Fuel prices weigh on distributors - The Packer

Fuel prices weigh on distributors

09/09/2011 02:40:00 PM
Andy Nelson

Liberty Fruit provides fresh-cut fruits and vegetables under its Carol’s Cuts label. After two years of major expansions, growth in the line has leveled off in 2011, Danner said.

Surcharges and Road Net routing software help Des Moines, Iowa-based Loffredo Fresh Produce mitigate the effects of soaring fuel costs, said Steve Winders, the company’s chief operating officer.

The routing software helps the company maximize its truck fleets’ efficiency, Winders said.

Also, Loffredo Fresh Produce is asking customers if it can make deliveries earlier in the day. There’s less traffic on the road at 4 or 5 in the morning compared to 6 or 7 in the morning, which means less time idling in traffic and more deliveries squeezed into one day.

Even with surcharges, sophisticated technology and cooperative customers, however, fuel costs remain a thorn in distributors’ sides, Winders said.

“You still can’t recoup it 100%,” he said.

The high fuel costs haven’t, however, shrunk Loffredo Fresh Produce’s distribution net, said Gene Loffredo, the company’s president and chief executive officer.

Loffredo Fresh Produce also faces transportation-related headaches from the supply end, Loffredo said. Thousands of truckers have gone out of business in recent years, and that has meant that distributors have often had to scramble to find trucks to bring in their fresh fruits and vegetables.

Fortunately, 2011 hasn’t created too many sourcing crises, Loffredo said.

“We’ve been lucky,” he said.

The company has not been lucky in 2011, however, when it’s come to getting produce from Kansas City to Omaha, Neb., thanks to the summer-long closing of Interstate 29 due to Missouri River flooding.

The company has distribution centers in both cities. However, for incoming freight, a truck might drop half a load in Kansas City before dropping the other half in Omaha.

Before the flood, it was a straight shot up I-29. Now, trucks must detour through Des Moines, 135 miles east of Omaha.

That hasn’t been the only flood-related challenge for Loffredo Fresh Produce. Deliveries north out of Omaha to places like Sioux Falls, S.D., have been detoured, Loffredo said.

The company’s Omaha distribution center, located near the river, has come close to flooding, he said.

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