Maintaining imported stock at retail
Jul 1, 2004 12:00 PM
SUCCESS as a grocery retailer depends on providing the products consumers want when they want them. Out-of-stock — or worse yet — out-of-season is no excuse. If consumers want fresh asparagus or fresh berries year round, they will find a retailer that meets their demands. Rapid transportation and open trade across international borders make highly perishable products available at retail regardless of the season.
If products cannot be sourced domestically, they must be acquired from other parts of the world at prices acceptable to US consumers. For years, retailers have had access to raspberries from New Zealand. More recently, Mexico and Peru have become a valuable source for asparagus during the months that US growers can't provide supplies.
One organization helping make perishables constantly available in a seamless process is Hellmann Perishable Logistics. HPL is a new part of a very old company, Hellmann Worldwide Logistics, parent of HPL. The original company was founded by Carl Heinrich Hellmann in 1871 in Osnabruck, Germany. The name changed to Hellmann Brothers in 1906. After surviving the effects of two world wars and a devastating economic depression, the company was renamed Hellmann Worldwide Logistics in 1997. It runs operations from 341 offices in 134 countries. HPL began operations in North America in 1988 as a Delaware corporation. US operations are headquartered in Miami, Florida. The company says it is the first global, multimodal freight forwarder that is committed 100% to the perishables industry.
Growing tropical product demand
Raul Villavicencio, general manager of HPL USA, says that because of seasonality, or in some cases growing conditions, producers in the US cannot supply the full demand for fresh perishables. This is especially true for tropical crops sought by immigrants to the US. Among this group alone, population is forecast to rise from 20 million to more than 31 million by the year 2010. The demand for imported perishables is driven by the increasing income and changing tastes of consumers in the US as well, he says.
Villavicencio says that many in the US tend to think of perishables as only fruit, vegetables, or flowers. However, to HPL, the category includes meat, pharmaceuticals, film and photo materials, and especially fish. In 2003, more than $1.4 billion in fresh fish was imported to the US through Miami from 41 different countries. In an interesting use of the term perishable, HPL also arranges for the transportation of farm and zoo animals. Thus, the company says it has the capability and facilities to handle a broad range of delicate items from 1,000 lb of strawberries to a single polar bear.
Perishables in international trade are time-sensitive as well as temperature-sensitive. Making sure that orders are filled quickly and safely while maintaining a constant chain of temperature control is the key to consumer satisfaction, Villavicencio says. Loss of temperature control or extra time in transit both contributes to shortened shelf life and consumer acceptance. Most food producers do not have the capability to transport goods across international borders. That requires a third party with the facilities and expertise to maintain control of perishables during transit, he says.
Salmon moves in volume
Fresh salmon provides a good example of moving a perishable product under exacting conditions. According to a recent USDA report, the US imported 414 million pounds of fresh Atlantic salmon for a total value of $916 million in 2003. Shipment volume rose 125 million pounds between 2000 and 2003.
HPL has a large salmon shipping operation that runs between Chile and Miami. The fish are farm-raised in the cool area around Puerto Montt, an old city of German immigrants at the southern end of Chile's central valley where the inland valley opens to a network of bays open to the Pacific. The producers usually harvest the fish early in the morning and process them into precut fillets. The fillets are packed into foam plastic boxes, usually seven or eight fillets to a box for a total weight of roughly 30 pounds. Refrigerated gel packs provide temperature control to maintain the fillets at 28° to 32° F.
Once processed, boxes of fish fillets are loaded into trailers for a 24-hour highway trip of more than 600 miles north to the international airport at Chile's capitol city of Santiago. Although air service is available to Puerto Montt, commercial airfreight from that far south to the US would be prohibitively expensive, Villavicencio says.
Airborne in 36 hours
Fish arrives at the Santiago airport less than 36 hours after leaving the water. Stuffed into airfreight containers — 70 foam boxes per container is the most common — the fresh salmon makes an eight-hour direct flight from Santiago to Miami. The Chilean airline, Lan Chile, is ordinarily the carrier of choice. The product is pre-cleared by the FDA in Chile. HPL personnel and trucks meet the shipments at the Miami airport. After clearing US customs, HPL has the shipments at its Miami warehouse within four to eight hours after touchdown. There in the HPL refrigerated facility, shipments are subjected to a further quality inspection followed by order selection for shipment to wholesalers and retailers.
HPL has two tractor-trailer combinations and two 24-ft straight trucks dedicated to the airport pickup service. To speed operations, the trailers and straight trucks are equipped with roller floors just like those in the cargo holds of aircraft so that airfreight containers can be handled easily. HPL returns empty containers to the airlines at the next pickup appointment. On any given day, HPL receives 20 to 40 shipments. Depending on the size of the shippers and the volume total for all shippers represented on an aircraft, HPL can receive just one container or 10 or more per shipment.
Once prepared for domestic distribution, HPL supplies retailers and wholesalers throughout the US. Many of the shipments outbound from South Florida are arranged by a brokerage owned by HPL.
Temperature control of these perishable shipments does not end at the warehouse door. Outbound shipments never leave a controlled cool chain. HPL has a specialized information system to monitor time and temperature throughout the distribution process and provide easily accessible data to all parties, Villavicencio says.
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