Posts Tagged “Keeping It Fresh”
By Brandon Demack, ALC McAllen
On the Saturday before Super Bowl Sunday, avocado imports from Mexico into America were put to a complete halt after threatening messages were sent to a United States plant safety inspector’s official phone.
The avocado industry is another victim of the turf battle between the cartels in the western parts of Michoacán and will put a strain on avocado imports into the United States for the foreseeable future. The U.S. health inspector was carrying out inspections in Michoacán when the threat was received, but luckily for consumers, it was the day before the Super Bowl so all shipments of avocados for Super Bowl parties and restaurants were already shipped and weren’t affected.
Avocados are considered “green gold” in Mexico, as it is a multibillion-dollar business and the industry even broke records in 2020 to become the world’s largest producer of “green gold.” Unfortunately, however, as the growth continues to rise, so does the threats from the nine identified cartels operating in the area.
In response to the issues going on with cartels, farmers have been starting to arm themselves and establish self-defense groups to combat this to the reluctance of Mexican President Andrés Manuel López Obrador. This violence and issues in Michoacán will hopefully subside sooner than later.
The U.S. responded to the threatening messages by putting more security measures in place for inspectors. On February 18, 2022, it was announced that the inspection of avocados in Michoacán would resume. The rapid response to the threat shows the importance of a working supply chain between Mexico and the U.S.
It would have been hard to fill the large gap left by the lack of avocados coming from Mexico. Mexico provides around 80% of avocados consumed in the U.S. and a longer ban would have drastically impacted the supply of avocados in the U.S. With the resumption of imports, consumers do not have to worry about a shortage or price hikes and can continue to enjoy avocados.
****
Brandon Demack has been with the Allen Lund Company since July 2011. He first started in the Dallas office and in March of 2019 he transferred to the McAllen office becoming the operations manager of produce. Demack attended the University of North Texas with a Bachelor of Science in Logistics and Supply Chain Management.
By Gerald Ebert, ALC Richmond
Is the severity of the “supply chain crisis” a direct result of the COVID pandemic? Probably.
Are 15 months of consecutive Year-Over-Year freight cost increases a direct result of COVID and the “supply chain crisis”? That question is not as easily answered.
Most of us in the freight business work in a right here and right now world. We win and lose looking into a crystal ball that has been very cloudy the last few years. We work hard to find commonalities with past trends to help give us even the slightest advantage.
Even with years of experience and more real-time data than ever before at our fingertips, every tight truck market is the “tightest we have ever seen”, while a loose truck market seems to add hours to every day.
As everything these days is a “crisis”, it is not uncommon to hear that the national reopening that followed the COVID shut down was the beginning of the current capacity “crisis.”
It’s true, that average truckload prices did increase approximately 80% from the end of the COVID shutdown through the close of 2020. This trend continued through 2021. Only as 2021 closed, did we see the Year-Over-Year gap shrink to reasonable comparisons.
With all that has happened since we found ourselves adjusting to a new and often unwelcome reality, it’s easy to forget that before The COVID Shutdown, The Great Reopening, The Workforce Shortage, The Supply Chain Crises, and Surging Inflation, there was January, February, and March of 2020.
I recall having numerous, maybe daily, conversations with colleagues in those three months in which we opined, “This the tightest market we have ever seen.” It wasn’t. In fact, it didn’t really come close in comparison to the capacity challenges we faced in June and July of 2018.
The industry, and those of us that work in it every day, were simply conditioned by an unusually long 24 to 26 month cycle of demand and rate decline. It is likely that the COVID pandemic was just an unpredictable pause of the inevitable rebound we are still dealing with today.
2022 is not showing any signs of a downward correction. Most are predicting mild 3-5% increases when compared to 2021. The reality is that we won’t know until the year concludes. That’s the way transportation works. Hindsight is crystal clear. The only thing crystal clear about the future in transportation is that it will be different than it was the previous year.
The market doesn’t recognize any calendar or bid cycle. It doesn’t show mercy for the unpredictable. When the market destroys your budget, it shouldn’t destroy solid relationships that have been built over years.
2021 proved, yet again, that any commodities market is measured by a simple supply and demand equation. From 2018 through 2019, that equation favored the shipper. For most of 2020 through today, and for the foreseeable right here and right now future, it has forced shippers to battle for capacity. Trusted resources and strong relationships have never been more important. That crystal clear hindsight view will verify those relationships.
****
Gerald Ebert began his career with Allen Lund Company as a transportation broker in the San Antonio office. In 1999, Ebert transferred to ALC Richmond and was promoted to the manager of the Richmond office in 2000.
By Derek Robinson, ALC Savannah
The Port of Savannah is continually breaking record after record, year after year, in both the import and export of goods, throughout the United States and worldwide.
While the United States is known primarily as an importer of goods, the Port of Savannah is known as the top exporting port for containerized agricultural goods. During FY2019, Savannah took that spot, accounting for 15.8% of exports and continues to grow every year. In the first five months of 2020, the port had already handled 593,195 TEU’s and ate up a 12.2% market share, once again exporting more containers than any port in the United States.
2021 certainly brought the phrase “supply chain” into daily conversations at the dinner table, water cooler, and evening news programs. The Port of Savannah has put a few things into play, in order to speed up all facets of the port and move agriculture goods in and out quicker. One of the biggest things to happen was the creation of “pop-up yards” that can handle an additional 500,000 containers throughout the year.
This improvement alone allows drivers to make 70 mile turns instead of 400 mile turns, which increases both daily driver numbers and the ability of drivers to get more home time every day. The Infrastructure Investment and Jobs Act has slated numerous projects to the port that will only continue to add efficiencies to keep the Port of Savannah in that #1 spot for generations to come!
We at the Allen Lund Company move countless loads of produce from the Savannah area daily. Many loads come as an import brought through the port, or from a Georgia farmer working tirelessly to bring you peaches, melons, or pecans.
****
Derek Robinson is a business development specialist in the Savannah office and has been with the Allen Lund Company since 2015. Robinson attended Savannah Technical College, specializing in Aviation Structural Mechanics.
It’s getting colder out, but you knew that already. So, as you don your parka, when you might once have used a windbreaker, we venture out to do one of the most human things we’ve come to know: get all our groceries in one swoop from the store!
Now, you may have a specific diet, you may be a super-foodie, or a junk-food-junkie(may Larry Groce have mercy on you)! Either way, we’re going to set out to get a balanced list of beverages, meats, grains, vegetables, nuts, and fruits. Maybe, you’ve noticed something a bit different this year? Fruits(among many other commodities) have gone up in price, year over year for decades. In this particular day and age, we’re also mixing in supply chain disruption, tougher seasons on our farmers, and an ever-increasing demand for healthier foods. According to the USDA, the top six fruits per price by weight are blackberries, raspberries, cherries, blueberries, apricots, and strawberries. For the purpose of this article, we’re going to focus on strawberries, as they meet the lowest price point and among the others aforementioned on this list, are the most commonly consumed by consumers and businesses.
But, what does it look like when you get to the store? In my personal experience, I couldn’t find strawberries anywhere at my local grocer for weeks. But, I found a quick fix that has become a staple for my household: frozen strawberries(and pretty much anything else I wanted to grab that I couldn’t find fresh). In fact, they had access to fruits that are almost never available fresh such as papaya, dragon fruit, passionfruit, acai berries, and much more!
Frozen fruit always comes in at a much more affordable price than its fresh counterparts. After taking my bag of frozen berries home, I discovered a second surprise: beautiful, vibrant, deep red, and delicious strawberries! It took some time to get used to thawing them out, but nine times out of ten, I have a superb batch of strawberries.
Frozen foods get a bad reputation for being processed; possibly having ingredients along the lines of “unnatural”. Throw this bias right out of the window! “Scientists from Leatherhead Food Research and the University of Chester, carried out 40 tests to measure nutrient levels in produce that had been sitting in a fridge for three days, compared to frozen equivalents. They found more beneficial nutrients overall in the frozen samples”. You may find this hard to believe, based on everything we’ve been taught growing up.
There’s a pretty big factor that comes into play for frozen fruit, that fresh fruit just can’t match! Here at the Allen Lund Company, we haul fresh produce daily, on tight schedules. Produce growers and farmers often pick fruit just before it’s ripe, to time it to ripen perfectly for delivery and consumption. The harvest comes in, then the clock starts counting down. If the produce doesn’t get from A to B in a certain amount of time, it’s likely going to be unfit to sell. So, eventually, a way around this schedule crunch was found: blast/instant quick-freezing fruits and vegetables. What’s the benefit you ask? Well, the freezing has a bit of a better schedule. Frozen fruits are picked at optimal ripeness and frozen immediately to preserve peak nutrition, flavor, and shelf life.
Having the ability to keep products at the perfect quality for double, triple, or greater shelf life allows growers to open a market for year-round sales, both in season and out of season. Consumers see huge savings on purchasing these goods, but where it really comes into play is supply chain management. Plus, keeping a bag or two of frozen goodies in the freezer comes into play for when you take a nasty spill on the way to the office!
More and more investments have been made in efforts to perfect packaging, create/lease cold storage centers, and erase supply gaps during off seasons for businesses. The proof is in the pudding, or should I say, the sorbet. Studies show that the Global Frozen Fruit market is a $4.65-billion-dollar industry, expected to grow at 1-2% annually CAGR to reach a peak of $5 billion dollars in 2026.
Consumers are steadily following this trend as their purchases shift. Many trade shows now include frozen goods being marketed, displayed, and packaged. Every year as the category expands, growers are getting better, and better at retaining color, nutrients, taste, and lower prices.
The next time you’re hankering for some produce and feeling adventurous, check out the frozen section. You’ll find that no matter what time of the year, you’ll always be able to afford juicy, nutritious, and gorgeous strawberries.
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!
****
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.
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.
****
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.
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.
****
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.
By Karman Eckelbarger, ALC Orlando
Overseas produce from South America could be facing delays due to the flood of cargo ships invading the ports. These port delays and supply chain labor challenges are going to affect the delivery of produce across the east coast. This is especially concerning for delays that could jeopardize the shelf life of berries, citrus, and light density produce that has shorter shelf lives than higher density foods. The demand for overseas goods is on the rise, whilst the availability of drivers and vehicles domestically is plummeting. This can mean higher prices for produce as companies switch or seek out other methods for getting fresh produce into stores. It also means that the transportation and logistics of getting produce delivered on time is going to be increasingly challenging.
Ports are swelled with delayed ships and produce delivery is obstructed as labor and transportation agencies face shortages.
In anticipation of the holiday season rapidly approaching, ports are preparing for the peak season as an influx of ships heads to the east and west coast. However, many of those ships will be surprised to reach those ports and face record-setting delays for the year. As ships flood the west coast, transportation companies facing labor shortages and a drought of available trucks will have to delay unloading the cargo. This is in addition to the unparalleled demand for imported goods that markets have seen since the beginning of the pandemic.
This influx in demand for goods sourced from abroad has continued to pile up on the ports resulting in record-breaking delays to get containers unloaded and ready for on land delivery. Port officials expect most ships to face delays of at least eight days before they can be docked. However, some ships are facing weeks of delays before they can hope to be unloaded.
Consumers are increasingly turning to e-commerce to fulfill their buying needs which means many carriers will have to turn to air-freight or other modes of transportation to evade the delays ships are facing at the ports. For imported produce, the effects have created a risky venture. In addition to west coast ports filling up fast, many ships are seeking re-routes to the east coast in hopes of finding a better unloading date. However, this has created a backlog in the supply chain as even these ports are incapable of handling such a high capacity during this time. For instance, ports that typically experience lighter traffic like Savannah and Charleston are being bombarded with ships awaiting appointments to be unloaded at the moment. As all steps in the supply chain face labor shortages many ports are struggling to keep up.
****
Karman Eckelbarger is currently an Intern at ALC Orlando, FL. Karman is currently enrolled as an English major at the University of Central Florida and hopes to graduate with a Bachelors in Fall 2022.
By Steve Hull, ALC Portland
2021 continues to be a challenging year for so many. Those of us in the logistics world have been working long hours and dealing with unprecedented upheaval in the transportation space. We know, from our discussions with so many of our shipper and carrier clients that you all are working just as hard. We’ve all been missing out on chances to get together and collaborate in person during this time. We’ve missed out on attending some produce-focused trade shows in person, including the United Fresh convention and Expo along with PMA Fresh Summit. Those in-person opportunities that we once maybe took for granted are something very special. One of the things missed was the opportunity to talk about and ask for help with one of Allen Lund Company’s core Acts of Kindness, Navidad en el Barrio.
Since 2004, the Allen Lund Company has been offering assistance including freight shipments to Navidad en el Barrio. First established in the 1970s by former LA Ram’s kicker Danny Villanueva, the non-profit collects money and food for the underserved Hispanic communities in Southern California. ALC first assisted with the transportation of groceries that were included in food bags that are distributed to every family. In the early days, those food bags did not contain any perishable food items, such as fresh produce. Recognizing the strong relationships that ALC has with the growers in California, Navidad en el Barrio asked ALC to help make those food bags much more nutritious. Beginning in 2006, fresh fruits and vegetables became a consistent part of each food bag.
Critically during this pandemic, the need for assistance is as high as ever. Navidad will provide meals to approximately 10,000 families this year! We are asking for any growers/importers/suppliers who are looking to step up and make a difference in the lives of so many deserving families in Southern California by making donations of nutritious perishable foods. In the past, through the generosity of companies such as Rainier Fruit, Wada Farms, Grimmway Farms, Wonderful Citrus, Mission Foods, and Coca-Cola, we’ve been able to help provide fresh fruits, potatoes, carrots, avocados, bottled water, and juices as well as many other available seasonal products for the food bags.
Since we didn’t get the chance to ask you in person this year, we are asking now virtually. We need your help! Christmas is fast approaching, and we are currently working on lining up donations for the 2021 distribution that will take place in early December. Please, reach out to either me at steve.hull@allenlund.com, or ALC Marketing & Communications Director Nora Trueblood at nora.trueblood@allenlund.com if your business can help. We appreciate your participation.
By Doug Plantada, ALC Los Angeles
Imagine you’re walking down your local produce aisle, looking to cross some fruits and veggies off your list, and you notice something is a bit off. The lemons are a little smaller than usual, watermelons have a slightly different look to their rind. Your favorite Hass avocados aren’t quite as meaty and you can’t put your finger on them but their shape is different than you’re used to as well.
As food demands increase as a result of Covid-19 and the natural disasters of the past two years, this exact experience is becoming more common as imports of fresh produce have risen dramatically across the country. In 2021, U.S. imports of fresh vegetables from January through May were at $4.88 billion, up 4% compared with 2020.
Of the many diverse commodities grown in the United States, onions are one of the hardest hit by import increases, up 14% at $221.1 million this year. Typically, onion imports would support the industry by providing supply during the off-season, but mid-February freezing temperatures in South Texas significantly reduced yields for onion crops, and that has translated to higher prices this year.
Onion shippers are looking to imports to make up for lost crops, which according to Dante Galeazzi, president, and CEO of the Texas International Produce Association, estimates point to damage of 20% to 30% of crops in 2021. In order to maintain control over market conditions in cases like natural disasters and the increased demand due to the pandemic, the USDA has historically agreed with producers/shippers to create something called a “Marketing Order.”
Marketing agreements and orders are initiated by the food industry to help provide stable markets for dairy products, fruits, vegetables, and specialty crops. Each order and agreement is tailored to the individual industry’s needs. Marketing Orders are a binding regulation for the entire industry in a geographical area and are approved by the producers and the Secretary of Agriculture. In short, Marketing Orders would allow onion growers in Texas to promote their products by collectively influencing the supply, demand, or price of particular varieties of onion.
P
****
Doug Plantada has been with the Allen Lund Company for two years and is currently a broker in training at the Los Angeles office.