|
|
 |
|
|
|
|
|
|
|
|
|
 |
Aug 2010
Volume 8, Number 8
|
|
Modes of Transportation
Moving products from farm to table is a complicated process, which involves multiple steps to ensure desired quality and reliable volume. In our Planting to Plate system, we focus on the condition of product when it leaves the field, is transferred through processing and distribution facilities, and arrives for use at the customer's location. One crucial component through all of these steps is the transportation itself - whether truck, rail, or barge. Each of these transportation modes is a vital step to the movement of agricultural products in the U.S.
Agriculture is the largest user of freight transportation in the country - 22% of all tons and 31% of all ton -miles used in transportation are used to move agricultural products. By comparison, coal shipments account for 9% of tons and 21% of ton-miles. Ton-miles are equivalent measures of transportation usage, based on one ton being transported one mile.
|
|
|
|
|
|
Over the past five years, the total volume of shipments has grown 12%. The growth of the agricultural sector is creating pressure on the transportation capabilities in the country, including rail and barge capacity. Additionally, the environmental impact of the different modes of transportation is getting more attention. In evaluating the modes of transportation, there are many rules of thumb:
- For every mile a truck will travel to haul a load, it will require 1.1 miles of rail travel and 1.3 miles of barge travel.
- One barge load is the equivalent of 15 rail carload and 70 truckloads.
- One gallon of fuel can move goods 59 miles by truck, 202 miles by rail, and 514 miles by barge.
Overall, U.S. consumption of fruit and vegetables continues to grow, but remains below recommended levels for a healthy diet. This creates an opportunity to grow and sell more produce domestically, as well as increased volumes available for export. Americans consume approximately 174 pounds of vegetables and 270 pounds of fruit, per capita, annually. The top vegetables consumed are potatoes, tomatoes, lettuce, sweet corn, and onions. The top fruits are oranges, grapes, apples, bananas, and pineapples.
In addition to increasing demand, growers have taken advantage of technology and other innovation to increase supply. Some of the changes include new propagation methods that decrease plant maturation times and increase yield, more effective disease and pest management, and broader use of early- and late-season varietals, which extend the effective marketing windows for certain crops.
The increased supply and demand for produce has the potential to strain the transportation infrastructure inside the country. Products have to be moved from the field to packing sheds, and then to distributors and retail or foodservice locations. Products are also moved and prepared for export. Depending on the crop, produce is grown across the country, with more penetration along the coastal rim. Major shipping areas are more concentrated, in California, Texas, Florida, and some East Coast ports.
The majority of fresh and processed produce is moved by truck. 94% of fresh and 90% of processed fruits and vegetables are moved by truck. Measured by ton-miles, 80% of total product is moved by truck, 18% by rail and barge. Trucking is a preferred method, because of the perishable nature of produce. With trucks, the ability to control temperature and humidity is greater. Goods can also be delivered to more locations without additional transfers, as is the case with rail and barge. However, this high reliance on truck service leaves the industry vulnerable to changes in the truck industry - for example, trucking rates increased an average of 44% during 2008 due to high oil and diesel fuel prices.
Produce that is being imported or exported is normally moved using containers on a bulk vessel. Almost all (99%) fruit exports and 85% of exported vegetables are moved in containers. Some commodities, such as potatoes and some citrus fruits, can be shipped in the cargo hold, eliminating the container. While bulk cargo hold shipments are a sizable portion of total shipments, containerized shipments are the preferred mode of transport for export/import cargo. Most imports come through East Coast ports, due to the heavy reliance on Latin American sources for off-season supply. Conversely, the majority of exports go through West Coast ports, since these are closest to the main growing regions.
The domestic transportation system has to accomplish three different tasks of moving produce - moving domestic product to domestic locations, moving domestic products to ports for export, and moving imported products from ports to domestic locations. The choice of transportation mode - truck, rail, or barge - varies with the type of product, as well as costs, capacity, and customer requirements. In general, commodities that are high in value, are in high demand, or have high perishability are transported by truck. As shipments get larger, are less susceptible to spoilage, or have larger inventories (and less time pressure for replenishment), shipment by rail and barge becomes more common. Rail and barge are much more cost- and energy-efficient than trucks, but cannot be used in many categories due to speed and storage condition limitations.
Based on ton-miles, trucks move 46% of all agricultural products, rail 36%, and barge 9%. These numbers include bulk commodities, fertilizers, and grain and oilseed, which are more dependent on the rail and barge systems for transport. In some categories, rail and barge transport is the norm - for example, 60% of grain exports are carried by barge.
The barge system, officially the Inland Waterway System (IWWS) includes 12,000 miles of navigable waterways and 240 lock sites. IWWS handles 624 million tons of freight and 274 billion ton-miles annually. IWWS shipments average $11 per ton less than rail and truck shipments, enabling the IWWS to handle 14% of total freight volume for 3% of total freight costs. The IWWS features four major systems, in addition to numerous smaller ones. The major systems are:
- The Mississippi River System, running from Minneapolis to New Orleans
- The Ohio River System, running from Pittsburgh to Cairo, Illinois
- The Gulf Intracoastal Waterway, along the Gulf Coast
- The Columbia/Snake River System, which flows directly into the Pacific Ocean
Rail has been a mainstay of transportation since the 1800's. In 1887, the Interstate Commerce Commission was established to oversee freight rates, approve mergers and acquisitions, and encourage competition among operators. During the 20th century, the rail industry continually lost market share. Passenger traffic shifted to the automobile and airline sectors, and freight shifted to trucking. In 1975, rail share of intercity freight had fallen to 35%, from 75% in 1920. Railroad companies also had little incentive to modernize due to strict regulatory control. This resulted in almost one-third of the rail system either bankrupt or close to failure. This combined failure risk led to two rounds of policy change, the "4R" (Railroad Revitalization and Regulatory Reform) Act of 1976, and the Staggers Act of 1980. The 4R Act eased restrictions on rates, mergers, and line management (including making it easier for rail companies to discontinue service). The Staggers Act gave rail companies greater pricing freedom, expanded multi-modal ownership, and generally made regulatory actions less restrictive and faster.
As a result, railroads were able to shift away from the unprofitable passenger business, and concentrate on the core, profitable business of freight. Companies brought larger capacity cars into service, streamlined operations, and quickly abandoned tracks and routes that were unprofitable or underused. Since 1980, over 100,000 miles of railroad tracks have been abandoned.
All of these changes dramatically lowered operating costs, enabling rail to significantly compete with other modes of transport. Regulatory freedom also gave railroad operators the ability to negotiate with suppliers in confidence, offer volume discounts, and other incentives which lowered costs and improved efficiency. With these changes in place, consolidation within the industry was inevitable, and since 1975 the number of railroad companies has shrunk from 56 to 7, two of which are Canadian. The seven include:
- BNSF Railway, in the West
- CSX Transportation, in the East
- Kansas City Southern Railway, in the South-Central region
- Norfolk Southern Combined Railroad Subsidiaries, in the East
- Union Pacific Railroad, in the West
- Canadian National, in the Central region (through its U.S. subsidiary, Grand Trunk)
- Canadian Pacific, in the North-Central and Northeast regions (through its U.S. subsidiary, Soo Line)
The rail industry continues to invest in upgraded technology and infrastructure. Even in the last two years of recession, the industry has spent over $20 billion in capital improvements, including widening tracks and tunnels, and upgrading cars and engines. This has led to greater parity between rail and truck for all categories of goods, particularly for hauls of between 700 and 1,000 miles. Improvements to enable rail to more effectively compete for perishable shipments, such as produce, are being considered. Intermodal shipments are a key area of growth for rail - these are shipments that can be carried on more than one form of transportation. For example, a container that can go directly from railcar to container ship, or railcar to truck.
Generally, the advantages of barge and rail are their high cost efficiency and lower environmental impact, when compared to trucking. Barge and rail transportation are inflexible in routing, however, and are simply not an option for the movement of many classes of produce, including most perishable commodities. Trucks are the most flexible mode of transportation. The impact of truck transport on the environment can be managed using careful route planning.
The EPA has launched a program called SmartWay which is intended to reduce the environmental impact of truck transportation. There are three major parts of the program, including route management, replacing diesel fuel with natural gas as the energy source for trucks, and increased fuel efficiency and emissions-reducing technology for diesel engines. Transportation accounts for 20% of energy consumed, but a higher share of emissions due to reliance on trucking.
Managing the capacity of all modes of transportation is vital for the continued health and growth of the agricultural industry. In addition to growing domestic demand, the industry is working on doubling export volume over the next five years. Modernization efforts are needed to ensure we have the best available transportation infrastructure and technology, which will move goods with the right balance of speed, cost efficiency, and environmental impact.
At Kingston, we have a network of transportation providers to ensure our products get to you reliably, in top condition, and at competitive rates. We will continue to monitor developments in the transportation sector, and bring you updates as new information becomes available.
For more information, please contact your Customer Service Representative or Jody Boline.
Sources: Wall Street Journal, American Waterways Operators, Pew Trust, Texas Transportation Institute, Environmental Protection Agency, USDA, Department of Energy/Energy Information Administration, University of Minnesota
>BACK TO TOP
French Beans
So far this year, we have seen a tough season for French beans in both volume and quality. Production in Guatemala has been severely reduced due to multiple natural disasters. Including volcanic eruptions, earthquakes, and significant flooding. Just in the first week of June, there was a volcanic eruption, the impact of Tropical Storm Agatha, and the opening of a giant sinkhole that swallowed an entire building in Guatemala City. As a result, quality has been poor, volumes low, and no freight service has been available. While Mexico did not suffer the same string of natural disasters, the highly variable weather this year has taken its toll on the bean supply. Extreme hot and cold during the growing season strained production, creating some gaps in supply and quality. With all of this variability, prices have been fluctuating week-to-week with little certainty. Market conditions are beginning to settle down, with more typical levels of supply and quality, and more predictable prices. Through the end of the summer, we expect to see good quality and adequate supply. We are closely monitoring the weather and growing conditions so that we can react to any further volatility.
For more information, please contact your Customer Service Representative or Jeb Johnson.
>BACK TO TOP
Rail Information
Per mile surcharge for August is $0.17.
Tonnage Estimates Up
A new report released by the American Trucking Associations (ATA) is forecasting bright days in the years ahead for freight and freight revenue. "The ATA U.S. freight Transportation Forecast to 2021" predicts a 25% growth in total freight tonnage in ten years' time.
"All modes of freight transportation were impacted by the Great Recession but I'm growing more optimistic about the long-term outlook," said ATA chief economist Bob Costello. "There are certainly some risks, but I think better days do lie ahead."
As tonnage increases so will revenue, which is predicted to rise 69% by 2021. Trucking should expect tonnage to grow to 70.7%, up from 68% in 2009. Trucks hauled 81.9% of freight tonnage by revenue last year, the report noted.
In Addition to the truck freight outlook, the forecast also offers information on other transportation modes, including rail, domestic water, pipeline and domestic air.
The share of total tonnage hauled by railroads is predicted to slip slightly by 2021, dropping from 14.70 to 14.1%. Air cargo tonnage will grow from 11.7 million to 18.4 million tons in 2021.
The report was compiled by HIS Global Insight and Martin Labbe Associates for ATA.
For more information, please contact your Customer Service Representative or Jeremy Teeples.
Source: Fleet Owner July 2010
>BACK TO TOP
Each month in the E-News, we will share insights into the activities of the Kingston Quality Assurance team as they visit growers, packers, and distributors. We hope this will help give you more information on our commitment to food safety and security. This month's report is from Cindi Thompson, Food Safety/Quality Assurance Supervisor.
Food Safety
The terrorist attacks of 2001 changed many of our daily assumptions about our safety. Much of the visible, tangible changes have focused on transportation and physical security. This has included increased screening and scrutiny at airports, government buildings, and more vigilant monitoring of documents, information, and financial transactions. Another important area has been increased attention to the safety and monitoring of our food supply, both domestic production and imports.
In general, the food supply in the U.S. is incredibly safe. Consumers can reliably expect their food to be free of bacteria and other contaminants. However, our food safety system and processes have been developed to minimize bacterial contamination and spoilage, rather than to prevent against bioterrorism or other threats. Water supplies, food processing plants, and other shipping and storage facilities could be vulnerable. As a result, the government has formed a Food Safety Working Group, made up of representatives from the Departments of Agriculture, Transportation, and Homeland Security. This group is managing an upgrade of the security and monitoring of food safety and security. One result of these efforts is tougher standards for food safety and storage.
In our travels evaluating quality at fields and packing facilities, we verify compliance with these new standards. Some of these include physical barriers and more security for access to the facility and the food supply. Others are more rigorous, detailed recordkeeping. All of these are welcome additions to our monitoring, to ensure our food supply remains safe, secure, and reliable for our customers.
For more information, please contact your Customer Service Representative or Jeb Johnson.
>BACK TO TOP
Each month, one of our associates will share one of their favorite recipes using different Kingston products. We hope you will try one or all of our family recipes, and all of the great ways to enjoy our high-quality, wholesome products.
Ashley's Easy Green Bean & Egg Summer Salad
Ingredients
o 1 pound fresh Kingston green beans, cut into 1 1/2 inch pieces
o 3 hard-boiled eggs, chopped
o 1/2 cup chopped Kingston sweet onion
o 3/4 cup mayonnaise
o 3/4 teaspoon prepared mustard
o 3/4 teaspoon salt
o 1/8 teaspoon pepper
Directions
1. Place beans in a steamer basket. Place in a large saucepan over 1 inch of water. Bring to a boil; cover and steam for 8-10 minutes or until crisp-tender. Transfer to a bowl; cool. Add the eggs and onion.
2. In a small bowl, combine the mayonnaise, mustard, salt and pepper. Add to bean mixture and mix well. Cover and refrigerate for at least 2 hours before serving.
>BACK TO TOP
Kingston Service Anniversaries
Join us in congratulating our team members on their many years of service.
 |
 |
 |
|
Travis Hess
15 years |
Patty Clemons
8 years |
Aaron Bagley
4 years |
|
>BACK TO TOP
Visit KingstonMarketing.com
|
|
|
|
|
