The challenge of high fuel costs is nothing new, but prices again are going up and once again grower-shippers are looking for creative ways to curb costs.
On Jan. 25, AAA reported the U.S. national average price for diesel fuel at $3.42 a gallon, up from $2.89 the same time last year. Meanwhile, Natural Resources Canada reported that the national average for diesel in that country was $1.16 per liter, up from $0.99 at the same time a year ago.
Salesman Kyle Moynahan said Jem-D International, Leamington, Ontario, is upgrading and adding to the company’s forward distribution centers in order to streamline its operations.
Jem-D moved into a 22,000-square-foot facility in Montreal to improve service to its Montreal, Quebec and Ottawa clients in June 2010. Moynahan said the facility, which has repacking, consolidating and shipping operations, is more than twice the size of the company’s previous Montreal facility.
The company opened an Atlanta facility in September 2010. The 12,000-square-foot building is used to service customers in Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee.
“The Atlanta facility’s strategic location greatly reduces the time and distance our fruit travels,” Moynahan said. “We have the ability to service our regional customers at a moment’s notice and maximize service levels.”
Jem-D plans to upgrade its Taylor, Mich., facility with repacking, consolidation and racking capabilities as well as an improved refrigeration system, Moynahan said.
The company also opened a facility Jan. 10 in McAllen, Texas, to consolidate, ship and receive product from its farms in Mexico.
“All these operations are strategically set up to be within hours, and sometimes minutes, away from our customers,” Moynahan said. “We reduce the need to transport all our goods to our distribution center in Ontario and then back out to the customers.
“We have continued to deliver as direct as possible from our farms to our clients. This helps us to reduce the cost of transportation and also reduce the total costs of the goods delivered.”
Moynahan said reducing transportation times also helps ensure freshness and quality of the product.
Vice president of sales and marketing Matt Mastronardi said Pure Hot House Foods Inc., Leamington, also is making an effort to deliver more product direct from the farms to customers, and to increase truck fill-rate percentages.
Mastronardi said the company also is testing alternative fuels at the farm level to reduce heating costs.
Director Mark Slater said Erie James Ltd., Leamington, installed a boiler system that allows the company to burn alternative fuels — such as wood chips and garbage pellets — in addition to natural gas.
“We are capable of burning three different fuels in our greenhouses,” he said, “and we monitor costs of each source regularly to minimize the fuel and energy costs of growing.”
Peter Quiring, owner of Leamington-based grower Nature Fresh Farms Inc. and owner of greenhouse manufacturer South Essex Fabricating Inc., said Nature Fresh has focused on reducing production costs.
“We have moved to a total ability to heat our greenhouses with renewable energy sources that not only help the environment but actually reduce our costs substantially,” he said.