Agriculture

Cotton Case Study

Challenge

Cotton is one of our nation’s founding commodities, having been grown, processed, and exported for centuries. In order to perform at the highest level, cotton shippers’ experience and expertise are steeped in knowledge and nuances. When selecting a forwarding partner, these shippers expect aligning levels of know-how, flexibility, and fortitude to provide solutions in an ever-changing environment.

Recently, the migration of the biggest harvest volumes from Texas to the MidSouth and Southeast regions has created a significant challenge, which consequently has required new infrastructure and operational strategies. This arrived at a time when the cotton industry was already dealing with the transition of warehouses to EWR (electronic warehouse receipts), challenging vessel and port schedules, partial shipments, lack of equipment and chassis, insufficient SSL shipping contracts, non-USDA-compliant warehouses, etc. As a result, the risk of increased demurrage and detention costs has become paramount.

Solutions

Considering Dunavant’s history as the world’s largest cotton merchant, this seasoned, niche industry is in our DNA. As a result, we must lean into our founding and convert our legacy to think like a shipper. At Dunavant, no matter the industry or obstacle, we take it as our personal challenge to overcome any hindrance to successfully execute a customer shipment. 

In the cotton world specifically, to combat recent shipping shortfalls, we have implemented approaches to:

• Create routes of dray and multimodal shipments from the Mid South and Southeast

• Maintain databases and open communication with warehouses to obtain timely phyto inspections

• Institute a process to keep up with the constant changes and updates from the SSLs to ensure our customers and dray carriers receive the latest information timely to adjust as needed

• Maintain fluid communication with SSLs that allow us to request alternative depots and chassis locations whenever possible

• Provide service contract alternatives (as an NVOCC carrier) for locations or routes that may not be included in the shippers’ own contracts with the SSLs

• Obtain tailgate inspections for cargo shipping out of non-compliant warehouses

• Implement reliable contingency processes

Results

Through transparency, trust, detailed documentation, and thorough communication, we have successfully delivered for our customers and developed cost-saving and reliable processes. As a result of Dunavant’s logistics solutions for our cotton customers, we have shipped an average of 750,000 bales per season over the past five years for multiple shippers.

Agriculture Case Study

Challenge

Due to Arkansas road weight restrictions, shippers may not exceed 44,000 lbs. (20 metric tons) of product when source loading containers to rice mills. Ten of our customers are exporting milled rice from Arkansas to export markets in Taiwan, Africa, Central and South America, and Europe, where it is then repackaged in sellable-sized bags and used for public consumption.

Because we are shipping food-grade rice, each container must be inspected by the USDA at either the rice mill or at the transload facility in Memphis. These inspections, making sure the product is clear of odors, stains, holes or other defects, take approximately 15 minutes per container. Depending on the level of pre-inspection performed by the drayage company truckers beforehand, we experience a 10-20 percent rejection rate. If a container is rejected, the driver must return to the Memphis container depot to pick up a different box, costing additional time and resources.

Solution

To alleviate time lost by rejection, we pre-pull containers to our yard for USDA inspection. If the container is not approved, the dry run of returning and then picking up a new container is a few miles versus the 100-200 mile dry run from the mills in Arkansas.

The road weight restriction is circumvented by transporting rice out of Arkansas before being transloaded into containers. The four rice mills we work with broker and coordinate hopper trucks, which they fill with rice and direct to the Memphis facility. One 40-foot container has the capacity of approximately one and a half hopper trucks.

In Tennessee, containers booked either off the east coast or on dock service via the west coast have higher weight restrictions than Arkansas. The rice is transloaded in bulk into containers and drayed to a Memphis rail location, allowing us to load 55,000 lbs. (25 metric tons) per 40-foot container, reducing costs at origin and destination shipping by using fewer containers with more tonnage.

1000 metric tons of rice

Shipped from AR: 50 containers at 20mts

Shipped from TN: 40 containers at 25mts

Result

Clients prefer this transloading process since it cuts down on dry runs, allows for more weight per container to decrease the number of containers that need to ship, and reduces their freight/shipping costs.

Dunavant is dedicated to helping USA farmers, merchants, and mills do business in the export market. Using a containerized method to move the product versus moving in break bulk vessels also cuts down on the number of times the product is touched, vastly decreasing the chance for contamination and keeping close tabs on quality control.