Argentine blueberry exporters weigh shipping options

10/02/2009 03:08:04 PM
Abraham Mahshie

As Argentine blueberry dealers look to trim costs, many are looking optimistically at their transportation options.

Typically, blueberry importers bring in product via air from Buenos Aires’ Ezeiza International Airport, or increasingly on chartered planes direct from the northern growing region of Tucuman.

More cargo planes and lower fuel costs are giving importers reason to believe air freight costs will be lower this year, but some suppliers are looking to the sea either by shipping directly from the Port of Buenos Aires or by trucking product across the continent to ship out of the Port of Valparaiso in Chile.

Aside from the cost savings of using ocean carriers, suppliers can also avoid fumigating the blueberries, which takes a toll on shelf life, if they maintain strict USDA required cold treatment. Some suppliers say the requirements for the cold treatment are too difficult to keep and it is not worth the risk.

“We use all of the transport methods,” said Keith Mixon, president and chief executive officer of Sunny Ridge Farm Inc., Winter Haven, Fla. “Each has its benefits and challenges. However, I believe we will see some market share fluctuations this year for each as carriers bid for business due to extra capacity due to various market and economic situations.”

Air transport

There are conflicting opinions as to how the air space pricing will turn out this year, but most suppliers feel this will be their top choice for shipping Argentine blueberries, and prices will be lower than last year.

“This is the most convenient way to transport as long as the temperatures in the supply chain are maintained properly,” said Joe Barsi, director of business development at California Giant Inc., Watsonville, Calif.

Mike Hollister, vice president of sales and marketing at Driscoll Strawberry Associates Inc., Watsonville, Calif., explained that the obvious advantage of airfreight is overnight arrival but that some inconsistencies may contribute to a break in the cold chain.

“There is more variability on air shipments than vessels,” he said. “Quality is really about continuing to develop better modes of transportation.”

Hollister believes airfreight cost will drop relative to last year, which would contribute to making the product more affordable in the marketplace.

“There has been a huge drop in air freight costs and fuel costs,” said Bruce Turner, head of operations for Giumarra VBM International Berry LLC, Wenatchee, Wash. “The cost base should help out because retail has certain goals and certain price points they want to hit.”

Turner said with blueberries, a key driver of growth in the berry category, retailers are eager to bring in more product.

With that in mind, Giumarra plans to bring in more containers to the East Coast and has chartered planes from the northern province of Tucuman to both Los Angeles and Miami. Giumarra is also growing and exporting from Concordia, San Luis and Buenos Aires provinces.

For those who do not have the specially chartered cargo planes, more uncertainty persists.

Dave Bowe, owner of Dave’s Specialty Imports, Inc., Coral Springs, Fla., believes air space will be tight and the requirement to fumigate blueberries before they fly will continue to cause quality and logistical challenges.

“The real problem is planes; there is not sufficient space,” he said. “Then, fumigation, fumigation, fumigation, especially at 70 degrees.”

Bowe said the principal challenge with flying is that the cost is always $3.50-4 higher per case than ocean vessels.

Ocean vessels

Suppliers are still utilizing ocean vessels primarily as pilot programs, given what many in the industry believe to be the high uncertainty of maintaining the USDA-required cold treatment for unfumigated produce from Argentina.

“There will be more boat shipments out of Argentina, and there is some concern because you have to do fumigation first,” said Robert Verloop, vice president of marketing. “We will airfreight as much of our fruit as possible, and in those situations where we have fruit that is best suited for boat, we will do a limited amount of that.”

Verloop said people like to ship out of Argentina on ocean vessels to save money, but the result may be poor quality.

“If your end result is product that goes into cheap markets, that’s not good,” he said.

Barsi agreed the cold treatment method is “very tricky.”

“It is important to have the optimum conditions in order for the fruit to arrive in proper condition,” he said. “Temperature control, along with transit time and suitable varieties are key, since only a few varieties perform best with this mode of transportation.”

Janice Honigberg, president of Sun Belle Inc., Washington, D.C., said she believes although there will be “no problem with space” this year, some suppliers may refuse to use boat shipments because of the uncertainty of keeping the cold chain or the risk of quality problems when berries are fumigated first, then have to endure an ocean voyage of more than two weeks.  

“The problem with product by boat into the U.S. is the shelf life is obviously reduced because of the fumigation, so we have avoided it,” she said. “We have done two trial containers with very mixed success … It is a very dangerous situation because it has not been fumigated.”

Shipping from Chile

Some suppliers have tried to shave days of shipping time by trucking Argentine blueberries to Chile first, then shipping them out of the Port of Valparaiso.

“This concept through Valparaiso in Chile and then from there to L.A. or Miami I believe is the right way to do it,” said Marcelo Estrada, a freelance produce marketer based in Miami, Fla., highlighting a reduction in transit time of three to four days and a logistical advantage. “That is a trend that is being taken by more growers every year.”

Estrada said the alternative proved successful in its first full-scale year last year.

“This year will be the second significant year considering volume,” Estrada said. “The fruit has to be fumigated and for fumigated fruit, three to five days arrival time is the difference between a good and a bad arrival. Even paying a little bit more is worth it.”

Bowe said transit time from Chile to the West Coast of the United States in 12 to 14 days makes the transit through Chile worth the effort.

“We did that and several others did,” he said. “You fumigate and chill the berries to almost zero degrees and put them on a very good ocean container.”

Bowe said the steamship companies working out of Chile are very good at assuring that everything in the container is the way it is supposed to be. Upon arrival in the U.S., he said the container is cleared and taken to its facility within five hours.

Honigberg said the Chilean option is not viable for her company, “It still takes several days to get it from Argentina to Chile and through customs between the two countries and to the port in Chile.”

“It’s not a cost benefit,” said Turner, who admitted that timing is improved but the option is more expensive. “It’s a little bit more expensive but the challenge in ocean freight on the Atlantic side is the timing.”

Turner said a truck to Chile would take one to two days, followed by a 12-day voyage to the U.S.

“You can shave five, maybe six days off voyage time,” he said. “It’s a quicker voyage because that’s where the shipping infrastructure is.”



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