Pier deal should increase efficiencies, decrease costs - The Packer

Pier deal should increase efficiencies, decrease costs

06/10/2011 12:41:00 PM
Dan Gailbraith

The produce industry stands to benefit from Peru’s new contract with a major shipping company that will invest in and manage a pier at a major port, which should result in increased efficiencies and decreased costs.

APM Terminals, a subsidiary of Copenhagen-based shipping company A.P. Moller-Maersk A/S, signed an agreement in early May to develop and operate a $1.1 billion pier at the Terminal Muelle Norte (North Quay) at the port of Callao, Peru, according to an online Bloomberg report.

The 30-year contract includes a total concession of nearly $749 million, said Beatriz Tubino, agricultural exports manager, Exporters Association, Lima, Peru.

APM is expected to begin operations in Callao in July.

About 65% of Peru’s fresh agricultural exports, including produce, flowers and fish, go through Callao, Tubino said. That includes about $435 million worth of fresh agricultural products, such as citrus.

A majority of Peru’s citrus exports — about 95% — go through Callao, said Sergio del Castillo, general manager, Lima-based Citrus Growers Association of Peru, or ProCitrus.

The agreement should improve the fresh produce export process by creating additional services for reefers, boosting capacity for large vessels, shortening transit times, and creating more competition, more efficient operations, and cost savings, Tubino said.

APM’s investment in and operations of the pier should also decrease port rates, increase efficiencies of export logistics and improve Peruvian growers’ ability to compete on the global market, Castillo said.

Del Castillo said that more than 80% of ProCitrus exports to the U.S. are part of a buyer’s program, and its products are shipped in 5-pound boxes, consumer bags or 10- to 15-kilogram boxes, according to clients’ needs.

Only fruit for the spot market is shipped in bulk cartons, he said.

Chincha, Peru-based grower-shipper La Calera’s fruit is shipped in 30-pound boxes and is sometimes repacked by the company’s Miami-based import entity, Andean Sun Produce Inc., into 6 x 5-pound or 10 x 3-pound bags, said Estuardo Masias, owner.

Miami-based Customized Brokers Inc., a subsidiary of Crowley Maritime Corp., Jacksonville, Fla., facilitates efficient U.S. customs clearance of imported fruits and vegetables.

Customized Brokers mainly handles refrigerated produce, including Peruvian clementines, said Nelly Yunta, general manger.

“We are in constant contact to let (importers) know the status of the import and when it is arriving,” she said. “Our portion (of customs clearance) is to expedite the release through the port and make it as fast as we can.”

Peruvian clementines must move quickly through customs because shelf life is limited.

By the time it reaches the U.S., citrus from La Calera has been in transit for 17 to 21 days, Masias said. The company exports fruit into Los Angeles and Philadelphia through its export entity, Lima-based Prolan.

Customized Brokers informs its clients, who are importers, when the U.S. Department of Agriculture is inspecting their products. The company also checks Food and Drug Administration releases that might apply to certain items.

When customs clears the produce, Customized Brokers coordinates with the importers to see that the product is shipped to where the importer wants it, Yunta said.

Customized Brokers’ expediting process is electronic. Importer clients submit necessary documents to the company, which then reviews them and submits them to the customs service.

Clementines must go through a specific cold treatment process before they can enter the U.S.

Temperatures must be maintained for a period that is determined to be cold enough and long enough to kill fruit flies that might be on the fruit. Clementines must be held at 34 degrees for 15 days, Yunta said.

The cold treatment process is a stressor for the fruit, so growers must carefully manage production, especially skin quality, and post-harvest processes to deliver good quality citrus, del Castillo said.

Masias said the Peruvian government is working to rid the country of med fruit flies, and he expects success by about 2014.

“The country is working hard to achieve this goal, and I want to stress the government’s commitment to this very important step,” Masias said.

Clementines from Peru are allowed to enter only northern U.S. ports in order to protect domestic produce grown in the southern U.S.

Yunta said Peruvian clementines are shipped mainly to New York, but Customized Brokers and others are working to change the protocol so that clementines can be brought in through south Florida. However, such a change, if it happens, requires a lengthy process.

The change would benefit importers in the southern U.S. because it would be cheaper to ship into southern Florida instead of discharging produce cargo in New York and distributing it inland.



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