Perishables shipments “less-bad” than other sectors

By: | at 08:00 PM | Channel(s): Air Cargo News  International Trade  Logistics  

Overall, fruits are faring better than vegetablesBy Peter A. Buxbaum, AJOTDescribing the current state of the perishables business, and in particular, fruits and vegetables, is reminiscent of President Obama’s cheerleading of the flagging economy. A few months ago, the White House applauded jobs numbers that showed that the economy lost 300,000 jobs in a single month. Why? Because that was a lot better than the 700,000 positions which evaporated in an earlier month.
The same can be said of shipments of perishables. The numbers are down, but not as bad as other segments of the shipping business.
Complete numbers that compare apples to apples are hard to come by, but the consensus appears to be that perishables are doing okay as compared to other commodities. Import numbers also show some possible bright spots for fresh fruit. Fruits and vegetable sales are also being helped by retail price reductions. A government program targeting low-income Americans is about to kick in which will infuse the fresh produce market with hundreds of millions of dollars. (See sidebar.)
Numbers provided the AJOT by the American Trucking Associations indicated that refrigerated freight of all types is off four percent from its peak in early 2008. This compares with a drop of over 20% in all other types of truckload freight, including dry van, tank, and flatbed.
Mark Petersen, general manager for produce transportation, at C.H. Robinson Worldwide, a third-party logistics provider headquartered in Eden Prairie, Minn., agreed that ATA’s numbers presented an accurate picture. “Different indexes that you can look at will have different numbers,” he said, “but it is fair to say that a gap exists. Regardless of what index you look at, perishables are down less than others and that leads me to believe that that sector is doing better than the norm.”
And why? “Everybody has to get up the morning and eat at some point,” said Petersen. “There is less of an opportunity to move away from food in a down economy than some other products.” C.H. Robinson does not publicize its own numbers with regard to specific shipment segments.
A report on retail trends in the second quarter of 2009 released by the United Fresh Produce Association, a Washington-based trade association, presents a mixed picture on both prices and volumes of fruits and vegetables. But the report suggests that retailers are looking seriously at increasing promotions and lowering prices on fruits and vegetables, and that these tactics may be working, especially with regard to fruit.
The report indicated that the average price point for all produce was three percent lower in the second quarter of 2009 than in the same period last year and that overall volume increased two percent compared to 2008. In the fruit category, berries and apples decreased prices the most, down 9.1% and 12.6% respectively, while melon prices rose over 10% from the second quarter of 2008. Volumes of organic fruits rose 16.6%.
On the vegetable side, tomatoes declined in price the most, down 7.8%, while lettuce prices increased the most, up four percent. Volumes of organic vegetables fell by 11% from the second quarter of 2008.
If import numbers are any indication, the fruit trade appears to be faring better than vegetables. Statistics supplied by the United States Department of Agriculture show that US world trade in fresh and frozen fruit was up by 7.8% to $5.7 billion in the period October 2008 to July 2009 as compared to the same period in 2008. Among the top ten sources of US fruit imports, almost all registered gains during that nine-month period.
In terms of percentage increases, the European Union led the way with a 24.5% increase to $122 million. Guatemala was next with a 16.4% increase to $475 million, while Mexico, the number one source of fresh and frozen fruit imports, registered a 13.7% increase to $1.9 billion. Imports of fresh and frozen fruit from Ecuador and Colombia also registered healthy gains while imports from Costa Rica an

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Peter Buxbaum has been writing about international trade and transportation, as well as security, defense, technology, and foreign policy, for over 20 years. Besides contributing to the AJOT, Buxbaum's work has appeared in such leading publications as [em]Fortune, Forbes, Chief Executive, Computerworld, and Jane's Defence Weekly[/em]. He was educated at Columbia University.