USDA program has jumpstarted TCL investments in US southeastern ports

By: | Issue #659 | at 08:00 AM | Channel(s): Ports & Terminals  Ports  

Port of Virginia: The latest authorized to receive cold-treated South American produce

Importers of perishables from South America can now move their cargo across the Port of Virginia as the port is now a participant of the US Department of Agriculture’s Southeast In-Transit Cold Treatment Pilot program.

Virginia is the newest member of a pilot that is designed to import fresh fruit to southeastern US ports from South America. The pilot allows entry of in-transit, cold-treated containers of agricultural products originating in South America, including blueberries, citrus, and grapes from Peru; blueberries and grapes from Uruguay; and, apples, blueberries and pears from Argentina.

“This designation means shorter total transit times from origin to market,” said John F. Reinhart, CEO and executive director of the Virginia Port Authority. “This also helps to diversify our cargo mix.” The Port of Virginia is the latest southeastern port to join the USDA program, which was initiated in the fall of 2013 to allow imports of cold-treated grapes and blueberries from Peru and Uruguay into PortMiami and Port Everglades in southern Florida. Port Everglades welcomed its first shipment of imported Peruvian grapes in November 2013, while the first direct shipment of Peruvian blueberries arrived at PortMiami in March 2014. Port Tampa Bay, Port Manatee, and the port of Jacksonville, all in Florida, joined the program in 2015.

In September 2014, the port of Savannah, Georgia, was authorized by USDA to accept cold-treated citrus fruit, grapes, and blueberries from Peru; citrus and blueberries from Chile; and grapes from Brazil. The port accepted its first shipment of cold-treated produce in January 2016.

It may have taken a while for some of the port participants to take delivery of their first cold-treated produce, but at least in the case of Savannah and Port Tampa Bay the development sparked investments in new cold-storage facilities. The same could be in store for the Port of Virginia.

Entry Points

Imports of South American fruit were previously restricted to entry through northeastern U.S. ports and then trucked to markets in the southeast. Perishables brought to the Port of Virginia and other southeastern ports allows consumers in that region access to fresh produce quicker. Besides faster delivery, the pilot program also cuts logistics-related emissions by reducing truck miles and allowing more efficient shipments.

The purpose of the Agriculture Department regulations is to restrict entry into the U.S. of Mediterranean fruit flies, Asian longhorned beetles, and other pests. Under standards set by the USDA, all imported produce must be quarantined and properly processed. The cold treatment process, one of several treatments approved and monitored by the USDA’s Animal and Plant Health Inspection Service, involves holding of produce at a set temperature range—in this case, just above freezing—for a specified time.

“The new infrastructure for the mitigation of pests in South American fruit has been developed in the past decade,” added Frank Camp, sales director at the port of Jacksonville. “Mitigation procedures have improved to the point where agriculture officials are comfortable with allowing fruit requiring cold treatment into the southeast.”

Moving through southern ports also mitigate delays caused by severe winter weather in the north. “Tremendous volumes of fruit go to ports like Philadelphia, New York, and Wilmington,” said Camp. “That is how it has always been done regardless of the inland costs to the shipper. The winter weather can be terrible up north and that can push back box inspections back and create large delays.”

Following Savannah’s acceptance into the USDA program in September 2014, the port accepted its first containers of imported produce to undergo cold-treatment in January 2016. The boxes carried tangelos from Peru.

Time is Money in the Southeast

Matt Jardina, of the Atlanta-based company J.J. Jardina, a wholesale produce distributor, that received the tangelos, also stressed the savings in time and freight costs. “It makes a lot of sense to use the Savannah port,” he said. “It was nice to have only a four-hour truck ride to Atlanta versus a day and half from the Philadelphia ports. It allowed us to get the product in our warehouse more quickly and begin selling the product a few days earlier.”

A Georgia-based company called PortFresh Logistics built a 100,000 square-foot cold treatment facility dedicated to perishable cargoes imported through the Port of Savannah. PortFresh’s cold storage facility, which opened in late 2016, is located on 20 acres of a 182-acre site 15 miles from the Port of Savannah’s Garden City Terminal. The facility is engineered to maintain cold chain integrity and is specifically designed to allow multiple climate zones.

“We believe the growing population of the U.S. Southeast, government policy changes, and perishable industry consolidation will break open significant pent-up demand for the new perishable supply chain gateway built around the Port of Savannah,” said Brian Kastick, CEO of PortFresh Logistics. Georgia’s state government supported the PortFresh development with a $400,000 grant from a program administered by the Georgia Department of Community Affairs to Effingham County to help cover the cost of laying water and sewer lines to the area of the site.

Port Tampa Bay was approved to participate in the cold treatment program in October 2015. “Our participation in this program dovetails nicely with our plans to develop new on-dock cold storage capacity and the new post-Panamax container cranes to be delivered early next year,” noted Raul Alfonso, the port’s executive vice president and chief commercial officer.

In August 2015, the Port Tampa Bay Board of Commissioners approved a new lease with Port Logistics Refrigerated Service to develop a new 130,000 square foot state-of-the-art on-dock cold storage facility to handle refrigerated imports and exports. That facility opened this past summer.

As for the newest member of the club, there will be many beneficiaries of the change in policy, according to Reinhart. “Shippers will see lower transportation costs and a longer shelf-life for their products, consumers will see lower prices at the store, and there will be environmental benefits from reduced emissions,” he said. And, if all goes well, the Port of Virginia might see the development of new cold storage capacity as well.

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American Journal of Transportation

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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 Fortune, Forbes, Chief Executive, Computerworld, and Jane's Defence Weekly. He was educated at Columbia University.