Archive For The “News” Category
U.S. surging imports are fueling record high freight costs and logjams at seaports, but transportation executives expect the rally to lose steam with a second wave of Covid-19 restrictions.
Reuters news agency reports container shipping companies got stung late last year and early this year when the pandemic halted trade around the world, and they question whether the U.S. import boom can be sustained.
“Let’s not get carried away,” Rolf Habben Jansen, chief executive of Germany’s Hapag Lloyd, was quoted as telling reporters. “This is just a spike that no one has foreseen in an unusual period. There will be a correction to that.”
U.S. consumer confidence ticked up in September, when retail sales accelerated. Still, consumers are eating through savings, layoffs are mounting and the country just set a record for new COVID-19 infections.
“Everything depends on the demand and how the second wave of COVID affects the world economy,” Aristides Pittas, CEO of shipping company Euroseas, said at a Capital Link virtual event.
In recent weeks, the cost of transporting goods from Asia to the United States – one of the world’s biggest retail markets – topped $4,500 per 40-foot container unit (FEU), the highest recorded level, data from S&P Global Platts Containers showed.
“We are sold out. The ships are 100 percent full. The containers are 100 percent full. You can’t get a container,” Jeremy Nixon, CEO of Japanese container group Ocean Network Express (ONE), said at a recent International Chamber of Shipping virtual event.
Inland exporters in the U.S. and several European countries, as well as Asia are being affected by a container shortage, reports Seatrade Maritime News.
U.S. Federal Maritime Commission (FMC) chairman Michael Khouri emphasized the issue of shipping lines not supplying containers to agricultural exporters inland in the U.S.
“Some ocean carriers, not all, have stated that they will no longer reposition empty containers to the U.S. interior agricultural areas. Instead, they are expediting empties back to Asia,” he said. “This abandonment of a significant U.S. export industry, the American agricultural industry, is shutting them out of global markets,” he told the virtual Global Maritime Conference.
The FMC is looking at possible actions it could take.
“We are looking into all potential responsive actions, including a review of whether such ocean carriers’ actions are in full compliance with the Shipping Act and more specifically the various “Prohibited Acts” sections of the Act,” said Chairman Khouri.
Research by FraunhoferCML and Container xChange shows the shortage is being exacerbated by the lengthy periods empty boxes spend in depots, an average of 45 days. In China and the U.S., the number of days empty containers spend in depots is considerably higher at 61 to 66 days.
Meanwhile, Hapag-Lloyd, a global leader in container shipping, has stopped accepting 40- foot reefer container booking for empty pick-up from depots in Germany, Austria, Switzerland, Hungary and the Czech Republic until the end of the year. In Hamburg, it has also stopped container booking for empty pick-up for 40-foot GP units until the end of the year.
“Our aim is to support all confirmed export bookings but it might come to booking cancellations in individual cases.” “We do our utmost to avoid such cases and to serve all our customers as best as possible. We expect the situation to remain extremely tight over the next weeks,” Hapag-Lloyd said in a customer advisory.
Imports of fresh produce remain strong as container volumes at PhilaPort’s Packer Avenue Marine Terminals are up 5 percent, maintaining an eight-month surge.
The increase at the Port of Philadelphia leaves it as the only East Coast port to grow cargo volumes during the COVID-19 pandemic, according to a news release.
“We are extremely proud of our results,” Jeff Theobald, executive director and CEO of PhilaPort, said in the release. “This proves that the infrastructure work we have done, in conjunction with the hard work of our longshoremen, terminal operator, Greenwich Terminals, and commercial support from Holt Logistics, is already paying off.”
The Packer Avenue Maine Terminal handles a variety of cargoes, but is known for handling and distributing refrigerated cargoes.
Leo Holt, president of Holt Logistics, said the company is on track to reach double-digit growth in refrigerated cargo volume this year.
“Consumer demand for fresh fruits and vegetables remains at an all-time high,” Holt said. “We remain ready to meet this demand and provide a safe and efficient supply chain for our clients.”
A project to deepen the Delaware River main channel is complete.
“And now that we have this and other major infrastructure improvements in place, developers are taking notice.” Sean Mahoney, director of marketing at the port, said. “They are continuing their investments in new distribution warehousing in South Jersey and Lehigh Valley.”
More fresh potatoes are being purchased by consumers during the COVID-19 pandemic, boosting sales in most fresh categories and pushing sales of all potato products, including frozen, to five-year records.
Potatoes USA’s latest retail report charts the category’s growth from July through September as consumers continue to spend more at retail and less on food eaten outside of the home.
“Total store potato sales increased by 13.6 percent in dollar sales and 10.6 percent in volume sales, compared to the same time frame in 2019,” according to a Potatoes USA news release. “These sales levels are also the highest they have been for the past five years.”
The sales and volume information comes from Chicago research firm IRI.
The fresh category saw growth in numerous categories in the three-month period:
- Overall fresh sales are up 16.4 percent in terms of dollars, and 10.6 percent in volume, despite retail price increases;
- Medley, petite and yellow purchases had volume increases of more than 20 percent;
- Five-pound bags still lead as the most-popular size, but 10-pound bags saw the largest increases, with 22 percent higher dollar sales and 20.4 percent volume increase; and
- Bags larger than 10 pounds grew in dollar sales, but were the only category to fall in volume sales, at about 9 percent.
Frozen potatoes had the largest growth from the same three-month period in 2019, with almost 24 percent higher sales in dollars and 20 percent higher volumes. Deli sides is the only category at retail that declined compared to 2019, but the decline had slowed compared to the previous three-month period, according to the IRI numbers from Potatoes USA.
Imported Mexican produce shipments to the U.S. increased by double-digits in the second quarter of 2020, according to a transportation report from the USDA.
The Mexico Transport Cost Indicator Report reveals second quarter total reported shipments of fruits and vegetables from Mexico were 2.96 million tons, an 11 percent increase compared with the second quarter of 2019.
The total of the top five commodities shipped from Mexico (figured on an annual basis: tomatoes, peppers, cucumbers, avocados and squash) increased by 31,000 tons, or 6 percent.
Imported seedless watermelons entering the U.S. in the second quarter topped all fresh produce commodities for the quarter, with 297,000 tons shipped. However, that was down 19 percent from same quarter in 2019.
Truck rates
Truck rates for shipments of 501 miles to 1,500 miles from the Arizona border crossings averaged $2.55 per mile, up 1 percent quarter to quarter, but down 6 percent compared with the second quarter a year ago.
Rates for shipments of 501 miles to 1,500 miles from the Texas border crossings averaged $2.25 per mile, down by 10 percent quarter to quarter and down by 1 percent year to year.
Diesel fuel prices for border crossings through Texas averaged $2.21 per gallon for the quarter, compared with $2.60 per gallon for crossings through Arizona.
The North Carolina State Port Authority has received a $16 million grant from the U.S. Department of Transportation to help pay for upgrades to triple the Port of Wilmington’s container capacity.
The USDOT’s Maritime Administration’s grant will support development of a new container gate complex at the port, according to a news release.
The overall project is part of a five-year, $200 million container expansion plan. The current container gate (channel for container trucks transporting cargo) isn’t adequate for forecasted container volumes, but when the expansion is complete, it will more than triple the container capacity. Inbound and outbound lanes for trucks are increasing, and a container operations building will be constructed.
The $16-million-grant is the largest single grant awarded to North Carolina ports yet, Brian Clark, chief operating officer.
“Improving the container gate has long been part of our infrastructure improvements plan at the Port of Wilmington,” he said. “We recognized early on the need for a more modern gate. Our terminal in Wilmington is known for its fast truck turn times and this modern complex will help us maintain the speed our customers expect.”
The project includes a new truck gate interchange with technology to improve safety and efficiency, according to the release.
There has been double-digit increases in demand for fresh produce at supermarkets, and the USDA projects that retail prices for fruits and vegetables will come in below historical averages.
The USDA reports, “Consumer Price Index growth for fruits and vegetables has been lower than the 20-year average of 2 percent,” according to its October 23rd Food Price Outlook.
Current projections indicate retail prices will continue to grow slower than the historical average.
“This aggregate decline is driven by a 0.5 percentdrop in the price of fresh vegetables,” the USDA reports. No growth and a 0.1 percent increase in the price of fresh fruits and processed fruits and vegetables only partially offset the decline of fresh vegetables, the agency said.
So far in 2020, compared to 2019, overall grocery prices have increased 3.4 percent, while restaurant prices have climbed 2.8 percent. Forecast for the full year, overall 2020 grocery prices are expected to increase between 2.5 percent and 3.5 percent, while restaurant prices are projected to rise between 2 percent and 3 percent.
For 2021, the USDA said overall grocery prices will increase between 1 percent and 2 percent, while restaurant prices are expected to increase between 2 percent and 3 percent.
By Braden Goodere
Business Development Manager, ALC San Francisco
Resilience is an important part of this industry and this year is no exception.
I believe this quote by John Rockefeller perfectly describes the current state of our industry. “If you want to succeed, you should strike out on new paths, rather than travel the work paths of accepted success.”
The way growers, shippers, retailers, and transportation providers deal with ever constant change, have determined their success in the new “norm” we live in today.
Sales obviously has had to adapt, as well. The conventions that take place throughout the year have all taken place virtually and the in-person handshakes have been replaced by video chat requests. The most common word used to describe this year’s market is “uncertain” and with many clients working from home they depend on us more than ever to not just provide fair rates but to educate them about what we are seeing and hearing in the market.
Although rates started out lower than expected for summer, freight rates increased quickly and the usual decrease after the 4th of July never happened. This left many clients scrambling, looking to secure capacity for their supply chain.
Our team at Allen Lund Company stood by our clients, growing year-over-year and absorbing costs on a percentage of our freight. Much of the success in expanding our base over the past seven months is due to the hardworking, essential employees throughout our offices working diligently with our clients to navigate the road ahead.
As we prepare for the holidays, our industry and companies’ resilience will once again be put to the test. California outbound freight is now seeing dry van rates surpass the refrigerated freight market. Many of the large cultural festivals that occur during this time are not taking place in person, however, we still anticipate drivers continuing to take time off to spend time with family.
Keeping an open dialogue with the companies we work with allows them to keep surprises to a minimum and in turn, help them service their own customers and consumers. While the upcoming holidays will be different for everyone, we know that our customers depend on and appreciate the resilience of our team.
Braden Goodere began working for the Allen Lund Company in September of 2013 as a business development specialist. In September 2019, he was promoted to business development manager. Goodere joined the company with many years of experience in agriculture, having grown up on a ranch. He attended Cal Poly-SLO and received a BS in agribusiness finance.
Have you ever eaten a hot dog that tastes like a carrot? Neither have we, but that’s about to change.
Bolthouse Farms of Bakersfield, CA has developed a new lineup of “carrot swaps.”
The name of the line is Wunderoots, and it includes Carrot Dogs, Carrot Fettuccine and Riced Carrot.
Both the Carrot Rice and Carrot Fettuccine kits can be prepared on a stove top or in the microwave. Carrot Dogs are designed to be grilled, according to a news release.
Bolthouse recommends merchandising all items from the line in the value-added section of the produce department. The Wunderoots items are expected to debut in spring 2021.
Carrot Dogs may be the most unusual the bunch. In creating the hot dog alternative, the company shaves carrots into the shape of a traditional hot dog, brines them for a smoky flavor, packages them and puts them through high pressure processing so they have a longer shelf life.
Bolthouse has three flavors of the Carrot Dog: Classic American, Chorizo and Sweet Italian.
While the product still tastes like a carrot, it is seasoned with spices traditionally not used as much with produce, and it has the texture of a hot dog.
Bolthouse contends it’s just the beginning of finding kind of new and creative ways to make, in this case carrots, but a broader mission on that is really about making plants more fun, more exciting.
The company expresses optimism about the Riced Carrot product, which will be available with sauces including Sesame Stir Fry, Green Chile and Yellow Coconut Curry.
Consumers are used to kind of vegetable noodles, but this vegetable rice is much better nutritionally than eating white rice.
The Carrot Fettuccine kits will be available with sauce options Marinara, Spicy Thai Basil and Red Coconut Curry.
The Allen Lund Company has committed to sponsorship and participation in Navidad en el Barrio, an organization established in 1972 by Danny Villanueva, former NFL player, to provide a healthy Christmas dinner to the most underserved families in Southern California. This will be ALC’s 16th year supporting this event. This year due to the pandemic, distributing Christmas dinners to 10,000 families is the goal with all of the proper protocols in place.
“We look forward to working with Navidad en el Barrio every year”, commented Nora Trueblood, director of marketing for the Allen Lund Company. “This year has been challenging to make sure that the warehouse and distribution processes all meet COVID-19 protocols but we will ensure that the communities of Southern California will have plentiful dinners to feed their families this Christmas.”
The Allen Lund Company coordinates transportation for perishables from growers to Southern California. Depending upon the size and location of the donation, ALC will combine products in the most efficient way to move to Los Angeles, where the donations are divided for the Christmas dinners.
Over the years, Grimmway Enterprises, Inc., Wada Farms Marketing Group, LLC, Duda Farm Fresh Foods, Mission Produce, Inc., Rainer Fruit Co., and so many other companies have joined ALC in the effort to give the least served in Southern California a proper Christmas dinner. Donations will be accepted the week of December 7th and the dinners distributed Saturday, December 12, 2020.
| If you have an interest in participating in this event contact Nora Trueblood at 800.475.5863 or if you would like to donate, click here. Donate |
About Allen Lund Company:
Specializing as a national third-party transportation broker with nationwide offices and over 550 employees, the Allen Lund Company works with shippers and carriers across the nation to arrange dry, refrigerated (specializing in produce), and flatbed freight; additionally, the Allen Lund Company has a logistics and software division, ALC Logistics, and an International Division licensed by the FMC as an OTI-NVOCC #019872NF. If you are interested in joining the Allen Lund Company team, please click here.
Established in 1976, the Allen Lund Company was recognized by Food Logistics magazine as a 2019 Top 3PL & Cold Storage Provider for TransKool Solutions, Logistics Tech Outlook for our software division ALC Logistics as a 2018 Top 10 Freight Management Solution Providers, 2018 Food Logistics’ Top 3PL & Cold Storage Providers list, 2017 Supply & Demand Chain Executive Top 100, 2017 Food Logistics 100+ Top Software and Tech Provider, a 2016 Top IT Provider by Inbound Logistics, 2015 Coca-Cola Challenger Carrier of the Year, 2015 Top Private Company in Los Angeles by the Los Angeles Business Journal, 2015 Top 100+ Software and Technology Providers, 2015 Top 100 Logistics IT Provider by Inbound Logistics, a 2014 Great Supply Chain Partner, and was placed in Transport Topics’ “2014 Top 25 Freight Brokerage Firms.” The company manages over 365,000 loads annually, and received the 2013 “Best in Cargo Security Award.” In 2011, the company received the TIA 3PL Samaritan Award, and NASTC (National Association of Small Trucking Companies) named Allen Lund Company the 2010 Best Broker of the Year. More information is available at allenlund.com