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NEW TRADE ROUTE ??? : Veracruz-Philly ocean service is 'in the red zone'

by Tad Thompson | September 05, 2014

"When you have a band of stubborn, bull-headed, determined entrepreneurs, they make things happen,"
said Fred Sorbello, who recently stepped down from his role as president of Ship Philly First.

Such a position is quickly driving a direct refrigerated ocean freight service between Veracruz, Mexico, and the Philadelphia port community.

On Sept. 4, as many as 20 Ship Philly First members were holding a "call-a-thon" to develop southbound trade for a round-trip link, which is already rich in promised northbound refrigerated cargo. Between 250 and 300 prospective exporters would be contacted, Sorbello said. 


The Delaware River, seen here from the deck of a break bulk ship docked in the Gloucester Marine Terminal in Gloucester City, NJ, cumulatively makes one of the largest fruit ports in the United States.

Sorbello said the aforementioned aggressive membership of Ship Philly First has done a great deal of due diligence for steamship lines that potentially will offer a regular route between Mexico's east coast and the region that is the keystone for the greatest population center in the United States.

"Many steamship lines are interested and are doing their due diligence"
toward creating the new service, he said.

Ship Philly First members' groundwork provides a strong lead for steamship companies' new business plans.

Sorbello said the first step toward fulfilling this concept was to talk to Philadelphia-area service providers — including government agencies — to confirm service from Veracruz was wanted, needed and practical. There was broad support at home, so work began with Mexico.

Ship Philly First is a non-profit, membership organization of private business owners who operate port-related companies in the Delaware Valley, the Mexican consulate of Philadelphia, Philadelphia Regional Port Authority and ProMexico, the economic development arm of Mexico.

The Mexican leaders helped open lines of communication in Mexico. The climax of this was a July 16-18 trade meeting in Veracruz. 

As The Produce News reported in July, the summit was a tremendous success, according to Carlos Giralt, Mexican consul of Philadelphia, and other Ship Philly First leaders who were involved in the meeting. 

On Sept. 4, Sorbello recounted that Mexican shippers of fresh fruits and vegetables — as well as other commodities — were extremely enthusiastic about having a direct, weekly refrigerated ocean container service to Philadelphia.

"There is no question that Mexicans want this service and they want it now,"
Sorbello said.

One produce shipper guaranteed that he would export 150 containers per week, 52 weeks a year, on such a service. Such an offer immediately "gets you to second base" in planning northbound cargo service from Veracruz, Sorbello said.

Going into the July meeting, Sorbello expected Mexican produce shippers to have seasonal offerings but he was pleasantly surprised by the ability there to ship fresh fruits and vegetables 52 weeks a year. Limes, pineapples and avocados are key year-round Mexican commodities for the U.S. market.

Sorbello said eight of Mexico's top meat exporters were involved in the Veracruz meeting and gave a great deal of support to "a more affordable delivery of goods" via a direct ocean service to the northeastern United States.

Sorbello's private company is Mullica Hill Group Cos., a Mullica Hill, NJ-based operation that specializes in warehousing meat.

Sorbello said the drought in the western United States has reduced herd sizes to modern-record all-time lows. Meanwhile, meat exporters Australia, New Zealand, Canada and Mexico are gearing up to enjoy all-time high meat prices in the U.S. It will be at least a couple of years until the U.S. meat imbalance will correct itself, Sorbello said.

The Sept. 4 call-a-thon was an extension of the third step in preliminary diligence to create this service by finding adequate southbound cargo. Sorbello said that businesses in Pennsylvania, New Jersey, Delaware and southern New York state ship $10 billion in goods to Mexico each year. A fair portion of that would be suited for this new ocean service, he added. Fresh and frozen poultry and meat, auto parts, machinery and possibly pharmaceuticals are all potential southbound cargo from the Philadelphia area.

The southbound cargo may not be as time-sensitive as produce on the northbound route, which would run five days from port to port. Thus, steamship companies maybe don't need a direct route when returning to Mexico.

Sorbello outlined the advantages of this route. First, he said it offers an alternative to trucking. 

This was expressed by potential Mexican trade partners as a very key consideration. 

Using ocean freight not only reduces cost, but the Mexicans — and others — feel "there is only such much trade with border crossings only. It is more cost effective to go to the northeast U.S. directly from Veracruz to Philadelphia."

A regularly scheduled service is very attractive to traders. 

For example, if a ship discharges every Tuesday, importers can plan long-range sales programs accordingly.

Sealed ocean container shipping from plant to plant avoids problems with sealed tractor-trailers being opened for inspection at border crossing. There, the cold chain is broken and there is the potential for a security breach. 

Ship Philly First plans a follow-up export seminar in Philadelphia in October. 

Sorbello used a football analogy to describe Ship Philly First progress toward a direct link with Veracruz: "I feel we are definitely down in the red zone. We are about to get over the goal line."

Of course, that "band of stubborn, bull-headed, determined entrepreneurs" make an excellent offensive line.

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