Although doing business in the Rio Grande Valley has some notable upsides, but there are also a few bumps in the road.
Transportation costs and the availability of trucks and drivers is a hurdle that affects produce companies in every corner of the country. And there’s pretty much a consensus that this is one of the biggest issues in the industry today.
According to Yasmani Garcia, director of sales at Sweet Seasons, LLC in McAllen, the thorniest of problems is the ELD mandate, which limits hours of service.
Many across the industry, from distributors to logistics companies, have complained about the mandate, citing the price of the device, the need to learn a new system, and the change in general.
“We used to be able to deliver product from the border to New York City in four days; now, it’s six days,” Garcia said. “That’s a lot when you’re dealing with perishables.”
Courtney Schuster Moore, in sales with San Juan, TX-based Rio Fresh, Inc., agrees, adding that “E-logs have created challenges with freight costs and the availability of trucks, especially to the northeast.”
Tightened hours and fewer drivers (which was already a problem before ELDs sent some drivers off in search of greener pastures and more profitable jobs), continue to vex shippers in Texas and elsewhere. This is backed up by the American Trucking Associations research, citing a nationwide deficit of 50,000 drivers in 2018. The dearth also contributes to rising costs, which eventually means higher prices for consumers.
Even a powerhouse like Amazon can’t escape the reality of increased shipping costs. The online retail giant surprised its Prime customers with a membership price hike in 2018, from $99 per year to $119.
“The transportation problem needs to be addressed in Washington,” said Cindy Schwing, senior marketing and business development manager for Pharr-based London Fruit, Inc.
“We have to be able to move product, and the rates are really high right now. Let’s say you’re a company that ships a lot to the northeast, which is long distance. If you pull it in and stay closer to home to cut transportation costs, you lose sales. I’d like to see us not be limited to where we can ship because of transportation costs.”
Jorge Vazquez, president of Houston’s Latin Specialties LLC, said ELD compliance is perhaps the most important issue to impact the industry in 2018, and addresses some of the specific ways it has impacted his business since final exemptions and mass rollout last year.
“One of the major problems we’ve had are the discrepancies between these new hours of operation for drivers and the realities and practices of the industry,” he observes. “It’s an unfortunate fact that some of the larger buyers are the slowest to unload. The net result is that a produce company may be without a driver or a truck for as many as two days for just one delivery.”
While he acknowledges most of the costs incurred by these types of delays are currently being absorbed by vendors, they will ultimately be passed on to customers and, inevitably, consumers.
This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full supplement.
