Working with the produce industry over the last decade, I have come to realize the difference between a produce broker getting an order or not getting one comes down to how good a supply chain it has.

Can the broker get the two pallets of plums from Fowler, California, to an LTL truck waiting for them in San Diego, California, and then bring the order to its final destination in Jessup, Maryland? For many produce companies, large or small, the supply chain is the major bottleneck in continuing to move their business forward, closing the sale, and getting the order. Let Horizon Transportation help you get the order. Supply chain management is our business, and it’s what we do best.

Horizon has invested in its employees, training them to be more than brokers or dispatchers, but supply chain managers. Many produce companies focus on cost, cost, cost, but they don’t realize how saving a penny in one place can cost them a dollar someplace else. Whatever your needs are—from moving a couple of pallets from one coast to another or looking for a full distribution solution—let Horizon’s team of talented supply chain managers help relieve your supply chain needs.

The following is an example of how implementing a supply chain partner can help close your customer. I was at a packing facility in our local area when one of the salesmen for the facility and I started talking. He was frustrated because he had been quoting a customer from Puerto Rico on

tree fruit and could not get to the right price. He knew he had a great value for his customer. I asked who was handling the transit from his shed to Puerto Rico, and he

informed me his customer was taking care of it. I then asked if I could help him give his customer a delivered price. He wanted to try anything to close the deal, so he agreed. After doing some background investigation, I discovered his customer was bringing the produce into a port which cost an additional $3,000 for over-the-road transit.

With this discovery, I began to put our supply chain management plan into action. I would order a pickup in Exeter, California, to retrieve the produce, and it would travel three days on a truck to a supply chain partner in Houston, Texas. It would sit in cold storage for six hours, then be taken to the Port of Texas and put into a refrigerated container. By the fourth day it would be on its way via ship to Puerto Rico. Implementing this supply chain program cost $500 more in ocean freight, but saved 30 percent from the expense of over–the-road travel. Altogether the salesman was able to make the sale, saving his customer 20 percent over their usual cost.

Let Horizon Transportation be your partner in profitability!

Josh MillerVice President of Sales/OperationsEmail: josh@ horizonproduce.com

HorizonNEWSwww.horizontransportation.co

Moving in the Right DirectionTransportation

This Newsletter is Published by Horizon Transportation Services, Inc Sept of 2011 #3

The Power of Supply Chain Management

Many produce companies focus

on cost, cost, cost, but they

don’t realize how saving a penny

in one place can cost them a dollar

someplace else

V.I.P.Trade Dispute Between Mexico and the U.S. Resolved

California’s fresh grape farmers welcomed the news that the two-year trade dispute between the United States and the Mexican government has been .........pg 4

Moving in the Right Direction HorizonNEWS

2

Source: Dave Babcock

Why is Traceability a Good Thing?Improving product traceability is an aspect of food safety reform that should

receive near-unanimous support as it will result

in improved outcomes for both consumers and the food service industry. For consumers, better traceability can mean the following:

1. Fewer outbreaks: The ability to identify where food has gone downstream from a supplier can better allow a recall or removal from the marketplace before illnesses occur. If testing or inspection uncover a problem with a product, a corporation that knows exactly where its products have gone may be able to prevent them from even reaching consumers.

2. Protecting a company in a legal setting: It’s never good news if your company is implicated as a member of the chain of distribution of a contaminated product in an outbreak. The legal battle that may ensue, however, can be much less threatening where the true “at fault” party can be determined. Product liability laws vary from state to state. Still, in many states, the current law offers full or partial protection for entities in the chain of distribution that are no more than “pass-throughs.”

3- Protecting the image of an entire product line. In 2008 an outbreak of Salmonella Saintpaul sickened more than 1,200 people. For weeks, public health officials struggled to identify the source. Possibilities vacillated between different types of tomatoes, peppers, and other agricultural products. Some of the problem in identifying the proper product was epidemiological--many sick people had

eaten these products in tandem on more than once occasion. But part of the problem is that produce distributors could not fully identify the entities upstream that had sold them suspect products. Ultimately, different tomato products were pulled from the shelves, apparently in error. This not only damaged sales in the short term, but it also could have damaged the long-term reputation of the product.

What are the current Regulations? Current regulations are applicable to traceability in the food industry. Federal regulations stemming from the Public Health Security and Bioterrorism Preparedness Response Act of 2002 place certain obligations on those who “manufacture, process, pack, transport, distribute, receive, hold, or import

food” (see 21 CFR 1.326 et. seq.). As you can see from the list, the regulations are intended to apply very broadly to those throughout the chain of distribution. Information that must be tracked includes dates of production, description of the food, quantity, manner of packaging, and lot numbers. In addition, those shipping must have the contact information of the entity receiving the food. Those downstream must have that same

information for all food items received.

It is not clear, unfortunately, that these potentially helpful regulations have been adhered to. In March of 2010, the Wall Street Journal (WSJ) reported that a survey of facilities covered by the regulations indicated that 60 percent were not keeping the records. WSJ reported that a “watchdog agency also tried to trace 40 items such as fresh tomatoes, whole milk, oatmeal, and yogurt from retail stores to the farm where they were grown, but could do so for only five items.”

The ability to identify where food has gone downstream

from a supplier can better allow

a recall or removal from

the marketplace before illnesses

occur

Moving in the Right Direction HorizonNEWS

HorizonNews is published by Horizon Transportation issued every quarter to improve communication in the Produce Industry. Responsible: Josh Miller Publisher: Thomas Leal Design: Business Spring Communications - www.b-spring.com, tel (559) 801 2090HorizonNEWS

3

Horizon Marketing (HM) was established in 1989 by several growers of citrus, table grapes, and stone fruit who were dedicated to providing products with the highest standards of quality. This venture into marketing their own products brought such good results that they began to reach out to other quality growers throughout the Central San Joaquin Valley to market their produce, as well. Over the past twenty years, Horizon Marketing has developed a healthy relationship with the best growers in the Valley and taken their products to most states in the US and Canada. Because of HM’s mission to meet the demands of a large customer base in the continent throughout the entire year, it became imperative for the company to also develop relationships with growers throughout Mexico, Costa Rica, and Chile.

Horizon Marketing is committed to building relationships of trust with both their growers and their clients. Their commitment to be a leader in the produce industry has created a need for making all its growers Primus or third-party certified by January 2012. This charge will bring added peace of mind regarding safety and traceability. To insure the highest quality product is sent to their retail clients, Horizon inspectors follow a process from picking, packing, and cooling, making sure that what their

customers order is what’s delivered.

Horizon’s ambition is to build relationships of trust, creating partners within the produce industry, and supplying their customers’ complete produce needs. Their dedicated team of third-party buyers work diligently to know the market and the

upcoming supply of the products they are responsible for buying.

Horizon Marketing has developed from humble

beginnings as a group of growers providing produce from within Tulare and Kern County, to supplying the Western US with produce, to a growing industry leader providing product worldwide. Whether

sending Tasmanian cherries to China, Costa Rican pineapples

to Vancouver, or California table grapes

to Salt Lake City, Horizon Marketing has the supply chain to

take their product global and your business to the next level.

In 2007, Horizon Marketing turned its supply chain management over to Horizon Transportation, Inc. According to Robert Delatorre, Produce Director of Horizon Marketing, “Adding Horizon Transportation to manage our supply chain has helped us reach customers with our product that in years past we could not.”

Horizon Marketing

is committed to building

relationships of trust with both

their growers and their clients.

Horizon Marketing: The Right Solution for Your Needs

HorizonNEWS

California

Two-year trade dispute between Mexico and the U.S. resolved

4

No MoreTariff on California Grapes

despite the challenges that farmers everywhere in the U.S. face.”California’s fresh grape season begins each year in May and runs through January. Last season, forty-five percent of the volume was

shipped between October and December. The top variety by volume was Crimson Seedless, with 19.3 million boxes, followed by Flame Seedless, Red Globe,

and Thompson Seedless. “With increased volume from new plantings, we expect that

the industry will top 100 million boxes in the near future,” said Nave. “With consumers all over the world increasingly interested in

healthy eating, grapes from California are well positioned as both a flavorful and healthy

choice.”

Export rankings (May through December 2010)

Final numbers from the 2010 season show the industry

shipped nearly 100 million

boxes of fresh grapes.

Mexico

Fresh Grape Exports Still on a High

Country 19-lb boxesCanada 11,103,062

Southeast Asia Region 6,045,361China Region 4,979,727

Mexico 3,507,635Central America Region 2,755,402

Australia 2,011,756Philippines 1,668,441

Taiwan 1,656,165UK/ Eire Region 997,756

New Zealand 717,423

Source: The California Table Grape Commission

California’s fresh grape farmers welcomed the news that the two-year trade dispute between the United States and the Mexican government has been resolved. In March of 2009, Mexico increased its tariff on table grapes from zero to 45 percent in retaliation for the U.S. government canceling a pilot program that allowed Mexican trucks to operate in the U.S. Fresh grapes were among 89 products included on Mexico’s retaliation list and received the highest tariff imposed on any product.

Mexico has long been one of the largest export markets for California’s fresh grape industry, with shipments ranking second in 2008, valued at over $61 million. The increased tariff caused exports to

drop by almost 73 percent to a value of $16 million in 2009. Volume decreased from nearly 5.8 million 19-pound boxes in 2008 to 1.7 million in 2009.

In August of 2010, Mexico reduced the tariff to 20 percent and shipments increased over those the prior year, but did not come close to totals for 2008. U.S. Transportation Secretary Ray LaHood was in Mexico City for a signing ceremony that ends the Mexico trucking dispute. The result was a dropping of the existing tariffs by 50 percent on July 8th 2011, reducing the fresh grape tariff to 10 percent. Once trucking begins, the tariff will be eliminated.

Source: The California Table Grape Commission

A total of 98.3 million boxes (97.7 million in 19-pound box equivalents) of fresh grapes from California were shipped during the 2010 season. Thirty-seven million boxes were exported to more than 62 countries around the world. The remainder were sold in the United States. California produces 99 percent of the commercial fresh grapes grown in the United States.

“For consumers in the United States, California grapes are their local grapes,” said Kathleen Nave, president of the California Table Grape Commission. “That is one of the reasons that 99 percent of the shoppers in the U.S. prefer grapes from California over those from any other source.”

The total value of the crop for the 2010 season was $1.3 billion. According to data from the United States Department of Agriculture, nearly half of that value ($618.9 million) was from exports. “Strong demand in export markets has been a key to the strength of California’s fresh grape industry,” said Nave. “Expanding markets and maintaining strong demand in the U.S. and in export markets have been vital to this industry’s ability to survive and even grow