Monthly Archives: July 2017

Organic sales inch upward for some foodservice suppliers

Organic produce generally isn’t as popular among foodservice operators as it is at retail, largely because of its price.

Still, several suppliers offer a number of organic products for their foodservice customers, and many report at least a small uptick in sales.

Church Brothers Farms, Salinas, Calif., launched its organic salad offerings about a year ago, said Kori Tuggle, vice president of marketing and business development.

“We’ve started and have kept it simple with three ‘staple’ organic salad items: wild arugula, spinach and spring mix,” she said.

The company’s organic demand is increasing “modestly” among foodservice customers, Tuggle said.

“I believe operators are still looking to offer organic items. However it has to meet their food cost limitations,” she said.

Boskovich Farms Inc., Oxnard, Calif., offers a full line of organic vegetables “with sustained growth projected for 2017,” said Mike O’Leary, vice president of sales and marketing for the fresh-cut division.

Sales of organic baby spinach have held steady, and it continues to be popular at foodservice, he said.

Del Monte Fresh Produce NA Inc., Coral Gables, Fla., continues to expand its product offerings to meet the demands of consumers who prefer organic produce, including avocados and bananas, said Dennis Christou, vice president of marketing.

“We supply different offerings to different segments or venues,” he said. “For instance, organic avocados are sold to two of the casual dining chains we supply.”

Demand for Arcadian Harvest Organic from Mann Packing Co. Inc., Salinas, Calif., continues to grow, said Gina Nucci, director of corporate marketing.

The product is particularly popular at universities and organic-focused restaurants as well as retailers, like Whole Foods salad bars, she said.

Arcadian Harvest Organic, available year-round, combines four lettuce varieties, like green leaf, red leaf, tangos, lollo rosa, batavia and oak leaf, according to the company’s website.

In the avocado category, Robb Bertels, vice president of marketing for Mission Produce Inc., Oxnard, Calif., said there currently is a “little bit of demand” for organic product at foodservice, especially from specialty restaurants. But he said demand seems to be growing.

“Millennials have a certain passion for organic,” he said, so he expects that trend to result in increased organic sales.

Mission Produce ships organic avocados in white boxes with purple accents so that the product stands out in distribution centers or storage areas, he said, distinguishing it from boxes of conventional fruit.

D’Arrigo Bros. Co., Salinas, Calif., offers organic versions of its Andy Boy romaine hearts and Andy Boy broccoli rabe, said Claudia Pizarro-Villalobos, director of marketing and culinary.

Andy Boy organic romaine hearts come in cartons of 12 three-count packs and seven six-count packs, and Andy Boy organic broccoli rabe comes in 1-pound bunches.

Story by Tom Burfield

Amazon Launches Its Own Social Network, Spark

Amazon logo on a flatscreen next to two gears

Amazon wants all shopping addicts to stay in touch, so the company decided to launch its own social network, Spark. This network is meant to bring all Amazon users together, and make it easier for them to find more people with the same interests.

Amazon decided that people who like shopping should have a place of their own to socialize and exchange ideas. Therefore, it came up with the idea of creating a social network called Spark. Here, people should be able to ask for advice regarding places where they can buy certain items, decoration or household ideas, or merely talk to other shoppers who like the same things.

The first time you access Spark, you will have to fill in a list of interests. Then, based on this list, Amazon will show you relevant posts and custom content coming from other customers who share your interests. You can even communicate with these people, by commenting on their posts or even by just sending them smiles.

You can also buy products directly from your feed

Apart from stories, customers can also share products. These products are available for sale on Amazon, and you can purchase them by just tapping on them. Those you can buy are market by an icon of a shopping bag placed next to them. You can post your own stories, or share whatever products you like from the field placed on top of your feed.

There’s no easy business to launch an entirely new social network. However, Spark is easy to use, and comes embedded into the Amazon app. Rumors say the company might be working on a new social app, namely a messaging service called Anytime. Amazon seems to be determined to occupy a place among social media companies, and is doing everything it takes to get there.

Story by Ryan Harris at Mirrordaily,com

Legislation introduced in House to delay ELD mandate two years

A bill has been filed in the U.S. House to delay the compliance date of the federal government’s electronic logging device two years, to December 2019. If enacted, carriers would have two additional years to adopt electronic logging devices.

The legislation was introduced Tuesday and referred to the House’s Transportation and Infrastructure Committee.

Texas Republican Rep. Brian Babin filed the ELD Extension Act of 2017. Babin’s introduction of the bill came a day after a House panel recommended that the U.S. DOT study whether a “full or targeted delay” of the mandate is needed. Both developments signal that efforts to engage Congress on the issue have gained traction. In a report issued Monday, members of the House cited the burden placed on smaller carriers, like owner-operators, and questions surrounding enforcement and “technological concerns” as reasons to delay the ELD mandate.

For Babin’s ELD delay bill to become law, it must be passed by the House and Senate and signed by President Trump.

Other than passed as a standalone bill, the legislation could also be attached to broader legislation, such as the DOT appropriations bills currently in the works in both chambers of Congress.

Lawmakers have used the DOT funding bills as avenues to enact trucking policy reforms in recent years, such as the reversal of some of the hours of service changes implemented in 2013.

Story by James Jaillet

Quarterly Rockstar And June Employee of The Month

Congratulations to Eric Debrand, ReedTMS Logistics’ Quarterly Rockstar and Brian Campbell ReedTMS’s Employee of the month for June. Eric and Brian have routinely gone above and beyond their own job responsibilities to help the team in whatever way possible.

Some of the comments as to why they were nominated are as follows:

“Brian is a Wisconsin local driver and the first week this month he ran Carbon loads which is not under his job description and is a lot of work.”

“Brian has helped us out and also worked every weekend this month (he didn’t have to, just helping us out.)”

“The third week this month Brian did us another favor and took an Over The Road load to Ohio, and got a backhaul, brought it back to Wisconsin and still worked that weekend helping us out on the local side!”

“Brian has a great attitude and is very helpful with updates and carrier communication for our customers.”

“Eric DeBrand is the ultimate team player by switching his schedule to accommodate us in our time of need.”

“Eric has recently come aboard and has an outstanding attitude. On top of this he is always willing to help employees in whatever they need and has even taken on additional responsibility to temporarily fill a need”

‘Eric is an amazing team player, but on top of that the guy simply knows what he is doing and gets it done at a high level without giving excuses”

 

Thanks for all you do Eric and Brian, keep up the good work!

How Uber’s Technology Represents Progress for Trucking

Although trucking has a reputation as an industry that is conservative and slow to change, it actually is an early adopter of technology. CB radios were big with truckers long before they became popular with consumers. As international freight and logistics in all its forms – air, freight and rail – remains painfully offline, trucking has already hit its tech stride.

Transportation service provider YRC Worldwide, for example, is rapidly blending technology into its LTL, or less-than-truckload, hauling network, Justin Hall, the carrier’s customer service chief, said in recent industry remarks.

Both giant carriers and start-ups are deploying technology to reducing excess capacity and make trucking even more efficient. More than a baker’s dozen of “Uber-for-freight” start-ups were joined this year by Uber itself with a cloud-based, on-demand, full truck-load freight brokerage called Uber Freight.

This isn’t just a drive-by-night business. Freight tech start up Convoy – which has received seed funding from the founders of LinkedIn, eBay, Salesforce, Expedia and others – recently landed Unilever as a client, proving that the big boys are listening.

Even Amazon.com – whose founder Jeff Bezos also has invested in Convoy – has on-demand trucking aspirations.

Using technology to connect customers and truckers is far from a new idea.

U.S. domestic trucking has been shifting toward technology for nearly half a century. Truckers and customers used to coordinate loads through bulletin boards at truck stops. This was digitized when Dial-a-Truck, now called DAT, launched a telephone freight matching service in 1978, followed by an electronic version years later. Electronic load boards have since evolved into  $150-billion freight brokerage market with brokers leveraging sophisticated technology to manage both inbound and outbound shipments for clients.

Trucking in the United States has two key drivers – incredible infrastructure and outstanding technology. Together they helped lower the U.S.’s percentage of GDP spent on logistics to “only” 7.5 percent. That compares with around 18  percent in China and well over 20 percent in less developed countries.

In 2015, trucking revenue reached $726.4 billion, with 3.6 million trucks moving 10 billion tons of freight. That’s a lot of freight. But it can get more efficient. As a matter of fact, there are at least 10 on-demand freight companies that have billed themselves as an “Uber-for-freight”:

Story by Eytan Buchman

3PLs Report Freight Volumes Better in 2Q, but Margins Compression Lingered in Peak Season

Freight brokerage firms benefited from stronger volume and gross revenue in the second quarter but their net revenue and income will not be as fruitful because margins were tighter than a year ago during the peak season, according to industry analysts and executives.

Each of the six publicly traded third party logistics providers, or 3PLs, is expected to announce revenue growth but only three may generate higher profits than a year ago, according to a Bloomberg News consensus forecast.

XPO Logistics Inc., Echo Global Logistics and Radiant Logistics Inc. could report double-digit earnings growth, but C.H. Robinson Worldwide, Expeditors International of Washington and Hub Group are due to report double-digit declines, although Bloomberg News projects all six will be in the black.

Industry analysts forecast that earnings per share will range from a penny to 91 cents for the quarter ended June 30.

Tighter margins — the gap between the price that brokers charge and they pay a truck driver — explain why there is a dichotomy between revenue and profits, according to industry experts.

XPO Logistics, C.H. Robinson, Expeditors International, Hub Group and Echo Global Logistics rank Nos. 1, 5, 6, 28 and 39, respectively, on the Transport Topics Top 50 list of the largest logistics companies in North America. Radiant ranks No. 36 on the freight brokerage sector list.

“In the brokerage market, our sense is spot market demand increased significantly in June. In addition, spot market carrier rates outperformed the five-year trend throughout the quarter, which we believe could create net revenue margin compression for contractual freight levered brokers such as C.H. Robinson,” wrote Stephens Inc. analyst Jack Atkins.

The public narrative matches what several 3PL executives told Transport Topics when recapping the second quarter. In some cases, net revenue also increased year-over-year, although at a slower pace than the gross; in others, the net was flat to down year-over-year. (Privately held 3PLs often will disclose net revenue data but shy away from releasing net income figures.)

Gross revenue surged double-digit percentages at GlobalTranz Enterprises after completing three acquisitions in the first half of the year, including Worthington Logistics Solutions in June. GlobalTranz CEO Bob Farrell told Transport Topics that net revenue also rose “significantly” because the company is expanding very quickly.

Nevertheless, he acknowledged that peak produce season compressed margins with clients under annual contracts because when truckload capacity tightened and spot market rates spiked, drivers obtained the upper hand in price negotiations.

GlobalTranz ranks No. 13 on the Transport Topics freight brokerage sector list.

“Gross profit [margin] percentages in the 2Q of 2017 will be lower than it was in 2Q of 2016, but we’re growing so rapidly that our numbers are rapidly rising,” Farrell said.

Financial results were similar at Trinity Logistics where gross revenue surged 22% year-over-year. After deducting transportation costs, the results still rose but only about 3%. Chief Operating Officer Rich Clair said he was pleased with the results because freight volume grew among existing customers, even though negotiations with carriers became more challenging in the quarter.

Trinity Logistics, based in Seaford, Del., ranks No. 22 on the freight brokerage sector list.

“What we’re surmising is some of the larger carriers, such as the Schneiders and the Swifts, took trucks out of service in the fourth quarter of last year, maybe that has been enough to mute capacity a little bit. Particularly in the Southwest, we saw more resistance for price reductions on the carrier side in the second quarter than last year,” Clair said. “We’re wondering whether the smaller carriers are getting more data on the spot side to give them better pricing leverage than they’ve had in the past.”

Sunset Transportation of St. Louis is also increasing in size as freight volume, gross and net revenues were all up about 20% year-over-year.

“The pendulum began to swing in favor of carriers during the second quarter of 2017. Spot truckload freight availability reached its highest point since September 2015 (63% year-over-year), leading carrier experts to believe the great ‘freight’ recession is behind them,” the company wrote in an early July blog post.

Nevertheless, the company acknowledged that margins tightened at the end of the quarter.

“The compression happened with our contractual customers between Memorial Day and the Fourth of July with the typical spike in demand. But it’s also opened the door for us to assist customers without contractual arrangements by providing capacity at [higher] open market prices with better margins,” said Mike Fritz, Sunset Transportation carrier relationship manager.

“Looking ahead, we believe a key focus on quarterly earnings calls this earnings season will be the potential sustainability of the strength in June, or if this was a strong seasonal surge,” Atkins added.

Fritz said that he expects margins to ease until September or October, when “things may get dicey” for shippers and brokers because of the unknown effects of the electronic logging device mandate and the typical holiday season ramping up.

Story by Ari Ashe at Transport Topics