With Mexican fruit and vegetable production soaring, Loop Cold Storage in McAllen, TX, is in prime position to soar right along with it.
The company recently completed yet another expansion of its cooler space — its 11th construction project since opening in 1981 — and is poised for even more growth.
Over the past decade, produce imports from Mexico have increased 83 percent, to 335,915 truckloads (40,000-pound equivalents) in 2010, up from 183,303 in 2000. Production has continued to increase in California as well (452,383 truckloads in 2010 vs. 385,003 in 2000, an 18 percent increase), but Mexico is narrowing the gap.
Some people — Loop owner John McGuire among them — believe Mexico may catch up to California by 2020.
“Based on current trends, it is possible,” Mr. McGuire said. “This is quite an exciting prospect for companies, participating in this market.”
Loop is prepared for that coming growth. The recent expansion, completed in October, added 50,000 square feet of cooler space and 13 dock doors. It was Loop’s third cooler expansion project since 2007. The company now has 150,000 square feet of cooler space with 46 dock doors and 7,000 pallet positions, along with 300,000 square feet of freezer space with 44 dock doors and 30,000 pallet positions.
The project also includes additional office space available for customers with operations at Loop. Mr. McGuire believes that extra space will come in handy as growers from West Mexico begin to see the benefit of shipping through McAllen.
“Shippers from West Mexico should benefit from third-party logistics services on offer in the Rio Grande Valley,” he said. “Cold-storage facilities have a high fixed cost to maintain and operate. When shippers contract with a cold storage services provider such as Loop, they gain some flexibility by turning their distribution expenses into a variable cost. This is important in the agriculture sector due to the unpredictable nature of weather and markets. We handle products from different regions of Mexico, allowing us to somewhat diversify this risk.”
As for recent expansion, “We got it done without too many challenges,” Mr. McGuire said. “The easiest part about our business is the construction of a building — the most challenging aspect is building a team and developing the skills of our team. At the end of the day, it’s the team that makes it happen. We have many dedicated team members that make it happen every day. We work hard to measure our performance on each transaction and to make continuous improvements. The most challenging period of the year is always the start-up of the winter season. We’ve been all hands on deck because we’ve been readying for our season; we get a lot busier in the month of November because the crossings increase at Pharr [TX] during the winter when California production ramps down.”
Mr. McGuire said that Loop’s continued growth and success is attributable to an “appetite for continuing to learn from and listen to our current customers, and a team that’s engaged in continuous improvement. We are pleased to be part of a vibrant produce industry in south Texas. There are many outstanding cooler operations in the region and we aspire to be considered one of them.”
This will not be the last expansion for Loop, which already is increasing its level and realm of service.
“We are currently building other service capabilities around quality inspections and custom packaging,” Mr. McGuire said. “Embassy Packing Inc., Loop’s onsite repack operation, performs intensive inspections and custom packaging services, such as flow-wrapping rainbow packs of Bell peppers, lime bagging and packaging broccoli onto consumer trays with over-wrap style packaging. We are excited about our expansion. The logistics at the border are complicated by large volumes of fresh produce from Mexico entering the United States through only a handful of key ports. With the new layout, once we get settled in, it affords us the ability to improve our level of service for truck turn times.”