A critical fundamental in trade is infrastructure to support trade. No one can beat the infrastructure we enjoy in USA. But we can do more and thus expand trade. The opportunity is the growing demand for fresh agriculture in Asian markets. The potential is within the new and better high quality specialty crops being produced in USA. The common tactic is to “search and learn” markets by offering LCL export quotes. The problem is a lack of coordination of present resources to support this market. The solution is a LCL Chill Seasonal Weekly Sailing from a West Coast USA port. The “seasonal” stipulation reflects the fact that for probably 3 months a year, there is neither enough supply nor demand to warrant the service, at least initially.
OOCL currently offers such a service on their webpage, but sadly informs us a lack of equipment stymies their effort. I suspect it is a lack of sales that is the real problem. Nonetheless, OOCL does have a chill consolidator under contract in Seattle, ready to perform.
While the tactic of MOQ FOB is well-received in processed ag exports, in fresh produce it is a non-starter for lack of reliable LCL chill service. Lack of demand inhibits service. So who moves first?
For my part, I am acquainting specialty fresh growers with the MOQ FOB sales tactic, with a view to inviting demand when logistics warrant. Specifically, I am asking them to reply to the unsolicited export requests they are recieving, and spelling out the plans for LCL chill that are afoot.
My ambition is to gather a critical mass of marketers that warrants OOCL to make regular the LCL Chill shipment. If I diagram the goal, then the means may become clear:
The key to making this work is the Freight Forwarders (FF). If they promote the tactic to their clients the chance of a critical mass to interest OOCL is gained faster. Any Freight Forwarder that would like me to present to their clients can count on me. Just let me know.
In the last year I have talked over the problems with growers in various states. Growers in Wyoming worry about the costs of LCL interstate to port, to which the reply is, those costs are included in the quote, and if you get a prepaid order, the buyer obviously thinks it is worthwhile.
Freight forwarders are concerned about being worked to death with daily quotes requests, but the exporter’s MOQ FOB offer is one size fits all. One quote is made, and then whether the marketing is active or passive on the part of the exporter, a sale is the same thing in every instance. Not only is the first quote the same a year later to any and all inquiries, any sale is referenced to that FF to book and earn.
FF are also worried about incoterms, but to start there is only one to know, and that is FOB. And since it is FOB, the quote is evergreen, with export forwarding quoted when requested.
While LCL Dry and LCL Frozen is simple enough, LCL Chill has many complications, such as “no mixing garlic and apples.” Then there is the different temps ideal of diff products, and then proper venting of each. Given the complexity of the loading matrix, the FF’s want to be absolved of any claims at delivery.
Bankers worry about payment expertise regarding letters of credit, etc, but the MOQ FOB is strictly prepaid. TT is enough expertise.
The exporter is expert strictly in the MOQ FOB.
These and other problems can be worked out in practice. Perhaps to start the most likely mixed load candidates can be targeted, and perhaps include not necesarily chill items that can stand a chill shipment, such as (hops?).
Feel free to forward this by email to three of your friends.
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