Transportation - distribution of wine products - includes related article on the transit of imported bulk wine

Let's say your company just scored 500,000 gallons of Languedoc red and you need to get it to the West Coast for bottling and distribution. How many people do you need to call to get the job done?

Only one, if it's the right call.

"One of the things people are looking for is they want to call one company and do everything - paperwork, shipping, the whole package," says Fred Hosking, director of transportation for Hoyt Shepston, Inc., which has been in the brokerage and customhouse business for 150 years. The company, based in South San Francisco, is the third oldest company in the United States performing freight forwarding and brokerage services, according to Hosking, and has been in the wine business from the beginning. Hoyt Shepston belongs to the World Net Association, an international group of custom house brokers, which means the company has representatives throughout the world through the Association.

Just what is involved in bringing in bulk wine for bottling in California? Wines & Vines asked Hosking to take us step-by-step through a hypothetical case:

Winery XYZ has just arranged to purchase 100,000 liters of Merlot from a producer in Mendoza, Argentina, about five tanks of wine. XYZ wants the wine to be delivered to its bottling plant in Lodi in time for a bottling run scheduled for July 1.

Step One: Filling the tanks. This will depend to some degree on the producer and what equipment is available in the way of hoses, pumps, etc. But allow one day per tank. Five days.

Step Two: Mendoza is on a very high mountain range (The Andes). Shipping will be from the Chilean port of Valparaiso, the most direct departure point to Oakland, where the wine will be received and clear customs. Take another day for that.

Step Three: The wine will be on the water between Valparaiso and Oakland for 21 to 22 days. At this point, we are at 27 to 28 days and counting.

Step Four: Clearing customs. Hard to calculate an exact timetable. The wine could be precleared by customs, but you won't know in advance. It could be two or three days. There also is the possibility of a customs examination. (Ouch!) That would entail customs taking samples of the cargo and could cost several hundred dollars. Of course there are import duties, federal taxes, customs merchandising fees, bonds and other paperwork to clear.

Once all this happens, there are several ways to get the wine from Oakland to Lodi. For a July 1 bottling date, the producer needs to start filling those tanks absolutely no later than June 1, and that would appear to be cutting it fine.

From all of the above, it's clear to see why many wineries are looking for one-call service.

Does Hoyt Shepston have a container of choice? Again, it varies with the situation. "We have no preferred method of shipment, just whatever will work in a particular case," he said.

Despite the increase in imported wines, Hosking said there was no shortage of shipping and everything was moving smoothly.

"The key, really, is to tailor everything to the customer, to the particular shipment, whether it's a case of wine or a huge bulk shipment, Hosking said. For that reason, Hosking was hesitant about quoting prices because the cost changes with the size of the shipment and with the type of shipment.

One shipper, who preferred to remain anonymous, said the cost of international shipments could be very puzzling. "The pricing often doesn't make any sense. You have to be very careful because the transportation costs can be more than the product itself. However, Jo Garces of J.F. Hillebrand, a European-based company that has been in international shipping for 150 years, said much of the confusion over cost is simply that it is unfamiliar territory for Californians. She said the rates overall were at about the same level they were a decade ago.

Bob Daly, vice president/operations for Seacrest Services in New York, said his company was experiencing a major increase in bulk wine shipments. "Last year we shipped approximately 250 24,000-liter stainless steel tanks out of France. This year we expect to hit 600 tanks," he said.

France is only part of the picture. Seacrest has had an office in Santiago, Chile for two years and in Mendoza, Argentina since last September. (Seacrest also maintains offices in the United Kingdom and has an agent in France.) "We believe Argentina is going to be very important in the next few years," he said.

One reason for growing interest in Argentina has been a recent price increase in Chile, making Argentine wines more attractive.

The president of Seacrest is Ernest Petrocelli and the ceo, who is based in the U.K., is Lothar Kammerer. Seacrest also can handle shipments of bottled wine and can arrange air shipments.

Seacrest uses stainless steel tanks but there are alternatives. Trans Ocean Distribution, based in New Jersey with offices opening next year in California, ships in rubber flexitanks. Gem Arthur, West Coast account manager of the company, said it is a less expensive way to move wine and the quality is high because the wine has no contact with air.

Arthur said they have one-trip tanks and long-life tanks, depending on the customer's needs, and will work directly with brokers or suppliers to handle the entire transaction.

Trans Ocean has been in the shipping business for 13 years and in wine shipping for about that long, according to Arthur.

"The wine industry is on a steep learning curve these days and our business has been growing like crazy," Arthur said, indicating that as the industry becomes more familiar with the flexitanks, they are more inclined to use them.

Another alternative to stainless steel is the Flexi Pack, made by Natural Flexi Pack, Inc., based in Houston.

Interest in European bulk imports is not lagging. The Bureau of Alcohol, Tobacco and Firearms scheduled four seminars in February and early March on subjects related to bulk imports. Every seminar was sold out and a fifth seminar had to be added.

According to information from Gomberg, Fredrikson & Associates of San Francisco, some 7.5 million gallons of bulk wine were imported in 1996, making up about 9% of all table wine imports. Of the bulk, about 90% came from Chile and France, with 80% of that received by California wine companies, 11% by Washington wine companies, 5% by Texas wineries and 4% to all other states.

By comparison, bottled imports were up 16%, an additional 5.7 million cases, with Chile growing an astonishing 117% for calendar year 1996. Argentina, on a much smaller base, grew 179%. (Look for complete figures on U.S. wine exports and imports in the May issue of Wines & Vines.)

There has been some criticism within the trade of California wineries importing South American or European bulk wine, bottling it in the state and selling it under a "California" label. The Monterey Vineyards was especially hard-hit by critics, perhaps because of the presence of a California geographical area in the name of the winery. Critics said that a new label should have been created for the wine.

One industry observer said such criticism was short-sighted. "What Monterey Vineyards did was create a 'soft landing' for the California industry. If Monterey Vineyards had gone out and spent a few million dollars creating a new brand, you can bet they wouldn't have dropped that brand when California grape prices and supply returned to a normal level. By bottling the French bulk wine under the Monterey Vineyards label, they've made it easy to return to the California grape and bulk market when the supply is there."

Resources:

AVS, 420 Talbert Street, Daly City, Calif. 94014; tel: (415) 467-1616; fax: (415) 468-4786.

Bay Area Piggyback, 560 Lennon Lane, Walnut Creek, Calif. 94598; tel: (510) 932-1313.

Butch Cameron Trucking, 3200 River Road, Windsor, Calif. 95492; tel: (707)-546-1046.

Cherokee Trucking, 5463 Cherokee Road, Stockton, Calif. 95215; tel: (800) 662-3430.

Joseph W. Ciatti Co., Inc., 42 Miller Avenue, Mill Valley, Calif. 94941; tel: (415) 388-8301; fax: (415) 388-0528.

C-Line Express, 525 Silverado Trail, Napa, Calif. 94558; tel:(707) 252-5540; fax: (707) 252-5545.

C.O.M. Transportation, P.O. Box 5524, Santa Rosa, Calif. 95402; tel: (707) 838-9865; fax: (707) 546-2247.

C&W Leasing, 72700 Bel Air Road, Palm Desert, Calif. 92260; tel: (619) 568-3667.

Collier Wine Logistics, 22645 Grand Street, Hayward, Calif. 94541; tel: (510) 538-4272; fax: (510) 886-6710.

Groskopf Warehouse, Inc., 20580 Eight Street East, Sonoma, Calif. 95476; tel: (800) 237-1715; fax: (707) 935-2177.

J.E. Hillebrand, 621 West Spain Street, Sonoma, Calif. 95476; tel: (707) 996-5686.

Hoyt Shepston, 700A Dubuque Avenue, South San Francisco, Calif. 94080; tel: (415) 952-6930; fax: (415) 952-5691

Innovative Energy, 3339 Fitzgerald Road, Suite 3, Rancho Cordova, Calif. 95742; tel: (800) 442-FOIL; fax: (916) 631-9379.

JIB International, P.O. Box 5551, Stockton, Calif. 95205; tel: (209) 948-1598; fax: (209) 948-0958.

C.E. John International, 1701 S.E. Columbia River Drive, Vancouver, Wash. 98661; tel: (360) 696-0837; fax: (360) 737-7987.

J&R Distribution Services, 31281 Wiegman Road, Hayward, Calif. 94540; tel: (510) 489-3230

Metcalfe Brokerages, 1804 Hawkeye, Turlock, Calif. 95380; tel: (209) 667-1476; fax: (209) 667-6942.

Natural Flexi Pack, Inc., P.O. Box 92022, Houston, Texas 77206; tel: (713) 862-2232.

Northwest Distribution & Storage, Inc., 1885 Anunsen Street NE, Salem, Ore. 97303; tel: (503) 362-2212; fax: (503) 362-5365.

Quilt Protection, Inc., P.O. Box 1802, Lafayette, Calif. 94549; tel: (800) 295-2001.

Seacrest Associates, 5550 Merrick Rd., Suites 300-304, Harbor Building, Massapequa, N.Y. 11758; tel: (800) 677-5082.

Transamerica Leasing, 1225 North Loop West, Suite 800, Houston, Texas 77008; tel: (713) 869-9988.

Trans Ocean Distribution, 2 Lincoln Highway Suite 500, Madison, N.J. 08820; tel: 1-888-TOD-EAST or 1-888-TOD-WEST.

Yandell Truckaway, Inc., P.O. Box 818, Oakland, Calif. 94604; tel: (510) 5362100; fax: (510) 635-6193.

RELATED ARTICLE: KEEP ON TRUCKIN'

While transit of imported bulk wine is getting a lot of attention now, over-the-road truckers transport much of the basic goods that keep production rolling, such as bottles, corks and other equipment.

Yandell Truckaway, Inc. in Oakland has been in business for 52-years, according to John W. Yandell, Jr. Yandell said that about 50% of the firm's business is in the wine industry. Major customers include Korbel Champagne Cellars, Wente Winery, Sterling Vineyard, Kendall-Jackson, Louis M. Martini and S. Martinelli.

Yandell operates 70 units and 200 trailers, primarily between Fresno and Redding. There are terminals in Oakland, Benicia, Antioch and Tracy with warehouse facilities in Benicia and Oakland.

The warehouse distribution and repack operation is especially oriented to empty containers and full products for consolidation and distribution, according to Yandell. There is a fully-automated mobile unit in operation for specific job site transfers.

Bill Harper of Groskopf Warehouse, Inc. in Sonoma, said that company has had an excellent year by concentrating on the internal market. "It's what we know best, so we've been expanding there and in the area of freight consolidation. We see interest growing all over the country in California wines."

One of the few Pacific Northwest shippers is Northwest Distribution of Salem, Ore. Gary Parker, president of the company, said the startup business (1994) was aimed at being the major link to the rest of the world for Pacific Northwest wineries.

Northwest Distribution does scheduled pickup and consolidation service for shipments to California, the Midwest and the East Coast. The company also can handle international shipments and is a one-call service, according to Parker. He said that northwest wineries can save from $3 to $6 a case by using Northwest Distribution rather than calling in a California distribution or broker operation. Storage also is available.

The company isn't new to the wine business. For years Parker Transportation operated in Healdsubrg and served wineries in Northern California. That business was sold about ten years ago.

Another fairly new face is Collier Wine Logistics, a Hayward, Calif. company that Kimberly Dixon started out of her bedroom four years ago. She's now in a 17,000-square-foot warehouse and handles shipping to all parts of the U.S. except Alaska and Hawaii. Collier trucks pick up at the winery, and consolidate and store the wine for shipment outside of California.

C.O.M. Transportation in Santa Rosa started as a local trucking firm in 1981 and now has expanded nationwide and also handles international freight forwarding, according to President Ward Chaplin. "We have a growing market in Japan and have also been very active in Europe," he said.

"We have found that customers want seamless service. We can arrange winery pickup, we can consolidate, take it to port, handle documentation, do whatever needs to be done, whether it is shipping from Napa to Los Angeles or Napa to Nagasaki. We know the customer doesn't want to make half-a-dozen phone calls. We like to tell the customer that when we start on the job, the customer owns that truck until the job is finished," Chaplin said.

For other over-the-road truckers see the article on transportation in the April, 1996 Wines & Vines and the resources box at the end of the main article.

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