With more services in the pipeline to connect the U.S. port of Philadelphia with produce-growing regions, Holt Logistics president Leo Holt is positive about what increased trade will mean for fruit and vegetable traders. Before the Produce Marketing Association's (PMA) Fresh Summit kicked off in Anaheim last week, www.freshfruitportal.com caught up with Holt who also discussed the industry's health tie-in and his thoughts on Guatemala's proposed Interoceanic Corridor.

"It's now no longer just farm to table. It's farm to health care," says Holt.

Operating from a trading hub that can service 100 million consumers in an "easy day's drive", the executive highlights a demand-driving, healthy awareness in the U.S. that warrants a range of infrastructure developments and studies into new trade routes.

"The scientific research and the medical research is pointing out the importance of a healthy diet and moving towards a diet with significant plant-based origin, whether that's leafy green vegetables that are coming from Mexico or whether that's grapes or avocados from Chile," he says.

Leo Holt

"As a result, we think for businesses like ours - whether it's supply, carriage, logistics or distribution within the United States - really the market is just being cracked.

"As a result we think it's both opportune for us to expand our footprint, but it's also opportune for the folks that are consuming good, healthy products."

In addition to existing routes that already make the Philadelphia region a key import hub, Holt says further opportunities will come through a new service from leading steamship lines that will include the port in a route from South America's west coast to the U.S. East Coast.

He says the initial announcement involved Mitsui OSK, American President Lines and Hyundai Merchant Marine, however the latter would likely be replaced by YangMing Marine Transport Corp.

"The latest service will have its first call in Philadelphia at the beginning of December, and they’re loading product in South America now...it goes to New York and other ports, but it's adding Philadelphia which is the reefer hub on the East Coast," he says.

"It's big news for us in Philadelphia, but it also points out a continuing evolution of the trade patterns, how companies we already handle like Maersk Line, Hamburg Sud, CMA CGM and the Mediterranean Shipping Company, all these folks are vying for increased participation in the refrigerated cargo world, whether that’s fruit products or some other refrigerated cargo.

"I think in some cases it will bring the product closer to the consumptive market; in other cases it will bring product into what I would like to think is a more user-friendly environment – we're specialists in the reefer business so this is a piece of the puzzle. You have to look at it incrementally as an add-on to a variety of services that already exist."

Possible Mexican route

With Florida's Port Manatee set to run a new service from Mexico on Oct. 28, Philadelphia's industry has also been looking for a similar deal.

"Ship Philly First has been successful in attracting the attention of both shippers, receivers and steamship lines with a serious study underway to establish a regular container service from Veracruz, Mexico to Philadelphia by a number of lines," says Holt, who is a member of the advocacy group.

"I think that would open up an alternative pipeline for Mexican producers that are already well established in the United States.

"Instead of bringing them across the country by truck – which has a much larger carbon footprint, a longer run rate and a pretty high expense - we are now in a position where we think we can see a significant benefit being afforded to shippers and receivers, so we’re excited about that as well."

He says Mexico's good highway system and well-established produce distribution system mean the proposed route would cater to a range of products from throughout the country.

"For Veracruz it won’t just be the products that are local. It will be everything from beer to avocados - which are very robust into the United States as you know - and a lot of table grapes, limes and other products.

"It also gives the folks on the supply side a chance to differentiate themselves. You really lose that differentiation when you cross the border and essentially change identities – it goes from being from 'Mr. Juan Lopez' to 'Product of Mexico'.

Additional developments

Holt explains the Delaware River dredging project is well underway, while the US$175 million New Jersey's Paulsboro renaissance project will also be positive for trade into the region. Additionally, the river now has the capacity to host 5,500TEU (twenty-foot equivalent unit) 'Monte' vessels from Hambug Sud, up from a previous depth of 4,000TEU in July last year.

"Their [Hamburg Sud's] traditional names start with CAP and now they have these Monte class vessels which are 5,500TEU vessels," Holt says.

In a release sent yesterday, the company said the Monte Rosa had docked at the Packer Avenue Marine Terminal in South Philadelphia for the first time.

"The Monte Rosa represents the next generation of refrigerated cargo ships to dock in Philadelphia,"Greenwich Terminals LLC president David Whene said in the release.

"As the first of several 5,500 TEU ships to be phased into the existing East Coast-Brazil service line, this vessel will greatly increase our capacity to deliver fresh South American produce to the Philadelphia market and beyond."

Holt says there is a race to develop new infrastructure in terms of terminals and technology in order to cope with the dredging development.

"5,500TEU will be the largest that Philadelphia is handling on a regular basis and we have the capacity to go much bigger as the channel deepens," Holt says.

"It point out Philadelphia will be able to scale itself very effectively as we come into the next decade of development, and as the Panama Canal delivers its promise of broadening as well."

One country aiming to compete with Panama in the Pacific-Atlantic shipping route stakes is Guatemala with proposals for its own 'Interoceanic Corridor'. When asked about the project, Holt says his company could potentially use the project if it proves successful, but it will need to be proven as feasible.

"All of these wonderful masterworks can happen. Human ingenuity and human engineering proves that it can happen. Is there a requirement for it? It's a question that's really a demand analysis," he says.

"That can be an absolute boon or it can be a bane. Environmentally as well as for other reasons, I’m not quite sure. The biggest vessels, much bigger than what we'll ever handle in Philadelphia, will not likely fall on the East Coast anyway.

"Having a bigger, better, cheaper alternative always seems to be important, but I have to question the cost. That’s not to say we wouldn’t handle a ship if there was one and it came through."

He concludes that any infrastructure project, whether it be rail, canal or something else, is about creating the opportunity to drive down the per unit cost either for the steamship line or for the shipper.

"Eventually it's supposed to benefit the consumer at the other end."

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