Archive For The “News” Category
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 The conventions that take place throughout the year have all taken place virtually and the in-person handshakes have been replaced by video chat requests.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
Containerized cargo business at Port Manatee in Palmetto, FL has rose at a record pace, in part due to fruit imports.
The port posted a 55 percent increase as the fiscal year ended in September, with an all-time high of 88,466 twenty-foot equivalent container units (TEUs). The previous fiscal year saw 57,239 TEUs, which was also a huge increase, at almost a 50 percent increase.
“With container throughput more than doubling over the course of just two years, Port Manatee is increasingly fulfilling regional consumer demands for goods ranging from fresh produce to appliances,” Carlos Buqueras, Port Manatee’s executive director, said in a news release. “As our dockside container yard expansion project advances toward mid-2021 completion, Port Manatee is positioning to continue to efficiently handle rapidly growing cargo volumes.”
The container yard expansion will nearly double the current 10-acre paved area.
The port’s container trade is being driven by growth of World Direct Shipping, which imports produce and other goods from Mexico since 2014, and Fresh Del Monte Produce Co., which has been importing fruit from Latin America for decades through the port.
Priscilla Whisenant Trace, chairwoman of the Manatee County Port Authority, said the port’s latest cargo cargo increases, happened as the port implemented enhanced health and safety measures because of the COVID-19 pandemic.
“We commend the men and women who are maintaining essential operations at Port Manatee, serving consumers of Southwest Florida and beyond,” she said in the release. “Sustained growth of Port Manatee’s container trade is a testament to success of our diverse strategy, with key infrastructure investments poised to facilitate even greater cargo activity and deliver still more positive socioeconomic impacts throughout our region.”
September spot refrigerated truckload rates hit an all-time high, according to Portland, Ore.-based DAT Freight & Analytics.
“We’re seeing strong volumes across equipment types as the economy continues to recover, particularly in areas related to consumer spending,” Ken Adamo, chief of analytics at DAT, said in the release. “Spot market rates just keep climbing as companies turn to the spot market to help them manage imbalances in their supply chains.”
Spot reefer volumes fell for the third month in a row, down 1.3 percent month over month, according to DAT. However, DAT said the national average reefer load-to-truck ratio was 9.7 in September, more than five times higher than April’s record low of 1.7 loads per truck.
The DAT Truckload Volume Index, a measure of dry van, reefer and flatbed loads moved by truckload carriers, rose 6.1 percent from last month and was 13 percent higher than September 2019.
The national average spot reefer rate was $2.57 per mile, up 13 cents compared to August, and 41 cents higher year-over-year.
DAT’s outlook indicated:
- Grocery store chains are adjusting their lean-inventory strategies and have begun stockpiling for a possible surge of COVID-19 cases in the fall and winter;
- The holiday shopping season will start earlier and last longer to accommodate shifting demand from consumers;
- The accelerated inventory build-ups add yet another dimension to an already disjointed freight market, as manufacturers work to avoid the inventory failures seen in March this year;
- DAT’s September FMIC Pulse Signal report forecasts that year-over-year changes in active contract rates will continue to remain below 2019 levels through the end of the year, but average contract rates forecast to increase in the first half of 2021; and
- The amount of freight moving on the spot market in August increased by 80 percent year over year.
An estimated that around 20,000 acres of banana plantations have been lost in Honduras due to flooding from Hurricane Eta. The estimate would represent about half of the total acres in the Central American country, which bore much of the brunt of the recent storm.
The storm came amid one of the most severe Atlantic hurricane seasons on record and caused widespread damage to the region. One banana grower estimated it was the largest damage in history for bananas. It is estimated at least 16,000 direct jobs are at risk in the Honduran banana industry and the volume of fruit exported will decrease. The most affected areas in the country is Olanchito, which sits along the Aguán River.
One of the banks of the river overflowed and resulted in a total loss for the Standard Fruit Company of 4950 acres of bananas. The Agriculture Ministry said that there was also severe damage to the production of corn, sugar, and rice. With dropping flood waters hundreds of thousands of households, businesses and farmers across the country are beginning to count the damage.
Between September 2019 through August U.S. imports of fresh vegetables were up 11 percent, according to the USDA.
While fresh vegetable imports were up by double-digit percentages, the USDA reported fresh and frozen fruit imports gained just 2 percent compared with the previous year.
Among vegetables with big import gains, the USDA noted fresh garlic imports for the year ending in August were up 58 percent — the result of a COVID-19 immunity buying frenzy. Other double digit gains were noted for tomatoes, squash, cucumbers, potatoes and beans.
Fast-rising imports of fruit commodities were noted for mangoes (up 15 percent) and kiwifruit (up 19 percent),
By fresh commodities (except as noted), U.S. imports from September 2019 through August, with percent change compared with the previous year, are:
- Berries: $2.93 billion, up 5%;
- Tomatoes: $2.68 billion, up 17%;
- Avocados: $2.59 billion, down 2%;
- Fresh or frozen bananas/plantains: $2.45 billion, up 2%;
- Peppers: $1.73 billion, up 4%;
- Grapes: $1.67 billion: up 4%;
- Citrus: $1.30 billion, up 6%;
- Fresh or frozen strawberries: $1.05 billion, up 5%;
- Cucumbers: $894.9 million, up 10%;
- Fresh or frozen pineapples: $661.2 million, up 3%;
- Asparagus: $653 million, down 5%;
- Mangoes: $633.4 million, up 15%;
- Melons: $608.3 million, down 10%;
- Squash: $473.99 million, up 27%;
- Onions: $456.4 million, up 4%;
- Lettuce: $374.4 million, up 9%;
- Cauliflower and broccoli: $351.7 million, up 6%;
- Potatoes: $259.1 million, up 31%;
- Garlic: $234.8 million, up 58%;
- Beans: $165.45 million, up 15%;
- Kiwifruit: $159.88 million, up 19%;
- Apples: $153.6 million: down 27%; and
- Pears: $109.3 million, down 6%.
By Steve Hull, Manager, ALC, Portland
What a strange year it’s been so far in 2020, with so many changes and challenges in the perishables space! One item, that could greatly affect the business models and proprietary information of grower/shippers, has gone under the radar.
In a nutshell, a minority of motor carriers and carrier trade associations (such as OOIDA) are pushing the Federal Motor Carrier Safety Administration (FMCSA) to update the terms and enforcement of an existing section of federal code relating to freight costs paid between grower/shippers, brokers, and carriers. 49 CFR 371.3(c) was initially written back in the days of deregulation in 1980, and requires brokers to allow carriers to view the rates paid by the transportation buyer to the broker.
In practical terms, however, carriers have rarely asked to view that information. The majority of renewed interest in the regulation came about in Q2 of this year. Coinciding with historically low shipping volumes nationwide, normal supply and demand market forces caused a sharp fall in freight rates to carriers. Basically, a lack of supply (not as many available loads) caused a decrease in demand (lower freight rates). Carriers in turn, wrongly accused brokers of price gouging and other unscrupulous business tactics.
How does this all apply to grower/shippers? Just like forklifts, pallets, and packing material – the linehaul freight cost of getting your goods to your customer is something you purchase out of your operational budget. When the code was written back in the 80’s, it was more normal for carriers to pay a ‘commission’ to the broker. But now, the way most freight transactions occur has changed.
Per an article about this topic on Overdrive Online, Jason Craig, of C.H. Robinson stated on a recent listening session with the FMCSA, many brokers treat the contracts with shippers and carriers, as “separate transactions” and that “the price paid by the shipper does not affect the price paid to the carrier any longer.”
If changes are made to the code, the proprietary pricing you pay to a broker could be mandated to be given to a motor carrier. For every load. In essence, your buying power and negotiated pricing would be laid bare for all to see.
An important point as well, you could be barred from inserting language into any shipper-broker contract to keep your pricing from being disclosed. A dire scenario would be one that causes you to change your business practices.
You could even decide to end yearly, or quarterly, RFPs to brokers! All because a few carriers didn’t like the rates they were being offered by some brokers for a few weeks in early 2020. (And to get you up to speed on rates in Q3 and Q4, per DAT, there are many lanes that are seeing record high truck rates being paid to carriers.)
What can you do? You can read up on these broker carrier issues here. And more importantly, FMCSA is still accepting comments from anyone interested in voicing their opinion. The comment period is open until November 18, 2020.
You can use this link to submit your thoughts, comments, and concerns. You can also reach out to your freight broker, to discuss how any changes would affect your specific business.
Steve Hull is manager of the Portland office and has been with the Allen Lund Company for 24 years. Hull is a graduate of the University of Southern California completing a dual major in political science and U.S. history.