Staying competitive in regional deliveries of Chilean fruit arriving in ports of
the Delaware River is a challenge for Krichmar Produce Co. Inc., which is
located in Vineland, NJ.
Kenny Krichmar, the company's manager, said Dec. 29 that an increase in the
cost of diesel fuel of 30 cents per gallon over the previous two weeks "will
impact full-load and LTL [less than truckload] deliveries."
Krichmar Produce owns eight trucks and works with eight owner-operators to
make LTL Chilean fruit deliveries.
“The fruit volume out of Chile is strong,” Mr. Krichmar told The Produce News.
But “it’s always tough to get the right rates with customers when there is an
increase” in fuel prices. “We’ve got to raise the rates on our customers. The
guys running the trucks want more money as well.”
Mr. Krichmar said that each dime hike in fuel cost amounts to a $10 increase
per pallet for a trucker hauling produce.
Produce buyers are already spending a lot of money to buy high-value items
like Chilean grapes and (in the summertime) clementines. After such a high
investment, it is not unusual for produce buyers to “try to skimp on
transportation,” he said.
Meanwhile, there are “fly-by-night trucks ... that for the most part are not
figuring out the technicalities” when it comes to pricing. If all truckers would
incorporate fuel, insurance and highway tolls into their pricing, “there is a
certain number you need to break even,” he said. “Smaller companies are
putting themselves out of business underselling you. We have got to stay
strong with rates.”
In the trucking business, there are “guys with three or four trucks trying to
pay the bills, but they’re not showing any profit,” he added. “They tread water
for as long as they can, and eventually dissolve.”
In the long term, “eventually, the difference we show is that we have got a
great reputation,” he said. “We don’t miss deliveries. We have all-new
equipment. We follow-up with customers. We do our rounds first thing in
[the] morning” and provide customers with “ease of mind.”
Within a price war, “customer service is the only aspect we have to stand out,”
he said. “That is what will get you the business and a decent rate. You’ve got
to bring something to the table. There are guys who think a truck is a truck.
But there are [other] guys who have got no insurance and bald tires.”
Mr. Krichmar has worked in the business for his uncle Jay Krichmar for four
years, handling produce sales (during the New Jersey deal) and truck dispatch.