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What's New

Mexican Ocean Link Opens Opportunities for Northeast Produce Industry

by Tad Thompson | February 25, 2016

There are new, significant business opportunities for produce distributors in and around Philadelphia.With a brand new SeaLand refrigerated sea trade route now operational between the east coast of Mexico and Philadelphia, fresh produce operators in the Northeast have the opportunity to become direct distributors of fresh Mexican fruits and vegetables.

Delaware River port industry perishable category leaders Larry Antonucci and Miriam Borja-Fisher discussed these opportunities with The Produce News after a related Feb. 17 event in Philadelphia. Antonucci is the president of the volunteer organization Ship Philly First, and Borja-Fisher is the president of the World Trade Association of Philadelphia Inc.

The Feb. 17 meeting started with a press conference to discuss the new service, featuring speaker Craig Mygatt, chiefexecutive officer of SeaLand. Attending the press conference were Carlos Giralt-Cabrales, Consul of Mexico in Philadelphia, Pennsylvania Gov. Tom Wolf and other top Pennsylvania political leaders.

The press conference reconvened for a related standing-room-only program celebrating the 85th anniversary of the World Trade Association of Philadelphia. Ship Philly First and related Philadelphia trade groups worked for two years to create this trade route.

"I personally feel good about the service and where it can go," said Antonucci, whose customs house business, J&K Fresh East in Lester, PA, near the Philadelphia airport, cleared avocados and limes on the first SeaLand ship, which arrived Feb. 4 from Mexico. "We are just starting. This needs time to ramp up. But the initial loads were good. We are gaining traction."

When SeaLand formally announced the service on Dec. 17, it indicated the SeaLand Atlantico refrigerated containership route would debark on Tuesdays from the Port of Veracruz. It will then take two days to arrive in Port Altamira, a Mexican port to the north of Veracruz. The ship will leave on Thursdays — the same day as arrival — and then arrive at Philadelphia's Packer Avenue Marine Terminal on the following Wednesday.

"The all-water service from Altamira and Veracruz to Philadelphia offers a fast six-day transit time from Mexico to Philadelphia where Mexican shippers are able to access up to 40 percent of the U.S. population within only a day's drive," according to SeaLand.

Antonucci noted that the "green" ocean route would be attractive to customers in the Northeastern sector of North America. At his press conference, SeaLand's Mygatt indicated that 100 containers shipped aboard SeaLand Atlantico would save 31,487 gallons of fuel versus what trucks would burn on the same delivery. Six hundred containers will save 188,821 gallons of fuel.

Antonucci told to The Produce News that there is a reduction in delivery cost by five or 10 cents per case, depending on the number of cases per reefer container.

"The cost is very competitive," he said, but the new service "requires a paradigm shift for the produce industry. Everyone is comfortable with over-the-road service."

WTA President Borja-Fisher, who is the senior business development manager for Western Fumigation, based in Parsippany, NJ, said following the February meeting, "the takeaway was great. There is a buzz and a lot of energy. People are very confident. I'm happy to see this ramp up."

Borja-Fisher credits Mexican Consul Giralt-Cabrales with "rolling up his sleeves" to contribute a great deal in creating this service. The Philadelphia Regional Port Authority has also been a major player in developing this service.

Inbound freight for Philadelphia is the "anchor for service" of SeaLand Atlantico, Antonucci said. "That is what we concentrated upon. That business is the most easily identifiable. There is a tremendous amount of product that is the main target now."

He added that mangos are a very important commodity for this service. Many fresh vegetable items are also produced south of the economic line that is a buffer for transportation efficiencies. Mexican growers within a certain distance of Nogales, San Diego or South Texas may for the foreseeable future benefit through truck transportation. But growers to the south and east can gain a great deal by looking toward the ocean link.

Borja-Fisher said that there is a "tremendous amount of bilateral trade" between Pennsylvania, New Jersey and New York. Developing southbound cargo of many different potential products, such as chemicals, auto parts and pharmaceutical products, creates a challenge and many opportunities. She noted that SeaLand "has a lot of people on the ground" and the corporation is taking "a very entrepreneurial approach" to give life to SeaLand Atlantico.

Independent businesses, such as that of Antonucci, also will benefit by cultivating those opportunities. Part of Antonucci?s business is 721 Logistics LLC, based in Los Angeles, which is a customs house for many non-produce products.

Antonucci said Ship Philly First would meet again in mid-March to plan next steps for developing sea trade with Mexico.

"Establishing this service was the easy part" of creating new trade with Philadelphia." Now the real challenge is to get containers on this vessel. That is what we are really focusing on now. Our job didn't end with getting the vessel here. We have just started."

A key part of the beginning is to have Northeastern produce houses appreciate how much they can profit by capitalizing on direct links to Mexico produce shippers.

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