Rising freight rates pose challenge

Like suppliers of just about every commodity these days, produce distributors in Nogales, Ariz., are finding the cost of having their goods delivered to be a challenge.

“The freight is killing us to the East Coast,” said Al Voll, salesman at Fresh Farms in Rio Rico, Ariz.

Customers who traditionally have turned to Mexico after supplies start to wind down in places like New Jersey, the Carolinas, Virginia and northern Florida are stretching the domestic deals into the fall to avoid excessive freight costs, he said.

In early November, the freight charge on a box of cucumbers ranged from $12 to $14, he said, up substantially from the same time a year ago.

Buyers in the East likely will stick with eastern production until the weather freezes up, then they may seek imports from Honduras and Guatemala, he said.

“The freight continues to have a major impact on our business.”

Sasha Lewton, director of sales and marketing for Farmer’s Best International LLC in Rio Rico agreed.

“Freight has definitely been top of mind on both the buy side and the sell side,” he said. “It adds a whole other layer of challenges in an already challenging business.”

When markets are as low as they have been, adding the inflated transportation cost makes it difficult for many wholesalers to be profitable, he said.

But Lewton thinks the freight dilemma gradually will improve.

“Freight is high, but it’s cyclical,” he said. “We’re just in one part of the cycle.”

Markets may not necessarily improve, he said, but distribution will.

“You’ll be able to move product through the system.”

Fuel prices are going up every couple of days, said Chris Ciruli, partner at Ciruli Bros., Rio Rico.

In early November, freight costs to the East Coast already were at levels not usually reached until the Christmas pull, he said, and availability was short.

Miguel Suarez, owner of MAS Melons & Grapes in Nogales, termed freight rates “crazy high.”

“That changes everything,” he said, and affects costs all the way to consumer level.

High freight rates have not been an unsurmountable problem so far for Divine Flavor LLC in Nogales, said Michael DuPuis, quality assurance and public relations coordinator.

Nonetheless, “It is something that has challenged us over the last few years.”

It’s an issue that must be acknowledged, he said.

“As with any barrier or obstacle, you need to find ways to overcome it.”

High freight costs have not interfered with deliveries, and DuPuis did not say they have affected pricing, “But (they’re) something that we definitely are keeping a close eye on and making sure that we are making strategic decisions in regard to.”

The company is dealing with the challenge by working to remain flexible and perhaps allotting longer lead times, he said.

“Our main concern is to be flexible for our retailer partners and be reliable, so they can rely on us to be a good source of produce for them.”