Fewer ports and streamlining its supply chain
Chiquita International and Irish banana seller Fyffes are busy wooing shareholders, saying the synergies of a combined company would result in $60 million in annual savings, much of it from lower transportation and fuel bills. Shareholders won’t vote on the merger (or address a competing bid for Chiquita) until the end of this month, but the Charlotte, North Carolina-based banana seller already is going ahead with changes to its logistics system.
In general, Chiquita is directly operating fewer vessels, calling on fewer ports and streamlining its supply chain — without slowing the delivery of its perishable products. If the merger goes through, the two companies can consolidate transportation even more efficiently, they say. In addition, a combined Chiquita-Fyffes company would attempt to sell more imported melons and other tropical fruit to U.S. consumers. Fyffes now sells melons in the U.S., but in a limited geographical location around the Gulf.
Chiquita did not respond to information requests for this article, but annual reports, letters to stockholders, sailing schedules and vessel-sharing agreements paint a picture of changes the banana giant is making to its supply chain.
In late September, Chiquita’s Great White Fleet announced a new vessel-sharing agreement with Mediterranean Shipping Co. that is far more involved than a standard cookie-cutter slot-sharing deal. The agreement, filed at the Federal Maritime Commission, outlines what could be seen as a specialized reefer service typical of a banana boat fleet — but operated by a major container line.
It’s a major step in the company’s journey to convert its carrier subsidiary from what it was in 2006, when Great White Fleet owned and operated a dozen large specialized breakbulk reefer vessels, to the role it plays today, which is more of an uber logistics manager.