Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Avocado imports from Mexico fare well during pandemic; Caterpillar’s Texas distributor building new factory; General Motors to make masks in Mexico; new logistics app aids supply chain.
Avocado imports from Mexico faring well during pandemic
Avocados were in the middle of what was looking like a very good year when the coronavirus pandemic interrupted the market.
While prices and sales for avocados have not suffered like other fresh produce, the current restrictions on social distancing and shelter at home recommendations are still having an effect, according to avocado producers.
“One of the things that we’re seeing is a lack of liquidity in the market; there’s a concentration
on purchasing power among major retailers,” Aaron Acosta, corporate relations manager for Villita Avocados, told FreightWaves. “More than anything for us it is an uncertainty. we have to vet our buyers, and we still have to have some trust that in 20, 30 days, when those payments come up that they will have the liquidity to make them.”
Pharr, Texas-based Villita Avocados grows and imports Hass avocados from the state of Michoacán in central Mexico, where 80% of Mexico’s avocados originate. More than 60% of those avocados come in through the Pharr International Bridge along the border, according to data from the Texas A&M University AgriLife Extension Service.
For the month of February, the Pharr International Bridge was the leading gateway for U.S. imports of avocados, dates, figs and pineapples, totaling $294.82 million, according to data compiled by WorldCity. Port Laredo was second, totaling $212.29 million in imports.
Mexico was the leading exporter of avocados, dates, figs and pineapples into the U.S. during February, totaling $546 million.
Refrigerated truck volumes and the Reefer Outbound Tender Rejection Index have fallen 49% since March 26. Chart: (ROTVI.TX) (ROTRI.TX) (RITRI.TX)
Acosta said one of the current issues for companies like Villita Avocados is the impact of the pandemic on the rest of the year and possibly next year, not only on consumer spending but also on the willingness of companies to order goods and make payment.
“We are seeing a lot of major retailers draw down their lines of credit” during the pandemic which begin in North America around mid-March, Acosta said.
“It could be two things: it could be access to cheap capital, which would be the bright side of the argument,” Acosta said. “It could be, in the worst case scenario, to keep making purchases, keep up with payroll, because we won’t see corporate earnings for many of these companies for a while, at least the public ones.”
On March 30, Mexico ordered the suspension of all economic activity not deemed essential in an attempt to contain the coronavirus. However, avocado production was deemed “essential” by the Mexican government.
“Growers and packers are working to supply current and future demand for all their markets,” APEAM, an association that represents growers in the western state of Michoacán, the country’s top avocado producer, said in a recent statement.
Avocado sales outpaced the total fresh produce category overall during March, according to data from the Hass Avocado Board. Sales of avocados rose 18.1% in March, compared to the same time last year.
Acosta said they have plenty of avocados for the U.S. market.
“Right now making sure that all our retailers are supplied and that we keep the pricing as sustainable as possible for the American consumer,” Acosta said.
Caterpillar’s Texas distributor hiring 100 employees for new factory
Holt Cat, the largest distributor of Caterpillar equipment in the United States, said plans to open its new manufacturing facility remain on track in Waco, Texas.
San Antonio-based Holt Cat acquired the former Caterpillar Work Tools plant in Waco from Illinois-based Caterpillar Inc. in February. Holt Cat said it plans to build proprietary items such as Holt Spray King water trucks and tank products and custom-engineered products at the factory.
“Our May opening is still on schedule. We are confident we will find the quality of candidates we need in the Waco area to get the facility up and running successfully,” Beki Hutchinson, Holt Cat’s senior vice president of human resources, said according to the Waco Herald-Tribune.
Holt Cat said it is hiring 100 employees for the factory, including technicians, welders, fabricators and managers. Hutchinson said the company may use “remote interviewing tools” to interview job applicants.
The factory includes 107 acres with three buildings and a total of 170,000 square feet of manufacturing, warehouse and office space, the company said in a press release.
General Motors to produce 9 million masks in Mexico for coronavirus protection
Many of the face masks General Motors (NYSE: GM) announced on April 14 that it will produce at a factory in Toluca, Mexico, will be for its workers, the company said in a statement.
“We are very interested in contributing to the battle against the COVID-19 pandemic in our country and in supporting first-line doctors and nurses whom we recognize for their great effort to save lives in the face of pressing circumstances,” said General Motors de Mexico President and CEO, Francisco Garza, in a statement.
General Motors de Mexico will begin producing 1.5 million Level 1 surgical masks every month in a facility that normally manufactures engines for Chevrolet Equinox and GMC Terrains.
The face masks will be used for hospitals in Mexico City, San Luis Potosi and Guanajuato – cities where the company currently has manufacturing operations. The rest of the masks will be used by General Motors employees and its local distributors.
Houston tech company launches digital logistics platform to aid supply chains
Houston-based ChaiOne recently announced the spinoff of a digital platform focused on orchestrating logistics by solving problems related to visibility, communication and execution.
Velostics is a platform to make communication and execution of industrial shipments easier. The app aims to produce improved cash cycles for clients, cut a 90-day settlement down to one day, reduce overhead and improve output, company officials said.
“We have spent a lot of time with logistics managers, at facilities and terminals, in the field, with carrier dispatch and drivers,”Jay Tchakarov, vice president of Velostics said in a release. “One thing always comes up – mission-critical project shipments require tremendous collaboration because any delays and mistakes have a disproportionate impact on operations and deadlines. Velostics breaks down the barriers between disjointed systems and teams.”
ChaiOne is a software service startup that provides digital solutions for the energy, power and industrial sectors.