Archive For The “News” Category
Driven by efforts to catch up on North-South routes, reefer container rates have risen sharply through 2021, but in contrast to dry cargo rates, are forecast to rise further in 2022. Conclusions are found in Drewry’s recently published Reefer Shipping Annual Review and Forecast 2021/22 report.
Drewry’s Global Reefer Container Freight Rate Index, a weighted average of rates across the top 15 reefer intensive deep-sea trade routes, rose 32% over the year to 2Q21 and by the end of 3Q21 these gains are expected to reach as much as 50%.
But these advances are dwarfed by the recent surge in dry container freight rates which have seen average container carrier unit revenues more than double over the same period.
The resurgence in reefer freight rates has not been uniform across all trades. Pricing recovery has been particularly strong on the main East-West routes, where vessel capacity conditions have been noticeably tight. But North-South trades have generally seen less price inflation, particularly on export routes from WCSA, Central America and Southern Africa.
“In contrast to dry container freight rates which are expected to decline in 2022 as trade conditions normalise, reefer container freight rates are forecast to continue rising as price inflation feeds into North-South routes when long term contract rates are renewed,” said Drewry’s head of reefer shipping research Philip Gray. “Most reefer cargo on these trades moves on long term contracts.”
The key driver of reefer freight rate inflation has been capacity related, as perishables shippers have competed with higher paying dry freight BCOs for scarce containership slots, despite ample reefer plug capacity provision. Meanwhile, continued disruption across container supply chains has led to acute shortages of reefer container equipment, already challenged by the particularly imbalanced nature of reefer trades.
“We believe that these conditions are short term and will self-correct as trade normalises from mid-2022,” added Gray. “However, we expect reefer container equipment availability to remain an issue for certain trades during their peak seasons, as the global fleet is not expected to keep pace with rising cargo demand, despite record output of newbuild containers.”
These conditions have provided short term reprieve to specialized reefer vessels, as some BCOs have returned to the mode seeking relief from congested container supply chains. But despite these developments Drewry estimates that the specialized reefer vessel’s share of the perishables trade fell to 12% in 2020 and is expected to decline further into single figures over the next few years.
Hence, despite a 0.4% decline in global seaborne perishables trade in 2020 to 132 million tons, containership reefer liftings advanced 0.3% to 5.4 million tons. Further modal share gains and buoyant cargo demand will see containerized reefer traffic expand at a faster pace than dry cargo trade from 2022.
The contraction in overall seaborne perishables trade in 2020 was much milder than for dry cargo, demonstrating the stronger resilience of reefer trades to economic shock. The trade was particularly impacted by a shuttered hospitality sector which reduced demand for deciduous fruit, fresh vegetables and frozen potatoes, while Covid-19 containment measures cut crop production and fish catches.
Meanwhile, an outbreak of fusarium TR4 disease in the Philippines weakened growth in banana trades. But cargo demand was supported by a booming pork trade, owing to African Swine Fever driven imports into China.
Seaborne reefer traffic picked up through the first half of 2021, expanding 4.8% over the previous year, led by meat, citrus and exotics trades but is not expected to expand at the same pace as dry cargo through the remainder of the year as it is not recovering from as deep a contraction in 2020.
During my 47 years involvement with the trucking and produce industries, it has been my privilege to work with men and women, who are dedicated, hard-working and mostly good, down-to-earth honest folks. Without either industry it would be impossible to bring the finest fruits and vegetable to a hungry nation every single day. This is why I’ve been so proud to be part of these dynamic Industries.
And nothing is more important to the supply chain than trucks and truckers. Without you our great country would come to a halt.
I launched my career in September 1974 and was soon heavily involved in the most drastic change of the trucking industry, its deregulation. From this point on it has been a dynamic and exciting ride; one which I have never regretted.
haulproduce.com was formally launched in January 2012 and I “retired” nearly three years later. Over the past decade I’ve posted over 3,150 news and feature stories. Hopefully a few of the things I’ve learned over the past half century are beneficial.
May this special time of the year bring you peace, good health, and happiness. And may 2022 bring us hope, resilience and a belief the human race will become better.
I sincerely thank you for your loyalty and kindness.
-Bill Martin-
The United States receives fresh vegetables from more than 125 different countries, but most imports originate from Mexico and Canada.
In 2020, Mexico accounted for 77 percent of U.S. fresh vegetable import volume, and Canada represented 11 percent. An analysis of domestic census and trade data shows Mexican and Canadian producers have dominated the U.S. import market by offering protected culture—or greenhouse—imports as well as organic options, which increased choices for consumers.
While conventional and field-grown fresh vegetables still account for most imports, organic and greenhouse vegetables are expanding market reach.
U.S. consumers have pushed for greater consistency in supermarket produce and expanded demand for year-round availability of virtually all fresh vegetables. Between 1998 and 2020, the volume of fresh vegetable imports increased nearly 200 percent, and the value of fresh vegetable imports grew to exceed fresh exports by $7.6 billion, more than double the same figure a decade earlier.
Market Window Creep in Fresh Vegetable Imports
Market window creep is an extension of seasonal demand and refers to the increasing volume of fresh vegetable imports entering during the start or end of the traditional domestic production seasons.
Over time, the categorization of vegetables into summer and winter categories has dwindled as near year-round imports of both categories of produce proliferated. Many traditional domestic market windows have eroded as importers have found their own market windows expanding, according to trade data.
From 2008 to 2020, imports entered the market earlier than usual (entering the traditional domestic market window), and shipping seasons were extended into the following season.
By Kenny Lund, ALC, Corporate
The Supply Chain has never been more appreciated or misunderstood than in the past year. This is a good time to give a reminder of the most important person in this wonderful chain of supplies traversing this great country: THE DRIVER. Yes, the driver!
They are the ones who make the whole system work. They work day and night to make sure the store shelves are stocked and ready for sales each and every day. They are the heroes of the road and must be recognized and appreciated or we are doomed to see them dwindle in numbers, leading to even more expensive transportation prices.
Years ago, when I was brokering loads from California to the Southeast, I had a favorite shipper. I moved two refrigerated loads a week to Atlanta for a small bakery operation. I never had trouble finding a carrier to take the loads. In fact, I had drivers call to see if those specific bakery loads were available and even had a few wait a day or two until they could take a load of pastries.
I assumed drivers liked the loads because they were one pick – one drop loads that were easy to haul, as they were very light weight. I could cover those loads for less per mile rates than just about any other loads available. That small shipper almost always paid the lowest rates around – often $100-$200 less than the going rate.
One day I asked a driver why they liked these loads so much. The driver gave me an answer that I have never forgotten. He told me that they treated the drivers very well and gave each one a case of their confectionary creations. They asked that they take good care of the load and deliver it in good order. The drivers were always appreciative and I never remembered a claim on any of those loads. I have often reflected on that shipper.
An inexpensive box of pastries was a genius move that spoke well of the bakery. I am sure their employees were also well taken care of in that kind of culture. They gained so much just by being decent to the drivers and sharing a box of goodies with them. In turn, their loads were well taken care of and they saved on their transportation costs.
Those pastries teach a great lesson. Treat people well and they will give you better service. Be decent and they will go out of their way to make sure your loads are protected. I have heard many good and bad stories of drivers’ treatment on the docks. The shippers and receivers who take good care of and appreciate the drivers will always do better.
In the produce world this is even more important, as the drivers must take extra care when handling perishable products. Take time to talk to the drivers and give them the information they need to take care of the product loaded into their trailers. Drivers are key and we must take care of them and recognize their role in this amazing supply chain. God bless the drivers!
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Kenny Lund graduated from Loyola Marymount University with a degree in Business Administration and managed the refrigerated transportation division in Los Angeles for eight years, before shifting full-time into managing the Information and Technology Department in 1997; becoming the Vice President of the department in 2002. Lund was promoted to Vice President – Support Operations in 2005. In 2014, Kenny, in the position of VP of ALC Logistics, began working with that division of ALC to sell their software solution (TMS). In 2019, Lund was promoted to Executive Vice President of ALC Logistics.
U.S. imports of organic fresh produce from Mexico and Peru are growing fast, U.S. Department of Agriculture trade numbers reveal.
U.S. trade statistics from September 2020 through August 2021 showed Mexican organic avocados topped all organic produce exports to the U.S. in value for the most recent 12-month period.
U.S. imports of Mexican organic avocados totaled $150.8 million from September 2020 to August 2021, up 23% from a year ago and up 29% from two years ago.
Running a close second, U.S. imports of Mexican organic blueberries totaled $143.8 million in 2020-21, up 55% from a year ago and almost three times as much as $50 million two years ago.
Mexico’s organic banana shipments to the U.S. totaled $83.3 million, up 10% from $77.8 million in 2020 and more than 60% higher than two years ago.
U.S. imports of Mexican organic greenhouse bell peppers have exploded in the past five years, rising from $13.3 million in 2016 to $81.5 million in 2021.
Meanwhile, U.S. imports of Mexican organic mangoes rose from just $8 million in 2016 to more than $45 million in 2021, according to the USDA.
U.S. imports of Mexican organic squash totaled $19 million in 2021, up from less than $1 million in 2017.
Mexican organic lemons shipments to the U.S. totaled $7.6 million in 2021, up 18% from last year and nearly three times more than $2.8 million in 2018.
Organic fresh strawberry shipments to the U.S. totaled more than $2 million in 2021, up from zero in 2020.
Peru’s blues
Peru also has been rising fast as a supplier of organic produce.
U.S. imports of Peruvian blueberries totaled $64.7 million in 2021, up 14% from last year and more than twice the value of two years ago.
U.S. imports of Peruvian organic bananas totaled $38.8 million in 2021, down 6% from 2020.
Peruvian organic ginger shipment to the U.S. totaled $29.4 million, up 47% from 2020 and more than twice 2019 level of $12.8 million.
By Nora Trueblood, ALC MarCom
Every year we read about the generosity of the produce industry, whether it is donating salad bars to schools, providing extras to the farm workers in the fields, or continuing to support efforts like Navidad en el Barrio. Even after the past two challenging years with COVID-19, and supply chain disruptions, giving is still taking place.
According to Keith Curtis, founder and president of The Curtis Group, and featured in the digital issue of the Daily Press, “I believe that 2021 will be noteworthy. Not because donors have reached their max, but because we must and will continue to dig deep to support the critical work of our nonprofit partners.”
Imagine, if you will, donations pouring into a warehouse in Bell, CA, where all of the product is palletized, organized and then distributed to over 27 different agencies, from San Diego to Riverside, to Pasadena and downtown LA. Almost all of the donors that gave to Navidad en el Barrio for the 2021 effort have donated before, but there were new companies that jumped in, as well. The challenge this year was that companies were feeling the stress of meeting retail orders before they could even consider donating to a non-profit.
Fortunately, Navidad en el Barrio was the recipient of donations from Randall Farms (in cooperation with Tyson Foods), who gave frozen chicken to every family, Wada Farms along with the Allen Lund Company provided a full truckload of Idaho potatoes, Grimmway Farms provided carrots for every family, and Taylor Farms sent bagged lettuce. Also included in the grocery bags were apples from Sage Fruit and FirstFruits Farms, blueberry applesauce from Crunch Pak, avocados from Mission Foods, and a full truckload of Halos, oranges and lemons donated by Wonderful Citrus. For the second year tortillas were donated by the Santa Fe Tortilla Co.(this donation was transported from Little Rock, AK to Southern California). A new donor this year was PepsiCo – who kindly added snack items to many bags. And speaking of bags, our local Target, in La Canada Flintridge, donated 1,000 of their Target bags which were used at the Our Lady of Guadalupe distribution site.
One of the largest donor’s year in and year out is Coca-Cola. This year there were three truckloads of product from both Northern and Southern California, including water, tea and juice. Other regulars with NEEB included Cacique Inc. and Cardenas Markets(both under the direction of Ana Cardenas, an angel to NEEB), who provided cheese, rice and chorizo. Finally, Northgate Market included tomato sauce, as they do, every year.
I am proud that the Allen Lund Company has continued to support Navidad en el Barrio, along with many other well-deserving non-profits. For NEEB we coordinated the transportation to the warehouse, provided logistical support in the multi-pick loads from grower/shippers and had volunteer manpower throughout the day of distribution at the main warehouse. Additionally, there were ALC folks at the Society of St. Vincent de Paul, Catholic Charities/Downtown LA, and Our Lady of Guadalupe, distributing bags to families. Overall 12,500 families were recipients of two full bags of groceries. A mighty effort for a wonderful cause. We are already looking forward to 2022, and Navidad en el Barrio would like to increase the give to 15,000 families! So, while we wish there were not the need, this amazing group of donors continue to make sure more families can enjoy a happy Christmas.
From the Allen Lund Company to all of you – Merry Christmas.
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Nora Trueblood began her career with ALC in 2002 as Director of Marketing & Communications. Prior to joining the company, Trueblood worked as the event manager with the Montrose Arts Council and Alpine Dance in Montrose, CO., had her own production and event planning company, and spent 7 years with Lorimar Television.
The American Transportation Research Institute, the trucking industry’s not-for-profit research organization, released its 17th annual Top Industry Issues report, identifying a number of the industry’s key concerns including the driver shortage, driver retention, driver compensation, lawsuit abuse reform, truck parking and for the first time, the shortage of diesel technicians.
Nearly 25 percent of the survey respondents were professional truck drivers and among driver respondents, Driver Compensation and Truck Parking tied for the number one industry concern. Detention / Delay at Customer Facilities was ranked by drivers as their second most pressing concern.
“The ATRI list of top industry issues provides a critical snapshot of the challenges impacting our industry at any given moment,” said ATA Chair Sherri Garner Brumbaugh, president and CEO of Garner Trucking, “and this year is no exception as supply chain constraints dominate the nation’s headlines. ATRI’s annual analysis not only captures the industry’s sentiment on the criticality of each of these issues but also maps out a course for addressing each through the stakeholder-ranked strategies.”
For the fifth year in a row, the Driver Shortage topped the list of industry concerns, garnering more than four times as many first-place votes as the number two issue, Driver Retention. Further reflecting the industry’s workforce challenges, Driver Compensation was ranked third overall. Lawsuit Abuse Reform rose three spots this year to take the number four spot and the lack of available Truck Parking rounded out the top five industry concerns. The Diesel Technician Shortage made the top-10 list for the first time this year, as the 10th ranked most critical issue in the industry.
More than 2,500 trucking industry stakeholders participated in this year’s survey, including motor carriers, drivers, industry suppliers, driver trainers, law enforcement, and others.
“This year’s large response shows just how serious our industry is about identifying the most critical concerns and more importantly, figuring out how we collectively deal with each issue,” said ATRI President and COO Rebecca Brewster.
“It really is no surprise that truck driver-related issues – notably the driver shortage and driver retention – ranked so high on the survey. Coming out of the pandemic, with the increased demand for goods and other pressures on the supply chain, getting and keeping drivers has been a real challenge industrywide,” Brewster said. “We also see the impacts of the current supply chain crunch in how highly issues like driver compensation, truck parking, infrastructure and driver detention ranked on the list.”
The complete results of the annual survey were released as part of 2021 American Trucking Associations’ Management Conference and Exhibition. The full report can be found at ATRI’s website.
Imports of agricultural products to the U.S. totaled $32.743 billion in the first half of 2021, registering an increase of 8 percent when compared to the same time period as the previous year.
Of this, $1.229 billion were imported from Peru, registering an increase of 3 percent when compared to 2020, as reported by Agraria.
Peru remained the fourth largest food supplier in the U.S. market, only surpassed by Mexico (36 percent), Canada (11 percent), and Chile (5 percent).
The main Peruvian products imported by the U.S. in the semester were grapes (35 percent share), asparagus (9 percent share), mango (8 percent share) and blueberries (5 percent share).
In addition to these, it’s worth mentioning shipments of ginger (2 percent share) and onion (2 percent share), which have been very well received in the North American market.
U.S. grape imports totaled 584,056 tons with a value of $1.733 billion in the first half. When compared to 2020, the volume remained similar, and the value showed a growth of 6 percent.
Peru consolidated itself as the third largest supplier of grapes during this period with a 24 percent share, behind Chile with a 44 percent share and Mexico with 30 percent.
Asparagus imports into the U.S. reached 171,231 tons with a value of $397 million, 16 percent more in volume and 7 percent more in value when compared to 2020.
Peru shipped 35,593 tons with a value of $115 million, 19 percent more in volume and 1 percent more in value when compared to 2020. Peru remained the second largest supplier with a 21 percent share, behind Mexico with a 78 percent share.
Mango imports in the North American market reached 323,256 tons with a value of $420 million, 5 percent more in volume and 13 percent more in value when compared to 2020. Peru shipped 64,916 tons with a value of $93 million, 9 percent less in volume and 1 percent less in value compared to 2020.
Despite the result, the country consolidated itself as the second largest mango supplier, with a 20 percent share, after Mexico with a 66 percent share.
Blueberry imports totaled 112,746 tons with a value of $754 million. Compared to 2020, the volume had a growth of 25 percent, and the value showed an increase of 42 percent.
Peru shipped 10,421 tons with a value of $62 million, 6 percent more in volume and 13 percent more in value compared to the previous year. Peru positioned itself as the third largest supplier in the period, with a 9 percent share.
The first and second places in the top of suppliers were occupied by Mexico, with 44 percent share, and Chile, with a 27 percent share.
Ginger imports in the U.S. reached 54,766 tons with a value of $91 million, 2 percent less in volume and 15 percent more in value compared to 2020. Peru supplied 9,178 tons with a value of $27 million, 27 percent more in volume and 42 percent more in value compared to the previous year.
Thanks to this result, the country was the second largest supplier of ginger, with a 17 percent share, after China, which ranked first with 63 percent share.
Onion imports reached 348,570 tons with a value of $258 million, 21 percent more in volume and 15 percent more in value compared to 2020. Peru supplied 40,787 tons with a value of $24 million, 47 percent more in volume and 76 percent more in value compared to the previous year.
Thanks to the good reception, the country began to position itself as the second largest supplier of the vegetable, with a 12 percent share, only behind Mexico, with an 81 percent share.
By Collin Payne, ALC Denver
As we enter a recovery period from the COVID-19 “recession” the transportation industry is showing signs of strength. The threat of the virus has been reduced across the country, but inflation has been caused by rising commodity prices and record-level government spending.
Crude oil 1-year price change- $41.43>$81.35Coal 1-year price change – $60.74>$149.30Aluminum 1-year price change – $1944>$2640Apples 1-year price change – $102>$122U.S. dollars in circulation:October 2010 – $960,369,000,000October 2015 – $1,391,429,000,000October 2020 – $2,040,201,000,000October 2021 – $2,202,506,000,000
The re-opening of the economy has triggered a supply shortage in labor and productive commodities – microchips, lumber, aluminum, apples, lettuce. Due to labor shortages, the market has seen rapid increases in low-wage paying positions, further shrinking the number of drivers on the road.
Registered trucks drove 304.9 billion miles in 2019, carrying almost 12 billion tons of freight – making up 72.5% of the total tonnage shipped domestically. Why would you spend 10 days on the road driving from Washington to Pennsylvania and back, when you can find a paying job with benefits close to home?
This has had a domino effect on the supply chain industry, forcing shippers to seek expensive and/or creative solutions. When will the worst of inflation begin and when will we see the end of rising prices?
The average inflation rate of the United States over the last 10 years is 1.8% – in April 2021 the inflation rate rose above 5% and is currently 6.2%. Currently, the price of produce per pound is up 7.3% from early 2020, and the two-year outlook shows fresh produce transportation nearly doubling. There is a general consensus that we are nearing the peak of inflation rates, and this will continue through 2022.
With several trillions of dollars being added to circulation since April 2020 and no plans insight to stop, there are no guarantees of reduction from current inflation rates.
Carriers will see a direct increase in the price of equipment, tractor/trailer repairs, fuel, insurance, and meals. Shippers will see a direct increase in the cost of labor, transportation costs, and raw material costs.
We are in the position to see inflation happen from a birds-eye-view, giving us a special position to take. Allen Lund Company’s duty is to communicate this issue to our shippers and carriers to ensure they are properly prepared for the continued rise in prices.
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Collin Payne is a transportation broker in ALC Denver and has been with ALC over 2 ½ years. Collin graduated from Texas A&M University with a BS in University Studies of Global Arts, Planning, Design and Construction Concentration.