinator, TMS
I graduated this past May from Marquette University and, shortly after, started working at the Allen Lund Company. I have had the opportunity to jump feet-first into one of the country’s most vital industries under immense pressure since the pandemic. To say I’m a newbie would be an understatement, but the best part about being a newbie is that I offer a fresh perspective on the industry. So, here are a few takeaways from my first five months.
The transportation industry is the most critical sector of the American economy, yet it is underappreciated. Without it, people across the nation would be unable to access even the most basic necessities. We often forget that every trucker, broker, and dispatcher is just as essential as our firefighters, nurses, and doctors. Luckily, perceptions are changing; recent polling found that 87% of voters have a favorable perception of the trucking industry, a 20% increase from 2019. Personally, I think these everyday heroes deserve a huge round of applause.
In addition to recognizing these essential workers, we also need to note that we are in an age where digital technology has become the norm. How is such a vital function still stuck in the dark ages? It is estimated that today, approximately 40% of all containerized transactions are still reliant on the physical transfer of paper BOLs. The economic benefits of digital BOLs are immense, with some estimating that widespread adoption of electronic BOLs could save upwards of 6.5 billion dollars for all stakeholders involved. Paper BOLs may be the most blaring example of a technological gap, but there are still businesses across the country that process all their shipments on pen and paper. By digitizing processes with cutting-edge technology, like AlchemyTMS, these companies can improve efficiency and, ultimately, their bottom line.
The most important insight I have gained is that I need to learn more. My first few months merely scratched the surface of the industry’s processes, needs, and limitations. My training has been a team effort that has exposed me to opportunities to expand my knowledge every day, and I look forward to learning more with you.
*****
Makenna Christensen graduated from Marquette University in 2022 with a Bachelor of Science in Marketing and Human Resources. She started working at the Allen Lund Company in July 2022, as a Software Sales Coordinator for ALC Logistics, the software division of ALC.
The North American market remains crucial for the blueberry industry, according to Dutch multinational banking and financial services company Rabobank. Because of the U.S. is one of the main destination markets, it is focusing on availability as demand for year-round conventional and organic blueberries remains steady.
Rabobank noted in a report on the global blueberry industry, while fresh blueberry production in the U.S. has grown at a compound annual growth rate (CAGR) of 3% over the past 10 years and at a rate of 7% over the past 20 years, availability in the U.S. market has expanded at CAGRs of 9% and 11%, respectively.
“Since 2016, U.S. imports have consistently outpaced US domestic production as the industry has focused on providing reliable year-round availability to U.S. consumers,” the report said.
On the other hand, the appraisal states U.S. exports have remained flat or declining. Going forward, U.S. blueberry imports “will continue to grow during the U.S. offseason, potentially setting new records every year for the next few seasons.”
In 2021, exports of non-organic fresh highbush blueberries from the US were 14% higher than in 2012, showing an increasing concentration of shipments with Canada as their market destination.
Over the past decade, other markets importing U.S. produce included Mexico, South Korea, Taiwan, Japan, Singapore, and Hong Kong.
During the January-July period of 2022, U.S. imports increased 10% year-on-year as the Peruvian season has been starting earlier every year. Also, 2021 marked the first calendar year Mexico displaced Chile as the second largest supplier of non-organic blueberries to the U.S. market .
U.S. imports from Argentina and Uruguay have dropped significantly in recent years as these countries face increased competition in the international market. The average annual unit value of U.S. imports appears to have stabilized as supplies have increased during the shoulders of the season, when prices were the highest.
Harvested acreage in selected U.S. states has almost doubled over the past 15 years, Rabobank notes. According to USDA figures, harvested area in Washington and Georgia has grown fivefold and fourfold, respectively, to over 20,000 acres in both states. Moreover, most states show a positive trend in harvested acreage.
The report states average yields of tame blueberries vary significantly by state. Volumes go from 5,000 to 6,000 pounds per acre to 10,000 to 11,000 pounds per acre, according to government statistics.
FourKites, a Chicago-based transportation visibility company and Food Shippers of America have released the results of a survey of more than 115 industry leaders about logistics challenges in the food and beverage supply chain.
Results, according to a news release, reveal that the three biggest challenges facing the food shipping industry are:
- Labor and talent management (49%)
- Transportation capacity issues (39%)
- Supply and demand planning disruptions (35%)
Shippers indicated that COVID-19’s impact on labor (56%), over-the-road capacity constraints (44%), port delays and congestion (30%) and changes in consumer behavior or buying patterns (22%) have all disrupted operations and created or worsened challenges, the release said.
Since the pandemic began, more than 30% of respondents reported they have seen a drop in customer loyalty, while 55% have seen a sales decline or miss due to product shortages, according to the release.
About three of four who responded to the survey said they are “concerned” or “very concerned” that rising inflation and geopolitical uncertainty will negatively impact sales during the fourth quarter of 2022, according to the release.
According to recent FourKites data, the 28-day average food and beverage shipping volume is down 1% year-over-year, compared to a nearly 10% decline in shipments for all other industries, the release said. The 28-day average percentage of food and beverage deliveries delayed has remained stable throughout the year, hovering around 27.5%.
“Food and beverage shippers have contended with a lot lately, as the industry has been more affected by product and material shortages than most, and for goods that are in demand year-round,” Glenn Koepke, FourKites general manager of network collaboration, said in the release. “Those who have navigated supply chain disruptions the most successfully are companies that have leaned heavily on technology and collaboration to identify and address issues before they snowball into major events.”
The food supply chain is investing in technology and automation, the survey said.
“If we’ve learned anything over the past couple of years, it’s that disruption is going to be continuous, and we need to have visibility throughout our supply chain,” Melissa Wreath, senior director of account management at ArrowStream, a foodservice supply chain technology, said in the release. “FourKites allows us to have a real-time understanding of where things are throughout the entirety of the network. Without it, you’re continuously playing catch-up.”
A whitepaper about the survey is available from the FSA website.
Fowler Packing Company of Fresno, CA with backing from Ag Partners Capital, has acquired SunWest Fruit Company, a citrus and tree fruit grower in Parlier, Calif. This acquisition will add over 10,000 acres of premier farmland in coveted water districts to Fowler Packing’s holdings, according to a news release.
“Given the significant headwinds facing California agriculture, we are constantly evaluating how we can better support our retail partners, consumers, and employees,” Justin Parnagian, chief executive officer said in the release. “This is the largest acquisition in Fowler Packing’s history and represents a historic moment for our family-owned company.”
The acquisition of SunWest Fruit is part of Fowler Packing’s long-term strategic plan to strengthen the company’s position in the citrus category and California agriculture by growing total mandarin volume, expanding citrus offerings, and increasing packing capacity. Fowler Packing has thoughtfully grown and expanded over the course of its 72 year history, becoming one of the largest farming companies in the state.
What’s more, since Fowler Packing’s Peelz launch in 2019, the mandarin brand has experienced sustained growth, gained market share and increased sales in the last year by over 60%. The Peelz brand is sold in more than 12,000 stores throughout North America, according to the release.
Bakersfield, Calif. – Sun World International LLC (Sun World) announced it has added three importers to its panel of North American licensees. These include GrapeMan Farms, Pacific Trellis Fruit and Sierra Produce. The appointments further expand the company’s panel of licensed importers to 17 companies.
GrapeMan Farms, Pacific Trellis Fruit and Sierra Produce join a select list of Sun World licensed importers in North America, including Camposol Fresh USA, Capespan North America, Dayka & Hackett, Dole Fresh Fruit Co., Divine Flavor International, Fresh Flavor International, Jac. Vandenberg, Southern Fruit Import Co., Star Produce, Summit Produce, North American Produce Buyers, The Oppenheimer Group, Vanguard Direct, and William H. Kopke Jr., Inc. Each of these companies holds a license to distribute and market Sun World’s full line of proprietary grapes in the United States and Canada from licensed Chilean, Peruvian, Brazilian and South African suppliers.
The licenses include the right to import fruit from existing and new varieties developed by Sun World, marketed under the company’s powerful brands, such as AUTUMNCRISP®, MIDNIGHT BEAUTY®, SABLE SEEDLESS®, ADORA SEEDLESS®, and SCARLOTTA SEEDLESS®.
“We are pleased to appoint these extraordinary importers, to further bolster our presence in the global fruit trade,” said Garth Swinburn, Vice President of Licensing for Sun World. “We’re confident that providing further access to our proprietary fruit varieties will allow our licensed growers to maximize their revenues while increasing consumer exposure to our table grapes and related varietal brands,” he added.
Grapeman Farms is a vertically integrated grape grower-marketer based in Bakersfield, California with a proud history of providing premium quality grapes for nearly 50 years. With offices in Arizona, California and New Jersey, the company has established a multinational operation, sourcing the finest quality of product from Chile, Peru, Mexico and California.
Pacific Trellis Fruit established in 1999 and headquarter in Los Angeles, CA with sales offices in Fresno, CA, New Jersey and Arizona is one of North America’s top year-round importers, growers, and marketers of premium fresh fruit, including grapes, peaches, plums, nectarines, cherries, and citrus. The company partners with growers from Peru, Chile, Brazil, Spain, Mexico, and California to provide a 52-week availability of quality grapes to our customers.
Sierra Produce is an importer, marketer, and shipper of fresh fruit products sourced nationally and globally. The company has over 35 years of fruit import experience with long standing and diverse grower/exporter relationships and are committed to providing an assortment of both abundant volume and the latest innovative varieties available.
Sun World International LLC is a global variety development and licensing business. Sun World’s mission is to drive the growth of fruit breeding, varietal development, licensing and agricultural technologies. The California-based company has a network of licensed growers and marketers and maintains offices in the United States, Europe, Australia, South America, Israel, North Africa, and South Africa.
DALLAS — Imports of Mexican Hass avocados continue to make substantial contributions to the U.S. and Mexican economies according to the latest economic contribution analysis conducted by Texas A&M University1 during the 2021-2022 growing season. Since 1997, the avocado supply from Mexico in the U.S. has jumped to more than 2 billion pounds annually1, and more than 4 billion pounds in the last two years alone2 – fueled by consumers’ love of the healthful fruit while also positively benefiting U.S. national and state economies.
The economic analysis1 identifies numerous contributions from U.S. imports of Mexican Hass avocados to the U.S. economy as avocado trades move through the food supply chain and stimulate various market activities. The contributions include:
- $11.2 billion in economic output
- $6.1 billion to the U.S. GDP (value-added)
- 58,299 U.S. jobs
- $3.9 billion in labor income
- $1.3 billion in taxes
“The new data is a testimony to the positive impact the trade relationship between the two countries can have on the overall economies,” said Ron Campbell, Executive Director of the Mexican Hass Avocado Importers Association (MHAIA). “The analysis by Texas A&M University clearly shows how the collaboration between the Association of Avocado Exporting Producers and Packers of Mexico (APEAM) and MHAIA is contributing not only to the economic growth of both nations, but also to a localized impact within communities through added jobs, labor income and taxes.”
When comparing results from previous years, this new report reveals the persistent growth and importance of Mexican avocado imports to the U.S. economy. The contribution to total U.S. output increased nearly 560% from $1.7 billion in 2012 to $11.2 billion in 2022. At the same time, the contribution to U.S. GDP (value added) has increased by nearly 410% from $1.2 billion in 2012 to $6.1 billion in FY 2022. The contributions to U.S. labor income, U.S. tax revenues, and employment from 2012 to FY 2022 have also registered dramatic increases3 (465%, 665%, and 418%, respectively).
“The avocado import growth is attributed to two factors – dramatic growth in U.S. demand for avocados and equally dramatic growth in U.S. import supply,” said Dr. Gary Williams, Emeritus Professor at Texas A&M University. “U.S. per capita consumption of avocado fruit has grown to more than 9 pounds1 and promotion programs like Avocados From Mexico have been instrumental in increasing avocado consumption in the U.S.”
The growth of Mexican avocado imports has also had a positive impact on growers in the U.S. and Mexico. The Texas A&M University analysis shows domestic avocado growers have benefited from higher price points and a larger market for their products. In Mexico, avocado farming continues to be a feasible and reliable business venture as the Mexican avocado industry creates approximately 78,000 direct and permanent jobs and more than 300,000 indirect and seasonal jobs, with more than 30,000 growers and 74 packers.
“It’s rewarding to see the economic impact Mexico’s strong partnership with the U.S. has had in meeting the ever-increasing demand for Avocados From Mexico. This partnership has become an economic engine that supplies the growing demand for avocados in the U.S. and opens opportunities for small avocado farmers in Mexico that allows them and their families to thrive,” said Alvaro Luque, CEO of Avocados From Mexico (AFM).
Avocados From Mexico represents a unique collaboration between the two countries: AFM is a non-profit marketing organization that brings together the Mexican Hass Avocado Importers Association (MHAIA) and the Association of Avocado Exporting Producers and Packers of Mexico (APEAM) to promote the consumption of Mexican avocados in the U.S. This has helped fuel the United States’ love for the avocado fruit and builds a bond which benefits both countries economically.
This partnership also benefits consumers. Through AFM, consumers receive healthful avocados that are the freshest, arriving from Mexico in three to five days, and are the highest quality product, with every avocado exported to the U.S. meeting strict dry matter testing requirements. The dry matter test ensures avocados in the U.S. have an adequate oil percentage, which provides the fruit with optimal consistency and delicious taste. The microclimate, volcanic soil and timely rainfall of Michoacán, Mexico, allows avocado trees to bloom year-round in Michoacán, the only region sending Hass avocados to the U.S. 365 days a year. Now, with the recent addition of avocados from the Mexican state of Jalisco, the industry’s ability to meet year-round demand of avocados in the U.S. is further enhancing. Hass avocados now comprise about 95% of all U.S. avocado consumption and are the most widely available1.
A deep dive into all facets of the Mexican avocado industry is available at the Avocado Institute. The one-stop digital resource was created by the parent organizations of AFM, the Association of Avocado Exporting Producers and Packers of Mexico (APEAM) and Mexican Hass Avocado Importers Association (MHAIA).
About Avocados From Mexico
Avocados From Mexico (AFM) is a wholly-owned subsidiary of the Mexican Hass Avocado Importers Association (MHAIA), formed for the purpose of advertising, promotion, public relations and research for all stakeholders of Avocados From Mexico. Under agreements, MHAIA and the Association of Avocado Exporting Producers & Packers of Mexico (APEAM) have combined resources to fund and manage AFM, with the intent to provide a focused, highly- effective and efficient marketing program in the United States. AFM is headquartered in Irving, Texas.
1 2022 Update: The Economic Benefits of U.S. Avocado Imports from Mexico
This analysis utilizes the Impact Analysis and Planning Model (IMPLAN) to measure the jobs, revenues, wages and taxes generated by the imports along the value chain on the national and state economies. IMPLAN is an input-output model of the entire U.S. economy that captures the relationships between industries and estimates the economic effects (direct, indirect, and induced). The IMPLAN model reports on four specific types of economic effects: employment contribution, labor income, value-added, and output or gross sales contribution.
2 Hass Avocado Board Volume Data
3 Economic Benefits of the Expansion of Avocado Imports from Mexico, February 2014
By Kenneth Cavallaro, Jr., ALC Boston
Trucking recession? According to a recent Bank of America survey, demand for trucks is actually down 58%. Consumers are spending less money on material items such as televisions and clothing and instead funneling more of their hard-earned funds towards services, reports the U.S. Bureau of Economic Analysis. Kantar’s Entertainment On Demand streaming analytics reveal streaming subscriptions are up 88% since the beginning of 2022. More people are using companies like DoorDash and Grubhub for food delivery. Meanwhile, electricity prices are expected to climb on an average of 20% across the United States this winter and natural gas costs are predicted to increase 36% according to the U.S. Energy Information Administration, presumably further leading to less discretionary spending on material items. What does this mean for the trucking industry?
Our industry is all about supply and demand. The latest data from S&P Global Market Intelligence shows freight rates have continued to fall as global trade volumes slow due to shrinking demand for goods. Freight rate forecasters utilizing the Cass Index have indicated that “freight rates are leveling off and set to slow sharply in the months to come.” So yes folks, we are truly in a trucking recession. Thankfully, with 70% of all goods in the United States moved by the trucking industry, this will eventually resolve. The last recession hit in 2007 and lasted almost two years.
So where do we go from here? Federal investment in our country’s roads, highways, and bridges over the next four years will make it easier for trucks to make on-time deliveries. Drivers will likely see their lives improved by programs like our innovative ALC tracking app, which creates an easier flow of information and allows better estimating on loading and unloading times once they reach shippers or receivers. In addition, our app supports better tracking and provides us with an easily accessible timeline of how the customer’s load is progressing.
Transportation of produce and other refrigerated items leads to even higher rates, partially because of increased fuel usage during wait times for loading and offloading, as the load must be kept at a precise and constant temperature. In addition, wait times are frequently increased when produce coming fresh from the field needs time to cool or produce coming off the truck must undergo quality inspections. Situations such as these increase the amount of fuel the truck requires to keep the reefer running, causing the rates for produce transportation to soar higher than rates to transport non-perishable goods.
With many trucking companies struggling due to the harsh conditions of the current market, company mergers are coming more into play. More trucking companies will likely move in this direction in 2023 if the market does not improve. This would allow more companies to stay afloat, instead of lessening the amount of trucks on the road. Continued urbanization will also allow truckers to traverse parts of the country that were previously off-limits, allowing deliveries to reach more people in less time. There will always be peaks and valleys as we ride this trucking rollercoaster, so buckle up, pull down the lap bar, and hang on for dear life because it is going to be a bumpy ride.
*****
Kenneth Cavallaro, Jr. is a Senior Transportation Broker in the Boston office. He began his career at the Allen Lund Company in February of 2019. Kenneth has been in the transportation industry since May of 1999. He holds a Bachelor of Arts in Communications from Salem State University.
The port of New York and New Jersey, following a historic flux during August, jumped to the first place as the U.S. busiest shipping port, CNBC reports.
The publication notes that container processing totalled a combined volume of 843,191 TEUs between imports and exports. However, the East Coast gains have led to congestion in Savannah, Houston and NY/NJ.
Kevin O’Toole, chairman of the Port Authority, told the outlet: “We are exceeding pre-Covid numbers. Our planning with rail to complement the actual infrastructure and the dredging are allowing this added capacity that would not have happened four or five years ago.”
This comes as the flow of trade continues to move away from the West Coast with logistics managers worried about a labor strike or lockout.
“While volumes are up, the congestion at the East Coast ports may be at an inflection point after months of record-breaking import levels,” Josh Brazil, vice president of supply chain insights for Project44, toldCNBC.
The Port of Los Angeles ranked third in August, moving 805,314 total containers. That was 37,877 less than the Port of New York and New Jersey, which moved 843,191. The Port of Long Beach came in second, moving 806,940 export and import containers.