Prime Fresh Handling takes advantage of the real-time balance of carrier supply and shipper demand – and timeliness is key
“If it’s not one thing, it’s another.” This time-tested idiom is certainly on the mark this year as extreme fluctuations in weather along with other coacting factors are forcing some unlikely commodities across the U.S. to pull average prices to ten-year highs.
First it was September’s unseasonably high temperatures (Blue Book Services, ProduceIQ: Prices keep rising as heat sticks around,” Mark Campbell, Sept. 18, 2023), followed by reports that temperatures will finally start dropping by mid-October.
But as soon as heat weary growers could catch their breath, a slow moving tropical system started tracking up the East Coast, while at the same time rain and early snows began pummeling the Pacific Northwest – with “blackberry, apple, pear, cucumber, and potato supplies [being seen as] vulnerable to harmful impacts from Ophelia or the atmospheric river” (Blue Book Services, ProduceIQ: Markets stall as rain threaten supplies,” Mark Campbell, Sept. 25, 2023).
Consumers are Feeling It
As a result, the jaw-clenching tension of consumers entering the supermarket is almost palpable, due to the outlandish cost of groceries – particularly produce, which used to be the best bet for savings at the store.
Beginning in 2020 when COVID disrupted supply chains, costs have been skyrocketing. The agricultural community has also been struggling with the effects of climate events and disease. In fact, bleak statistics from the U.S. Department of Agriculture are showing that prices for food at home rose 11.4 percent last year – and that’s after spikes of 3.5 percent in both 2020 and 2021.
Largest Spikes in the Aisle
ProduceIQ provides the good and the bad news for us. Let’s start with some positives: French fries are doing fine. Due to increased production out of the state of Idaho, prices are dropping – down 6 percent and with farmers finding their supply skyrocketing, it’s a good time to stock up on that versatile root! Also, toss your little one a handful of grapes for a healthy after-school snack. Table grape volume is increasing and expected to continue through autumn, so enjoy.
On the flip side, your favorite fajita is becoming more costly, with red and yellow peppers being the culprit. Prices are on the rise due to the high heat in Mexico, a seasonal transition on the West Coast, and low supply in the east. In fact, they are entering all time highs. Unfortunately, the supply of peppers is forecasted to remain short for a bit longer as growers on the West Coast navigate the transition.
El Nino is also messing with your muffins – blueberries are having a tough time. While the domestic supply of blueberries is strong, imports are about half of what they were last year. Weather patterns are affecting South American produce production significantly, with blueberry growers forecasting up to 20 percent less volume this year than in 2022.
We at Prime Fresh Handling (PFH) wish to express our deepest sympathy for the ongoing plight of people of Maui. The devastation and loss of life was unimaginable. Hawaiians are a strong and resilient people and we are confident that recovery will be quick. While the cause of the fires is still being investigated, drought-like conditions were definitely a contributing factor. Unseasonably dry or wet weather in tropical growing regions is causing a severe supply shortage for pineapples, and volume is not forecasted to improve until well into October.
Spotting the Best Prices
The economic reverberations of the pandemic are still being felt. Beginning in 2021, high consumer demand and port congestion elevated shipping prices to historic levels and ocean carriers began to add fees. Similarly, the trucking industry found itself dealing with increased labor costs and transportation rates that have forced us to quickly shift and adjust to these turbulent global conditions.
Unfortunately, it comes down to facing simple economics: increased supply means decreased prices and vice versa. At PFH, there are certain factors we can’t control – Mother Nature doesn’t take orders from us, but we can help ourselves and help our clients by staying ever vigilant.
Prime Fresh Handling remains on top of reacting and responding to this inflation that we are all facing. Our West Coast General Manager Cristina Moscoso notes, “Regardless of the price, customers always pass on to us the responsibility of offering the most competitive rates. Also, as prices go up, the exporter more often than not wants to bargain on our services. Airlines have a lot of capacity, so they are giving spot rates, and everyone wants a cut on it… the market is crazy volatile and then super slow.“
Fortunately for our clients, we move quickly. Recognizing that spot rates are short-term, transactional freight pricing, PFH pays close attention and takes advantage of the real-time balance of carrier supply and shipper demand. Timeliness is key. With our history and expertise in the industry, we make certain that we involve several carriers in this process so that we can compare and chose the lowest rate quickly before the market fluctuates the prices again. Obviously, lower rates for us means lower rates for the consumer – a win-win!
Eating the Costs
It is pretty amazing that consumer food prices have “only” risen 11.4 percent. Since 2020, food manufacturers are facing estimated increases of over 65 percent for the farm-raised ingredients that go into their products. Given that we are also paying more for several labor and transportation, the gulf between agricultural price increases and consumer food price increases suggests that many firms are eating inflationary costs instead of passing them on to customers.
There is a delicate balance in place, as food manufacturers risk losing customers when they raise prices. But someone has to pay the facility’s rent, taxes, and insurance – and fairly compensate their employees. PFH does everything in its power to keep shipping and logistics costs down for our clients.
It’s in our DNA to continually be on the lookout for creative alternatives – and it may not be easy, but we are the shipping and handling industry pros. As Moscoso says, “You can and should depend on us – we’ve been providing top-notch perishables shipping and handling services for more than 22 years! You have to keep up with it – and we do.”
About Prime Fresh Handling
As leaders in perishables distribution logistics and delivery of fresh produce, our clients range from apple growers and distributors to wholesale and retail outlets, hotels, and cruise ships. In addition to handling apples, PFH is the authority on reliable international shipping and handling of and temperature-sensitive commodities such as fresh cut flowers and pharmaceutical products, to vaccines and fresh and frozen fish between any point of origin and destination around the world.
Our efficient transportation and secure storage methods ensure that time-sensitive perishable products stay fresh and undamaged throughout the entire shipping process. With dedicated state-of-the-art facilities in Europe, South America, and across North America, PFH leverages industry-leading technologies such as vacuum cooling, sorting, re-packing, barcoding, labeling, and temperature and quality monitoring to guarantee consistent, safe, and fresh delivery.
In addition to Los Angeles, the company’s primary gateway cities include New York, Miami, Amsterdam, and Bogotá – all providing fast and easy access to all of the world’s major markets.
Contact Prime Fresh Handling
For information, contact PFH General Manager, West Coast: Cristina Moscoso at 323-328-8650, via email at infopfh@prime-fresh.com, or visit www.prime-fresh.com.
