The Loss of Tote Services' "El Faro"
and the Impact on
Puerto Rico and Logistics Services
Quite a bit of attention has been focused on the loss of the container ship, El Faro. There is speculation about whether the age of the ship (40 years) had any part in its loss; whether the roll on, roll off design was to blame, or if improper maintenance was to blame for the loss of the engines in the face of the fury of Joaquin. What is certain is that 33 people perished, the entire cargo of the ship was lost, families and loved ones are suffering, and Puerto Rico has had to find ways to deal with the shortages created by the loss of the ship.
Even before El Faro went down Puerto Rico had problems with goods shipping out of the states. The country has a high dependence on imported food since it has an inadequate supply of locally grown food to respond to emergency situations. Roughly 85% of all food products are imported from the U.S., Canada and Mexico. To make matters worse, only three shipping lines currently provide service to Puerto Rico, and with the loss of El Faro, sources in the Puerto Rican government say that this leaves only eight vessels operating on this lane. This ship was carrying 700 containers of critical cargo which included 27 containers of fruits and vegetables, 29 containers of chicken, two containers of cheese, and nine containers of beverages and other perishable goods. Merchants who already operate on thin margins will now have empty shelves. Because of the dire need for rapid replenishment, freight is being trucked to Miami International Airport and flown to Puerto Rico. This will help replenish shelf stock, but will also raise prices. Government officials in Puerto Rico have started discussions about the importance of more home grown products, investigations into food inventories, and other matters involving maritime transport. This will undoubtedly fuel the debate over the Jones Act shipping laws and Puerto Rico will not be alone in their discussion. Hawaii, Guam, and Alaska are impacted by these same laws and regulations. In the U.S., discussions have already begun about the age of vessels operating on these routes and whether age and outdated designs are contributing to tragedies like this. The average age of U.S. registered vessels on these lanes is 31 years, while the average age of container vessels registered in all other countries is 11 years. The Bahamas may have experienced far more storm damage, but Puerto Rico may suffer as much, or more, economically. The loss of El Faro will continue to impact both ocean freight and logistics services in the Southeast, but the longest lasting impact may be in the political arena in both Puerto Rico and the United States.
Transportation Broker, Orlando
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Steve Kendall began his career with the Allen Lund Company Orlando office in February of 2014. He graduated from Olivet Nazarene University with a BA in English with minors in Education and Psychology. Kendall also completed Post Baccalaureate work in Journalism at University of South Florida, and University of Florida.
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| About Allen Lund Company: Specializing as a national third-party transportation broker with nationwide offices and 400 employees, the Allen Lund Company works with shippers and carriers across the nation to transport dry, refrigerated (specializing in produce), and flatbed freight; additionally, the Allen Lund Company has an international division, which is licensed by the FMC as an OTI-NVOCC #019872NF, and a logistics and software division, ALC Logistics.
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