Freight costs should be manageable this season, and plenty of ships seem to be available to get the Peruvian onion crop to U.S. markets, importers said.
Before the season started, it looked like freight costs out of Peru could rise up to 30% for Glennville, Ga.-based Bland Farms LLC, said Michael Hively, the company’s chief financial officer and general manager.
But after negotiations, the price hike came down to 10%, Hively said.
“Our size and economy of scale allows us to get pretty good rates,” said Richard Pazderski, Bland’s director of sales and marketing.
Freight costs will likely be status quo, or possibly even a bit lower than normal, said Ira Greenstein, owner of Mount Kisco, N.Y.-based Direct Source Marketing.
And while food-safety costs related to GS1 compliance will increase in the near future, for 2010, the company’s food safety costs are about the same, Greenstein said.
“All of our third-party certification and other food safety expenses are already in place,” he said.
Another cost that could go up for Direct Source’s growers in the near future is land, Greenstein said. The value of Peruvian agricultural land has gone up substantially in the past two years, which could hit growers who lease land particularly hard, he said.
Rawls Neville, operations manager for Register, Ga.-based Four Corners Farms, said that so far during the 2010 Peruvian season, transportation problems were few and far between.
“Everything seems to be pretty good,” he said. “Everything’s moving pretty smoothly.”
Freight costs are holding steady and availability has been good thus far this season, said Brandon Parker, sales manager for Reidsville, Ga.-based Shuman Produce Inc.
“There is an ample supply of ships,” he said.
Freight costs seem to be in line with last year, and although there haven’t been any problems with containers getting to the port, there have been some issues releasing them from the port, Parker said.
Availability wasn’t a problem and freight rates were holding steady in early September, but that’s no guarantee for the rest of the season, said Barry Rogers, president of Melbourne, Fla.-based Sweet Onion Trading Co.
“Not so far, but that doesn’t mean it can’t happen later,” Rogers said.