LOGISTICS STRATEGY CUTS WINE IMPORT COSTS

LOGISTICS STRATEGY CUTS WINE IMPORT COSTS

International shippers and freight forwarders of fine wines and selected liqueurs are trading costly temperature-controlled containers for more cost- effective logistical procedures.

By routing imported wine and spirits to more temperate southern ports in winter and summer, rather than to more traditional northern entry ports, shippers and forwarders limit the possibility the cargo will freeze or overheat. "Nobody likes 'winesicles' or cooked wine," explained Geoffrey Giovanetti, managing director of the Wine and Spirits Shippers Association, a Reston, Va.-based wine shippers association.Many bottled beverages, including most liquors and mineral waters, can withstand the extremes of temperature in the summer and winter. Wine, beer and several creme-based liqueurs, such as Bailey's Irish Creme, must be maintained within a specific temperature range to avoid spoiling.

It costs at least $1,500 to ship wine in a refrigerated container called a "reefer." The reefers can maintain the cargo at a specific temperature for both winter and summer transport.

"If you've got a low-value product, such as mineral water, most shippers will take the risk if it heats up," Mr. Giovanetti said. "The beer people tend to be in the same category, as do shippers of low value wine. It's an economic issue."

In the case of certain red wines, the risk of spoiling can be an expensive proposition.

"If you've got a case of wine valued at $1,000, you don't want to hear the flavor is off because the shipper wanted to save a couple dollars (by not refrigerating it)," Mr. Giovanetti said.

"Our insurance underwriters get nervous if our members take risks with fine wine." The association sponsors a marine cargo insurance program on behalf of its 450 members, he noted.

The high demand and low supply of reefers, however, have driven up prices for the containers, forcing shippers to seek transportation alternatives, Mr. Giovanetti said.

"When you need them, they're hard to get," said Howard Rappin, vice president and chief financial officer of Continental Distributing Co. in Rosemont, Ill., a major wine importer. "That's everybody's biggest complaint."

Mr. Rappin also is the president of the Wine and Spirits Shippers Association.

"Necessity is the mother of invention," Mr. Rappin said. "The lack of supply created a need for improved logistical management. . . What we've come up with is a much more cost-effective alternative (to reefers)."

In the winter, most association members now import their wines and liqueurs from Europe by routing the cargo to warm-weather ports, such as Jacksonville, Fla., and New Orleans, Mr. Giovanetti noted.

Arriving in the southern ports, the cargo is transloaded into trucks and carried inland in heated containers. By avoiding more traditional entry ports like New York or Boston, for example, the cargo can be transported across the Atlantic in regular dry containers and not the more expensive reefers.