Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Produce importers prepare for tougher Mexican tomato inspections; CBP agents find $18.5 million in drugs hidden in broccoli shipment; Penske Logistics appoints new managing director for Mexico; TNW acquires transload and logistics facility in South Texas.
Produce importers prepare for tougher Mexican tomato inspections
Tomatoes imported from Mexico will begin undergoing tougher inspections at the border starting April 1.
The increased inspections, which could range anywhere from 60% to 92% of all trucks carrying tomatoes, is part of the U.S. Department of Commerce’s deal with Mexican growers to suspend its anti-dumping investigation into the produce.
Dante Galeazzi, president of the Texas International Produce Association (TIPA), said there could be longer border waits, which may impact supply and prices.
“More inspections is not ideal because it’s going to be another cost in the supply chain,” Galeazzi said in an interview with FreightWaves. “Our biggest concern is how is that going to impact upstream distribution.”
Mexico is the No. 1 supplier of tomatoes imported by the U.S., accounting for 87% of the value of total U.S. tomato imports at $2.06 billion in 2018, according to the U.S. Department of Agriculture (USDA).
The USDA will inspect all round and roma tomatoes (including stem on) and grape tomatoes in bulk (those in retail packages of 2 pounds or more) for quality and condition defects at the U.S.-Mexico border, according to the new agreement.
Laredo and Pharr, Texas, along with Nogales, Arizona, are where the majority of tomatoes from Mexico cross into the U.S.
Lance Jungmeyer, of the Nogales-based Fresh Produce Association of the Americas (FPAA), said the annual costs of increased labor, inspection fees and storage costs at the border could reach $50 million annually in Arizona.
Before the new tomato agreement was reached in November, Jungmeyer said less than 10% of imports were subject to inspection.
Founded in 1944, the FPAA represents more than 120 U.S. member companies involved in importing and marketing fresh fruits and vegetables grown in Mexico and distributed across North America.
“When the U.S. is out of season, Mexico is an important source for tomatoes, cucumbers, peppers, melons and so many healthy parts of our diets,” Jungmeyer said in a release.
TIPA, founded in 1942, represents Texas companies involved in the entire fresh produce supply chain, including trucking, box manufacturers, seed distributors, farmers, growers and sellers.
The organization is based in the city of Mission, in the Rio Grande Valley region of South Texas near the Mexican border. The nearby Pharr-Reynosa International Bridge has been the busiest entry point for Mexican produce into the U.S. for the past three years.
The Pharr-Reynosa International bridge had 55,210 truck crossing in January, compared to 55,584 during the same period last year.
Galeazzi said he is optimistic that in Texas the increased tomato inspections won’t cause long delays.
“In South Texas, we’re familiar with laws requiring inspections upon arrival for many commodities, specifically onions and avocados,” Galeazzi said. “So Texas is familiar with the inspections process – calling the local inspectors office, setting aside space for them holding onto the truck, making sure we have our Saturday requests in early, etc. Now, there’s obviously going to be some folks in the tomato industry who have not gone through this process. I’m sure there will be a learning curve.”
Galeazzi also said the Texas Cooperative Inspection Program has hired 20 additional inspectors specifically for tomatoes and has more staff on standby if needed for tomato inspections. The program reports both to the USDA and the Texas Department of Agriculture.
“There’s a good partnership between the inspection agents and the industry here. We really encourage our folks in the tomato industry to take advantage of that partnership before the inspection time arrives, so they do not have disruptions in distribution,” Galezzi said. “That’s our biggest concern, is just making sure we’re able to keep business and product flowing through this process.”
CBP agents find $18.5 million in drugs hidden in broccoli shipment
Agents with United States Customs and Border Protection (CBP) intercepted almost $19 million in narcotics hidden in a tractor-trailer.
CBP found the drugs, mostly methamphetamine, on February 16 at the Pharr-Reynosa International Bridge crossing, according to a news release.
An officer referred the tractor-trailer to a cargo facility for further examination, where 432 packages of suspected narcotics were found in the trailer, according to the release.
The drugs included methamphetamine, marijuana, heroin and cocaine.
“This was truly a notable seizure in the commercial environment,” Carlos Rodriguez, director the ports of Hidalgo/Pharr/Anzalduas director said in a release. “Our officers’ ability to maintain an excellent enforcement posture while keeping trade flowing and uninterrupted is one of our main priorities.”
The case is under investigation by Homeland Security Investigations, according to the release.
Penske Logistics appoints new managing director for Mexico
Reading, Pennsylvania-based Penske Logistics has appointed Bob Black as the new managing director for its Mexico operations.
Black’s responsibilities will include overseeing operations and leading business growth and development for Penske in the region.
According to its website, Penske Logistics provides a variety of services to shippers in Mexico, including: cross-border support for shipments; transportation management; distribution center and warehouse management; lead logistics; cross-docking; in-plant material follow-up; and many others.
Black has been a Penske employee since 1999 and has held a variety of operational management roles across the U.S. in the automotive, food, manufacturing and furniture sectors.
He was most recently general manager, based in Reading, Pennsylvania, leading a team of key auto, furniture and convenience retail store accounts.
Black also headed several startup operations, including a fresh channel cross-dock. He was also a distribution center management product line manager.
While in Spring Hill, Tennessee, Black held operations and warehouse manager roles. His first job titles at Penske were in quality inspection and warehouse supervising.
Black began his professional career at Dawn Food Products, working in sales and inventory control.
”We’re very pleased to appoint Bob to lead our ever-expanding operations in Mexico,” said Bill Scroggie, Penske Logistics senior vice president of international operations. “He has extensive experience with virtually every facet of the supply chain.”
Black replaces Penske’s former managing director of Mexico Alejandro Graniewicz, who has left the company.
TNW acquires transload, logistics facility in South Texas
TNW Corporation (TNW), a Dallas-based privately held operator of short line railroads and transportation logistics services, has acquired a multi-commodity bulk material handling and storage facility in Harwood, Texas.
Financial terms of the acquisition were not disclosed.
The 20-acre facility meets a growing demand for transloading, logistics services and product storage, TNW said in a release.
Located between San Antonio and Houston near Interstate 10, the facility offers a direct connection to a Union Pacific Railroad line; high volume, high-speed loading and storage for rail-to-truck services; and total storage capacity of 414,000 cubic feet.
The facility is operated by TNW Logistics and is rail-served by Texas Gonzales and Northern Railway (TXGN), a TNW company. Commodities transloaded on-site include agricultural products, sand and raw materials.
“This acquisition allows us to serve our clients more efficiently and cost-effectively,” Wade Hoffmann, TNW vice president of marketing and sales. “We are streamlining our transloading and logistics services to offer customers a wider variety of value-added solutions to their storage and shipping needs.”