Direct containerized shipments on the rise
Direct containerized shipments on the rise
PHILADELPHIA -- In January 2006, Maersk Line in Charlotte, NC, began a direct service from Chile to Philadelphia with containerized fruit. Huge Maersk ships brought the fruit to Philadelphia's Packer Avenue Marine Terminal.
While the volume in these containers for the first year was not considered overly significant by the trade, the way of doing business was a change, and it is raising eyebrows here as the port industry looks forward.
Tom Mastromarco, director of fruit marketing and customer service for Gloucester Marine Terminal in Gloucester City, NJ, expects the volume of containerized fruit will increase for the ports of the Delaware River next season at the cost of containerized vessels that would have gone to other ports.
Mr. Mastromarco said that before the direct service to Philadelphia, the Packer Avenue Marine Terminal had received some indirect containers, which had first stopped in Panama or Manzanillo, Mexico. The direct route takes 13 or 14 days vs. the 21-28 day indirect trans-shipped route.
Mr. Mastromarco said that the containers coming to Philadelphia "are good for business. Anything to get fruit into Philadelphia. It's good for everybody."
In June, the Packer Avenue Marine Terminal was receiving containerized Chilean kiwifruit, lemons, clementines and apples, which represented the largest volume of the containerized Chilean fruit, Mr. Mastromarco said.
The Packer Avenue terminal sometimes, "but not lately," receives containerized fruit from Mexico, Uruguay or Paraguay, Mr. Mastromarco added.
The banana companies with containerized facilities along the Delaware River all bring a mix of tropical fruit, which may or may not be imported by the banana company. Dole Fresh Fruit Co. in Westlake Village, CA, Chiquita Brands International in Cincinnati and Del Monte Fresh Produce N.A. Inc. in Coral Gables, FL, all have container operations on the Delaware River. Del Monte's facility is immediately adjacent to Gloucester Marine Terminal but located a city line away in Camden, NJ. Dole and Chiquita both have container operations downstream at the port of Wilmington, DE.
A fourth banana company, Banacol Marketing Corp. in Miami, also is on the Delaware River with a break bulk operation in Philadelphia.
Beyond the banana companies' product lines, Mr. Mastromarco said that he does not foresee a large volume of direct imports of Central American melons coming to the Delaware River. He explained that Central American melons have a short season, making it difficult for the port facilities to dedicate resources to small ships during the height of the Chilean deal.
But, he added, "if someone [in the melon business] wanted to set up operations for two months, they could."
Dennis Latina, vice president of Delaware River Stevedores, believes that receiving containerized fruit from Chile will be a growing trend. He expects that in five or seven years, many more containers will be received on the Delaware River. He noted that it will take some time to make necessary investments in equipment. "If you receive 500 containers here, you need 1,500 in the cycle" to allow for backhauls and the use of containers in distribution and replacement with packingsheds.
"Logistically, it's different for a terminal operator," Mr. Latina said. "But that's where the business is going."
Andr?s Montecinos, U.S. East Coast representative for the reefer division of CSAV in Santiago, Chile, predicted that the Chilean fruit industry "will have more containerization. It will switch slowly, and it will take another five or six, if not 10, years."
He said that CSAV will move to container service if that is what customers want, but he added that for now, most receivers do not like containers because of the need to strip them when the contents need to be fumigated.
He said that fruit from Chile is carried at 32 degrees, but in preparation for fumigating fruit to USDA specifications, the temperature must be increased to 40 degrees two days before landing. With a shipload of containers, that is "not easy to do. The cargo has to be 40 degrees or above. Not 39.5," according to USDA specifications. Furthermore, he said, the temperature cannot be immediately shifted from 32 to 40. That change has to be done in two-degree increments.
"You have to climb five times to 200 containers, so you make 1,000 changes and some of the containers are all the way down, so you can't reach them easily," Mr. Montecinos said. "It is very difficult for the crew and quality wise it is not good for the fruit. In the future that will be done remotely, but for now you have to do it by hand."
Another consideration on container shipping is with cardboard packaging. "It is not easy to increase temperatures." The cardboard tends to keep temperatures stable, he said.
With break bulk fruit, "If you're shipping 400 pallets per hatch, you change one control and it's done."
Mr. Montecinos said that Maersk's container service to Philadelphia this year "made an impact, but it was not significant. He noted that Chile exported 200 million boxes of fruit this year and will ship 210 million boxes next year. "That is another 10 million boxes, or 5,000 containers. There is plenty of fruit to go around."
Robert Blackburn, deputy executive director of the Philadelphia Regional Port Authority, said, "I believe there is a market for both containers and conventional reefer service to Philadelphia. Certainly in the off-season when there is not substantial enough volume to charter reefers, but product still comes up, there is a market for containers to capture, and they have captured that already."
The port of Philadelphia "is certainly equipped from either standpoint," be it reefer or containerized fruit cargo. "We work with Maersk and the reefer carriers in the port to assure they're taken care of and that their cargo is handled expeditiously."
The Philadelphia Regional Port Authority owns seven cranes located at the Packer Avenue Marine Terminal, which also has over 1,100 reefer plugs that are used for containers carrying fruit and other refrigerated cargo. PRPA also owns "over half-a-million square feet of on-dock refrigeration space for shipments via reefer or container."
Mr. Blackburn said that fruit is a "very, very valuable product" relative to general ocean cargo that also arrives in Philadelphia. With a high-value product, the best way to handle it is the establishment of a hub for discharge and let the importers and customers pick and choose" what to buy from "the warehouse floor."
Mr. Blackburn noted that such shopping of fresh produce shipped from a foreign country in a container is "very, very difficult." Any such program of shipping full containers all the way from Chile or another source country to a final retail customer would likely need to be for a large-volume commodity - notably grapes. Grapes account for 70 percent of the Chilean volume entering Philadelphia, he noted. A large retail chain "buying huge lots on ad who has high confidence with his importers" could practically "go door to door with containers," provided the fruit is fumigated before loading in Chile.
"It would be difficult, given the variable nature of the product base, to determine in advance what to ship from door to door." Furthermore, Mr. Blackburn noted that the fruit market changes quickly. "How many times do prices change from the time the fruit leaves Chile until it arrives at Giant?"
Frank Manfredi, president of Manfredi Cold Storage in Kennett Square, PA, said that eventually some fumigation will take place within containers, which will expand containerized shipping for the international fruit business.
Commenting specifically on Maersk's decision to carry containerloads of Chilean fruit directly to Philadelphia, Mr. Blackburn said, "Maersk is the largest steamship line in the world. They are highly successful and they know what they are doing. They have the resources to be in this market and wait for things to develop to be successful for them."
Maersk was contacted to comment on this story but did not return calls by press time for the July 31 issue of The Produce News.
(For more on the general subject, see The Ports of the Delaware River Section in the July 31 issue of The Produce News.)
While the volume in these containers for the first year was not considered overly significant by the trade, the way of doing business was a change, and it is raising eyebrows here as the port industry looks forward.
Tom Mastromarco, director of fruit marketing and customer service for Gloucester Marine Terminal in Gloucester City, NJ, expects the volume of containerized fruit will increase for the ports of the Delaware River next season at the cost of containerized vessels that would have gone to other ports.
Mr. Mastromarco said that before the direct service to Philadelphia, the Packer Avenue Marine Terminal had received some indirect containers, which had first stopped in Panama or Manzanillo, Mexico. The direct route takes 13 or 14 days vs. the 21-28 day indirect trans-shipped route.
Mr. Mastromarco said that the containers coming to Philadelphia "are good for business. Anything to get fruit into Philadelphia. It's good for everybody."
In June, the Packer Avenue Marine Terminal was receiving containerized Chilean kiwifruit, lemons, clementines and apples, which represented the largest volume of the containerized Chilean fruit, Mr. Mastromarco said.
The Packer Avenue terminal sometimes, "but not lately," receives containerized fruit from Mexico, Uruguay or Paraguay, Mr. Mastromarco added.
The banana companies with containerized facilities along the Delaware River all bring a mix of tropical fruit, which may or may not be imported by the banana company. Dole Fresh Fruit Co. in Westlake Village, CA, Chiquita Brands International in Cincinnati and Del Monte Fresh Produce N.A. Inc. in Coral Gables, FL, all have container operations on the Delaware River. Del Monte's facility is immediately adjacent to Gloucester Marine Terminal but located a city line away in Camden, NJ. Dole and Chiquita both have container operations downstream at the port of Wilmington, DE.
A fourth banana company, Banacol Marketing Corp. in Miami, also is on the Delaware River with a break bulk operation in Philadelphia.
Beyond the banana companies' product lines, Mr. Mastromarco said that he does not foresee a large volume of direct imports of Central American melons coming to the Delaware River. He explained that Central American melons have a short season, making it difficult for the port facilities to dedicate resources to small ships during the height of the Chilean deal.
But, he added, "if someone [in the melon business] wanted to set up operations for two months, they could."
Dennis Latina, vice president of Delaware River Stevedores, believes that receiving containerized fruit from Chile will be a growing trend. He expects that in five or seven years, many more containers will be received on the Delaware River. He noted that it will take some time to make necessary investments in equipment. "If you receive 500 containers here, you need 1,500 in the cycle" to allow for backhauls and the use of containers in distribution and replacement with packingsheds.
"Logistically, it's different for a terminal operator," Mr. Latina said. "But that's where the business is going."
Andr?s Montecinos, U.S. East Coast representative for the reefer division of CSAV in Santiago, Chile, predicted that the Chilean fruit industry "will have more containerization. It will switch slowly, and it will take another five or six, if not 10, years."
He said that CSAV will move to container service if that is what customers want, but he added that for now, most receivers do not like containers because of the need to strip them when the contents need to be fumigated.
He said that fruit from Chile is carried at 32 degrees, but in preparation for fumigating fruit to USDA specifications, the temperature must be increased to 40 degrees two days before landing. With a shipload of containers, that is "not easy to do. The cargo has to be 40 degrees or above. Not 39.5," according to USDA specifications. Furthermore, he said, the temperature cannot be immediately shifted from 32 to 40. That change has to be done in two-degree increments.
"You have to climb five times to 200 containers, so you make 1,000 changes and some of the containers are all the way down, so you can't reach them easily," Mr. Montecinos said. "It is very difficult for the crew and quality wise it is not good for the fruit. In the future that will be done remotely, but for now you have to do it by hand."
Another consideration on container shipping is with cardboard packaging. "It is not easy to increase temperatures." The cardboard tends to keep temperatures stable, he said.
With break bulk fruit, "If you're shipping 400 pallets per hatch, you change one control and it's done."
Mr. Montecinos said that Maersk's container service to Philadelphia this year "made an impact, but it was not significant. He noted that Chile exported 200 million boxes of fruit this year and will ship 210 million boxes next year. "That is another 10 million boxes, or 5,000 containers. There is plenty of fruit to go around."
Robert Blackburn, deputy executive director of the Philadelphia Regional Port Authority, said, "I believe there is a market for both containers and conventional reefer service to Philadelphia. Certainly in the off-season when there is not substantial enough volume to charter reefers, but product still comes up, there is a market for containers to capture, and they have captured that already."
The port of Philadelphia "is certainly equipped from either standpoint," be it reefer or containerized fruit cargo. "We work with Maersk and the reefer carriers in the port to assure they're taken care of and that their cargo is handled expeditiously."
The Philadelphia Regional Port Authority owns seven cranes located at the Packer Avenue Marine Terminal, which also has over 1,100 reefer plugs that are used for containers carrying fruit and other refrigerated cargo. PRPA also owns "over half-a-million square feet of on-dock refrigeration space for shipments via reefer or container."
Mr. Blackburn said that fruit is a "very, very valuable product" relative to general ocean cargo that also arrives in Philadelphia. With a high-value product, the best way to handle it is the establishment of a hub for discharge and let the importers and customers pick and choose" what to buy from "the warehouse floor."
Mr. Blackburn noted that such shopping of fresh produce shipped from a foreign country in a container is "very, very difficult." Any such program of shipping full containers all the way from Chile or another source country to a final retail customer would likely need to be for a large-volume commodity - notably grapes. Grapes account for 70 percent of the Chilean volume entering Philadelphia, he noted. A large retail chain "buying huge lots on ad who has high confidence with his importers" could practically "go door to door with containers," provided the fruit is fumigated before loading in Chile.
"It would be difficult, given the variable nature of the product base, to determine in advance what to ship from door to door." Furthermore, Mr. Blackburn noted that the fruit market changes quickly. "How many times do prices change from the time the fruit leaves Chile until it arrives at Giant?"
Frank Manfredi, president of Manfredi Cold Storage in Kennett Square, PA, said that eventually some fumigation will take place within containers, which will expand containerized shipping for the international fruit business.
Commenting specifically on Maersk's decision to carry containerloads of Chilean fruit directly to Philadelphia, Mr. Blackburn said, "Maersk is the largest steamship line in the world. They are highly successful and they know what they are doing. They have the resources to be in this market and wait for things to develop to be successful for them."
Maersk was contacted to comment on this story but did not return calls by press time for the July 31 issue of The Produce News.
(For more on the general subject, see The Ports of the Delaware River Section in the July 31 issue of The Produce News.)
