With Mexico as the largest supplier of fresh fruit and vegetables to the United States, valued at more than $6.5 billion annually, Nogales continues to be a top conduit for North American trade. Even when the U.S. government shut down and federal employees were furloughed last October, U.S. Customs and Border Protection workers remained on the job to clear load after load of perishables, and kept this massive trade pipeline moving.
And although Nogales is a small city, it has long been a point of crossing for the region—originally as a trade route, then later by Conquistadors in search of North American gold. In 1918, following a battle between the U.S. Army and Mexican militia, the previously open crossing built its first permanent border. In 1973, the Nogales-Mariposa Arizona Port of Entry was built to divert border-crossing truck traffic away from downtown, and by mid-2014, the newly expanded Mariposa port of entry will be completed.
The New Port of Entry: Almost Here
For decades, the Nogales-Mariposa port of entry has been operating well over capacity, struggling to pass more than 600,000 trucks and 2.6 million cars in recent years. Delays were legendary. For truckers, possible two- to four-hour waits were common during off-peak months, while four- to eight-hour delays in peak season made for major challenges in delivering perishable fruits and vegetables.
The new Mariposa port will double capacity, from four to eight commercial lanes, and significantly increase offloading areas. The project is on schedule for completion in August 2014, at a price tag of about $187 million, much of which came from the Recovery and Reinvestment Act of 2009, according to the U.S. General Services Administration.
Staffing of the new port remains a bone of contention—while the new 216,000-square-foot entry point promises to expedite crossing, there is still insufficient funding to add the additional 200 to 250 staff members required to run at full capacity.
Distributors and shippers alike are enthusiastic about the potential for increased efficiency, but note that the staffing issue remains an obstacle. “We’re still seeing a lot of trucks cross late,” remarked Gabe Nunez, managing member at Golden Desert Produce, LLC. “Maybe because it is not fully operational yet.”
“Even though they’ve increased the size of the facility, there are still delays,” confirmed Rick Burkett, director of sales at Greenpoint Distributing, LLC. “Not all the lanes are open,” he concedes, “but if it were fully manned, I think it could be more efficient.”
With Mexico as the largest supplier of fresh fruit and vegetables to the United States, valued at more than $6.5 billion annually, Nogales continues to be a top conduit for North American trade. Even when the U.S. government shut down and federal employees were furloughed last October, U.S. Customs and Border Protection workers remained on the job to clear load after load of perishables, and kept this massive trade pipeline moving.
And although Nogales is a small city, it has long been a point of crossing for the region—originally as a trade route, then later by Conquistadors in search of North American gold. In 1918, following a battle between the U.S. Army and Mexican militia, the previously open crossing built its first permanent border. In 1973, the Nogales-Mariposa Arizona Port of Entry was built to divert border-crossing truck traffic away from downtown, and by mid-2014, the newly expanded Mariposa port of entry will be completed.
The New Port of Entry: Almost Here
For decades, the Nogales-Mariposa port of entry has been operating well over capacity, struggling to pass more than 600,000 trucks and 2.6 million cars in recent years. Delays were legendary. For truckers, possible two- to four-hour waits were common during off-peak months, while four- to eight-hour delays in peak season made for major challenges in delivering perishable fruits and vegetables.
The new Mariposa port will double capacity, from four to eight commercial lanes, and significantly increase offloading areas. The project is on schedule for completion in August 2014, at a price tag of about $187 million, much of which came from the Recovery and Reinvestment Act of 2009, according to the U.S. General Services Administration.
Staffing of the new port remains a bone of contention—while the new 216,000-square-foot entry point promises to expedite crossing, there is still insufficient funding to add the additional 200 to 250 staff members required to run at full capacity.
Distributors and shippers alike are enthusiastic about the potential for increased efficiency, but note that the staffing issue remains an obstacle. “We’re still seeing a lot of trucks cross late,” remarked Gabe Nunez, managing member at Golden Desert Produce, LLC. “Maybe because it is not fully operational yet.”
“Even though they’ve increased the size of the facility, there are still delays,” confirmed Rick Burkett, director of sales at Greenpoint Distributing, LLC. “Not all the lanes are open,” he concedes, “but if it were fully manned, I think it could be more efficient.”
“In order to get the Mariposa Port of Entry, it took a huge lobbying effort,” said Margie Emmerman, director of programs and operations at the Arizona-Mexico Commission, based in Phoenix. And while she says the Commission is “poised and ready” to fight for the additional staff necessary to accommodate the port’s ever-increasing volume, the situation is far from a done deal.
“We have been understaffed for a while, but there are things we can do with the resources we have to make sure trade keeps flowing, such as adding more hours during peak times,” commented Allison Moore, director of legislative and regulatory affairs at the Nogales-based Fresh Produce Association of the Americas.
But the real issue is getting decision maker’s in the Capitol to understand the border’s needs. “For a long time, when Congress has addressed issues about the border, they’ve thrown resources at border patrol,” Moore explained. “Many people in Congress, especially those who don’t live near a border or port of entry, don’t realize that customs officers are just as important, not only for border security, but for economic security as well. The big push right now is getting Congress to see that, overall, Customs needs about 3,500 more people around the country; and we need about 200. The real safety issue is an economic issue—it’s about two-way trade.”
Moore said close to 6 million jobs in the United States are tied to all forms of trade with Mexico—from wholesalers and retailers to carriers and inspectors across the country. Locally, in Nogales, produce and manufacturing account for more than 4,000 jobs and $2 million in wages. The value of two-way U.S.-Mexico trade just for Nogales alone is more than $3 billion for produce and $20 billion for all products. The total U.S. economic value for all two-way trade is a whopping $536 billion.
“We’re keeping the pressure on,” Moore continues, “talking to Congress, talking to the press, talking to the Authorizing Committee for the U.S. Department of Homeland Security—trying to help people understand why customs and economic security are as important as border patrol.”
Eight Lanes, But What About Inspections?
Following foodborne illnesses over the past years, including the 2012 recall of a million potentially salmonella-tainted mangos from Mexico and demands from major chains for traceability, food safety has become a critical issue in the crossborder produce industry. Part of the new port of entry rebuild includes an effort to expedite inspections, a process that has rarely gone quickly or smoothly.
“The fact that the port will be able to handle more business in the upcoming season is very positive for us,” said Chris Ciruli, chief operating officer of Ciruli Brothers, LLC. “We’re not worried about delays due to border infrastructure, but we’ve certainly had issues and some spoilage due to testing and FDA (U.S. Food and Drug Administration) lab delays, especially during a long weekend or a government holiday.”
Alberto Maldonado, general manager at Apache Produce Imports, LLC had this to say: “If something goes wrong at a checkpoint, it can delay everything. Right now, it takes at least 24 hours to get a truck through from Sinaloa, when it used to take 16 to 18 hours.” But, he says, “we can’t judge efficiency until the port is completely finished.”
“The big thing we’re doing is working with the FDA on the new Food Safety Modernization Act,” says the FPAA’s Moore. “At the port, that means trying to be as efficient as possible. To be efficient with 1,500 trucks a day, we want to help the FDA identify and isolate risk better, and also see which companies are taking the right steps and perhaps don’t need as much scrutiny. When there is an incident, we want to work with the FDA to localize it quickly—identify the cause, commodity, grower, and region—so it doesn’t necessarily have to impact the whole industry.”
To get trucks through the inspections process more quickly, there are options—such as trying to make inspections go faster, or using expedited clearance or passes for prescreened companies—both continue to be discussed. The latter has been tested in California, but there are no definitive plans for a full rollout.
“There are a lot of possibilities,” says Emmerman. As for the California preclearance pilot program, she says, “if it works well, we could look into it as a way to facilitate the flow of traffic in a safe and secure manner.”
Moore added: “The FDA is working on a rule right now that would accredit third-party auditors to look at companies’ Primus and other ratings and grant them different certifications, which could help with inspection times.”
Regulatory Impact on Transporting and Freight
The good news for truckers in the Nogales region is that more trucks will get across the border quicker. The more challenging news is that once repacked and stored at Nogales distributors, changes in regulations stateside threaten to slow delivery times of Nogales-distributed produce to U.S. locations.
California’s tighter emissions and more stringent hours of service rules from the Federal Motor Carrier Safety Administration continue to make transporting perishables from Nogales to anywhere in the United States and beyond a much more complicated logistical puzzle.
“In California you have to have new equipment,” said Anthony Garcia, president at Border Transport, Inc. “Not only do the trailers need to be modified, but there’s a new emissions filter needed, too. It can cost $10,000 to update a unit, and a lot of smaller truckers don’t have the money to take care of those updates.”
Further, Garcia pointed out that in addition to equipment requirements, hours of service electronic log restrictions now make a trip from Nogales to California a two-day excursion instead of an overnighter.
“Once you turn on the truck, the e-log starts tracking your time,” Garcia explains. “You’ve got ten hours in the truck before you need to take a break. Well, if the truck needs to come down from Phoenix, by the time it gets here, and then takes four to five hours to load in Nogales, you’ve used up your time and can’t go anywhere until the next day.”
To deal with the time issue, drivers and suppliers coordinate as much as possible to have loads ready to go. Another option is to have two drivers in the truck, but this increases labor costs.
Adrian Gonzalez, Jr., who handles sales at Righetti Farms, LLC says all these factors lead to fewer available trucks, which raises rates. “The turnaround takes a little longer; a driver going from Nogales to Los Angeles may not be able to do that again the next day. You can do a load to Seattle from Nogales in two days if you really push the logs, but then you would have to rest before coming back.”
April Batriz, general manager at BJ Brothers Produce, LLC, says the company hires California-compliant transporters, and further explains, “Our products either go directly to clients or right to our cold storage facility in Anaheim.”
Arizona or Texas?
While Nogales to California has its timing complications, they are greatly compounded by longer distances, such as to the East Coast or Canada. Many consider Texas better suited for delivery to the East and Southeast, and some distributors are considering expanding or have already extended their operations to address this issue.
“A lot of houses in Nogales also have branches in McAllen because freight to the eastern part of the country from there is cheaper,” confirmed Frank Garcia, president of All Service Distributors, Ltd. in Nogales.
FRESH FORUM In comparing last year’s winter deal with this year’s volume—is there much change? If so, what factors most influenced this fluctuation?
Chris Ciruli, Ciruli Brothers, LLC
“We’re planting similar acreage to what we planted last year. Volumes are difficult to predict; so much has to do with weather. But our initial crop plantings are going to be about the same.”
Allison Moore, Fresh Produce Association of the Americas
“We’re expecting similar volumes to last year on all the main items. The only changes we might see would be additional greenhouse items on some commodities, such as tomatoes and cucumbers. But otherwise, it’s the normal Nogales deal.”
Robert Bennen Jr., Ta-De Distributing Company
“Up until now, from the info I receive from my growers, I haven’t heard anything about volume being much different either way. The hurricane [Manuel, which hit in September], however, will definitely have an impact. How winds affected the shade houses, and how fast growers are able to replant after the rains will play a huge part in what happens this winter out of Mexico.”
Anthony Garcia, Border Transport, Inc.
“We’re hoping for a bigger winter deal this year. Growers are saying they put more in the ground; I would say it is going to be a pretty good deal this year.”
Mickey Bachelier, Omega Produce Company, Inc.
“It depends on what the growers want to do, but we try to keep about the same volume and the same commodities—green bell peppers, hothouse reds, Persian pickles, cucumbers, Roma tomatoes, kobucha and romano beans, and in the spring, possibly honeydews and watermelons.”
Adrian Gonzalez, Jr., Righetti Farms, LLC
“We do the winter deal and redistribute here from our facility. It pretty much stays the same; sometimes factors like weather or poor markets can cause a drop in one crop and an increase in another, but for the most part, it stays the same year after year.”
April Batriz, BJ Brothers Produce, LLC
“The change we’re bringing this year is offering more variety earlier in the year. We used to start off with serranos (peppers), then bring in jalapenos, and then poblanos. This year, we will have more variety sooner, partially because we were able to plant a little earlier.”
Frank Garcia, All Service Distributors, Ltd.
“The understanding is that they’ve planted for a bigger deal than last year, but the real question is whether the weather will allow it. If you have inclement weather, the deal shrinks up. Price and supply play a role, too—if the price is not where it needs to be, they plow the stuff under because it’s not worth picking and packing. I don’t think anyone can say it’s going to be a bigger deal until all is said and done and the money is counted.”
But while Texas port of entries have better proximity to the East, they lack the concentration factor found in Nogales.
“Nogales and Texas borders are really two different animals,” commented Robert Bennen Jr., president of Ta-De Distributing Company. “It’s undeniable that Texas offers a freight advantage to customers in the Midwest and East Coast, and there is a tremendous amount of volume crossing through those ports right now. The big problem is that there are many points of crossing, with warehouses strewn about hundreds of miles apart.
“What we have in Nogales is unique: an incredible mix of products, and all the volume is warehoused within an eight- mile radius,” Bennen continued. “For customers seeking the greatest variety of fresh produce in one place, Nogales is the undisputed solution.”
Switching Tomatoes for Cukes
The recent revision of the Tomato Suspension Agreement, which prohibits the sale of Mexican-grown tomatoes below a set price (to prevent unfair competition with domestic growers, most notably Florida), has led a number of Mexican tomato growers to uproot tomatoes and plant other commodities with less restrictive pricing policies.
“A lot of growers who have traditionally planted tomatoes are cutting back and planting European cucumbers and Persian pickles instead,” said Nunez. “This shift has been encouraged by a Mexican government subsidy for shadehouses and greenhouses. These commodities are a large part of our business, and we are expecting this market to get more competitive in the coming years.”
“The past few years have seen a big increase in shadehouse production of European cucumbers and bell peppers,” confirmed Burkett. “Farming this way, they’re able to produce four to five times as much as you would have ten years ago in an open field. They are also able to start the season earlier and end later, which has made for a different game plan when it comes to sales. With more consistency and certainty of supply and quality, we can sell ahead of time a little easier.”
Canadian distributors and growers are also increasingly investing in Mexican-based shade- and greenhouse operations to meet growing demand for cucumbers and other items, as a more cost-efficient alternative to greenhouse growing during Canadian winters, Nunez explained.
With the new Mariposa port planning to open on time, and the promise of a bigger winter deal, things are looking good for Nogales this year and beyond. Distributors are finding ways to deal with the bumps in the road and the caretakers of the port are working hard to make sure the new facility is staffed and running as smoothly and safely as possible.
“The nature of this business is that everyone is looking for what’s right and cost effective, right now,” Emmerman said. “Today, the best way to handle the produce trade is the way we are doing it. Tomorrow, that may shift, but we are committed to being as competitive as we can, to meet the needs of our business people, and to have the most efficient port of entry possible.”
