Transporting wine tanks a million $
What’s the hot topic in wine transportation as (the year draws to a close? Hands down, the answer is fuel costs. Trucking companies are adding fuel surcharges of 5% to 10% on top of the regular rates and, so they say, still are not meeting the added expense.
In the weeks before Labor Day, the cost of diesel fuel in California rose by 50 to 60[cent] a gallon. Although a “leveling off” has been promised, no one is talking about any drop in prices at time of writing.
The fuel crisis isn’t limited to California by any means. Fred Hosking at Hoyt Shepston said that shipments had been disrupted in Europe in several cases because of fuel protests and trucker blockades closing the ports. On the other side of the globe, Hosking noted that there had been a big increase in exports to Southeast Asia and to China through the port of Hong Kong. “We’ve also seen a big push in wines from New Zealand coming into California,” he added.
And it isn’t only fuel costs that are causing problems; there’s also a built-in cost to many of the new regulations, all of which involve more paperwork.
Also, there’s the ever-present problem of finding people to drive the trucks, not easy apparently in booming economic times when there are plenty of jobs to go around.
Cindy Bolla of Bolla Freight Lines said her family has been in the trucking business for more than 40 years. (The company was known as AB Express until three years ago.) “We are having trouble with some customers refusing to pay a 5% surcharge,” she said. “Since we use independent drivers, we pass along 4% of that to the drivers to help with pump prices.” Perhaps a more worrisome problem in t the e long run, according to Bolla, is the lack of drivers. “The economy is booming. There is a lot of construction going on and that siphons off drivers.”
(North Coast Wine Transport resisted a surcharge for some time, but added a 5% fee beginning in October.)
Wesley Cameron of Butch Cameron Trucking said he thought a lot of his customers were in a state of shock. “We just can’t absorb that kind of increase in fuel costs. Some of it has to be passed along. I don’t think a lot of our customers realize what a large part of our costs fuel is.”
Cameron was also concerned about lack of drivers, which he tied to new regulations, which also adds to the costs. “People just don’t want to go into this walk of life anymore. A driver never has the same hours twice. One morning he may be up at 1 a.m. to beat traffic, the next day e starts at 8 p.m. going the other direction. You can’t have stable family life.”
On other issues, Cameron said that wineries need to understand that when they ship (bulk) liquid loads, it’s going to be more expensive because there is no way to consolidate the load. “In case goods, you can put shipments together, so the costs are shared, but not with liquid.”
Gary A. Scannavino, owner of Cherokee Freight Lines, which he started in 1966 after growing up in the family trucking business, said most of his customers understood the price increases. “What really hurts,” he added, “is that there is cheaper fuel elsewhere. California is about 40[cent] a gallon over the national average for diesel fuel. But I guess we are all in the same boat.”
John Yandell, owner of Yandell Truckaway, said that in the past decade, deregulation was certainly the largest single factor affecting the trucking business. “Although I think using the word is a misnomer. In some ways, we are more regulated than ever regarding hours of service, clean air mandates, drug and alcohol testing and other matters. Understand, I think a lot of those are good issues if they lead to greater safety, but it does compound our paperwork.” Yandell said that new regulations will be issued January 1, 2001 regarding the number of hours drivers can drive and other issues.
He added that another big change now is that everyone wants information quickly through electronic data tracking and other means.
Charlotte Groskopf, one of the owners of Groskopf Warehouse, also noted the importance of fast communication of information to the customers. “We have a new system up and running that gives a daily report on all orders. That allows the customer to invoice in a more timely manner.”
She said that in terms of trucking, Groskopf has restructured its own trucking operation, doing its own consolidation pickups and operating a smaller and more cost-effective operation. She said the company was now divided into logistics and warehousing and the trucking operation had been folded into logistics.
Guarantee Wine Storage is a startup business in New York, designed to serve commercial operations and consumers. “We have implemented a computerized system to bar code the wines,” said Elizabeth Van Dyk, who is in charge of the operation. “Using our system, we can pull out and capture a lot of information. If the wines belong to a restaurant, we can make that information coincide with a bin number, the year, the volume, a try-by date, initial purchase price, what it is being sold for and other information.”
The company is targeting hotels, restaurants, auction houses, retail wine stores, importers, national promotional agencies such as Wines of Spain as well as local wineries.
Another fairly new company is P&O Nedlloyd, which was formed in late 1996 as a joint venture between P&O and Royal Nedlloyd. The new company represents the liner shipping interest of the two companies and is one of the three largest container carriers in the world.
RTR Warehouse, Inc., just celebrated its second year in business in Napa. Ron Groskopf said they were shipping wine to 48 states, plus Canada by both rail and over the road, as well as operating a storage facility in Napa.
“There is just such a huge demand in the industry right now,” he said. “There’s a lot of pressure to find enough equipment to move wine out of California.” He said it was important for the smaller shippers to plan ahead and not get caught in the crunch.
As for the fuel situation, Groskopf said he had never seen anything like he is seeing now. “I wish someone could explain it. I think it’s a big rip-off.”
Playing It Cool
An important issue when it comes to shipping wine is temperature control. The Astro-Cooler blanket, developed by Innovative Energy, is used by a great many wineries and shippers and protects from both cold and heat. The product was developed ten years ago and can be used far both shipping and as a wrap for storage tanks. The Astro-Cooler Tank Wrap has a somewhat different configuration than the blanket.
Mike Foisy said the Astro Cooler is used by about 100 wineries for tanks and he believes that most of the wine shipped in this country is covered by Astro- Cooler blankets.
Astro-Cooler is a reflective insulation that consists of a polyethylene bubble pack covered with aluminum foil. According to Foisy it reflects 95% of the radiant energy which strikes it.
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