Fuel cost offers only some relief to shippers

06/15/2009 04:33:13 PM
Ashley Bentley

BYRON CENTER, Mich. — Diesel costs may not be as high as they have been the past year or two, but transportation costs remain a burden for Michigan shippers.

“Last year, we were hit hard on both ends with the diesel increase,” said Dave Miedema, president of E. Miedema & Sons Inc., Byron Center. “Diesel is down and that should help, but transportation is expensive when shipping to Florida, and that’s where a lot of our stuff goes.”

Even with diesel costs being down, input costs are still higher than they used to be.

“A lot of our customers are using that (diesel being down) as an excuse of why they don’t need an increase, but there’s a lot of other stuff, like fertilizer, that has had significant increases.”

                                                                Ashley Bentley

Byron Center, Mich.-based Hearty Fresh added on to its warehouse this year and moved its Destin Transportation Inc. low-emission trucks to the new add-on. The old truck storage garage became a new cooler.

Duane Frens, general manager of the Michigan Celery Promotion Cooperative Inc., Hudsonville, said many input costs are just as high.

One of the concerns with trucking is finding goods to even out the trip. Michigan’s furniture business keeps some shippers busy, taking loads of furniture whichever way the produce is not traveling.

“If their sales are down, instead of taking 100 loads a week, they may take 50,” Nething said. “That scares us more than fuel prices.”

Jerry Van Solkema, president of Byron Center-based Van Solkema Produce Inc., said trucks can be harder to get a hold of earlier in the season.

“It’s always at the forefront for us in the summer, trucking and what this year’s going to hold,” said Todd DeWaard, sales manager for Hudsonville-based Superior Sales Inc. “It’s supply and demand with the trucking industry. If there aren’t enough loads coming to Michigan, they may have to come empty, or they may not come because there’s not enough revenue.”

DeWaard said if that happens, he may have to wait an extra day to ship his product, or he may have to pay a little extra.

Corrugate or RPC?

Packing containers have been changing, with a strong push toward reusable plastic containers over the last couple years.

“There are more RPCs,” Frens said. “Although, we had the biggest increase about two years ago, and that has kid of leveled off.”

Byron Center-based Hearty Fresh has started using more RPCs in its packing and shipping, said Talbert Nething, general manager. The problem, he said, is that the containers add weight, and therefore fuel cost, to the trip.

“What’s better, saving money on transportation costs? Or on packing?” Nething said. “It’s an industry debate.”

Nething said the push for RPCs is customer-driven.

“Six months ago, more customers wanted RPCs,” Nething said. “It seems to have died off a bit. Whether the push has died down or whether it’s economical — I don’t have an explanation for it.”

Van Solkema said his company does some RPCs for a few customers that sell to Wal-Mart.

“RPCs are bigger and heavier, and you can fit less carriers on trucks,” Van Solkema said “So what’s the carbon footprint? It’s really six of one, half a dozen of the other.”

RPCs may be a little easier, Van Solkema said, because they don’t have to be closed after they’re packed.

Superior Sales packs in RPC for customers that will take them, but for the rest, pushes as much as possible into a dry box.

The company is testing a dry box on cabbage this year, said Randy Vande Guchte, president. Celery, sweet corn and cabbage tend to be packed in a coated box because they’re too wet for a dry box, he said.



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