Food & Drink International - Spring 2017 Volume 1 - 100
TraFon Group Inc.
TraFon Group looks to expand while maintaining a high-value, low-cost
structure in an ever-changing market. By Janice Hoppe-Spiers
TraFon Group Inc.
Headquarters: San Juan, Puerto Rico
Javier Pietrantoni, senior EVP: "We
provide a differentiated value proposition from a cost standpoint and are
able to share the benefit of economies
of scale with our customers."
>> TraFon Group uses a hands-free voice recognition warehouse management system to remain efficient.
uerto Rico has experienced a
dynamic demographic shift
over the past decade even
as importers and distributors
such as TraFon Group feel the pressure
to maintain competitive pricing while
the island remains in a recession. As
a result, TraFon Group has put greater emphasis on building its Caribbean
Cold Storage & Logistics business to
meet evolving market needs.
"Puerto Rico has lost 500,000
consumers over the past 10 years
and the demographics as a whole
have changed," Senior Executive
Vice President Javier Pietrantoni explains. "This change brings about a
shift in consumption patterns in the
market, both from a retail and foodservice standpoint."
Competitive pricing is key for
TraFon Group to maintain its marketshare. The company serves 38
customers in Puerto Rico through its
cold storage and logistics business,
handling more than 1,200 containers
per year. "It's become an important
business for us," Pietrantoni adds.
"By adopting a competitive strategy
centered on providing stakeholders
a unique platform to benefit from our
economies of scale, we are able to
deliver service solutions that create
value to our customers."
food & drink international * spring 2017 volume 1 * www.fooddrink-magazine.com
The Merchant Marine Act, also known
as the Jones Act, was enacted in 1920
and requires that all goods transported by water between U.S. ports
be carried on American-made ships
with an American crew. "Limiting
the competitiveness of ocean carriers
to bring cargo to Puerto Rico makes
the cost of transportation expensive,"
Pietrantoni says. "Twenty years ago
there were more than 10 ocean freight
companies. Two years ago there were
four or five and today there are three.
With only two transport reefers available, importing frozen or refrigerated
products is very pricey. It's critical to
optimize the container, so understanding the subtleties of inland and ocean
freight costs is imperative in the formula for success."
TraFon Group continuously evaluates the individual cost components
of its operational activities and compares it among all players in the market to benchmark its cost structure.
"By deconstructing our value chain,
we were able to identify opportunities
to become a more efficient operation.
In that process we are able to bridge
opportunity with viable service solu-