Global Distribution Network for Avocado Growers

Co-operative
Physical Characteristics and Network Design 1
Rotterdam,
Netherlands
Avocados are perishable and have a limited shelf life by being Hong Kong,
2
temperature and pressure sensitive. Thus, a distribution network that Asia
reduces transit time and delivers avocados in the best condition is
needed. The network would include:

● Warehouses located in the main valleys in which avocado is produced in Mexico (for example: Michoacán), and only for initial aggregation
and pre-processing, Strategas has its location there (Serrano and Brooks, 2019).
● Regional Distribution Centers (RDCs): These are in important global markets including the US, Europe (Rotterdam, Netherlands, for
logistical hub capabilities), and Asia (Hong Kong for efficient port and access to Asian markets). The RDCs should have
temperature-controlled facilities to preserve avocado quality (Hübner et al., 2019).
● Terminals: At the major ports and transport junctions, near the RDCs for multimodal transport and ease of handling (Sindhwani et al.,,
2022).
Global Distribution Operation
Modes of Transport
Given avocados' perishability, the choice of From the cooperative in Mexico to global retailers, avocados would move
transport mode is critical. The options include: through a multimodal network: From Farm to
● Air Freight: This is the fastest mode for Warehouse
Transportation in refrigerated
markets far away but quite an expensive In this respect, trucks; from the farms, the
consignment is delivered in time

way. For example, it is suited to Premium INCOTERMS applied to the local warehouses for
picking and packing.

Grade Avocados or to those markets which would be FOB (Free On

are ready to pay a premium due to its Board) for shipments from
freshness (Rolfe et al., 2023). Mexico and DDP
● Reefer containers for ocean freight: it is (Delivered Duty Paid) for
RDC to Retailer Warehouse to Port
Final delivery through
refrigerated trucks Via refrigerated trucks or
ensuring freshness upon rail to the nearest port for

cost-effective for bulk shipments with deliveries made to the most arrival. international shipping.

temperature-regulated settings to retain ultimate destination.

avocado quality. Ideal for most of the Important documentation
Warehouse to Port
distribution, especially for the distant will include phytosanitary
Using reefer containers on

markets of Europe and Asia (Ding et al., certificates, export licenses, ocean vessels, then
transferred to rail or road as

2023). and bills of lading (Groom, per regional requirements.

● Road and Rail: They may distribute inland 2022).

from ports to RDCs or directly to North
American markets. Rail wins due to its low
environmental effect and affordability,
while road transport benefits from last-mile
delivery (Notteboom, 2018).
Avocado transportation must balance cost,
speed, and quality. Reefer containers via ocean
freight are an inexpensive kind of bulk
transportation with quality assurance. Although
expensive, airfreight is the quickest way to get
avocados to high-end markets where freshness
and speed are crucial.
Inventory Tools and Network
Geographical Location Evaluation
Locations for warehouses, RDCs, and terminals are chosen based on:
● Labor: Availability of skilled workforce for handling and processing avocados.
● Transport: Proximity to major ports and transport hubs to minimize transit times.
● Logistics Services: Regions with established cold-chain logistics and warehousing
solutions.
● Terminal Assets: Access to temperature-controlled facilities and multimodal transport
options.
This ensures the network is both efficient and capable of maintaining avocado quality.
The Network design concepts
Design Concepts include (Sopha et al., 2020)

● Hub-and-Spoke: Centralizing distribution in

ABC Analysis: Prior inventory management
strategic hubs (RDCs) to optimize transport
efforts have been focused on types that have
efficiency and reduce costs.
the highest turnover rate of the sale to ensure
● Direct Shipping: Out of peak periods in
freshness and reduce waste.
year-round categories, for premium markets,
bypassing RDCs to fast track fresh delivery
Just-in-Time (JIT): This strategy advocates
straight from Mexico to the retailer.
for inventory levels at each node to be
reduced to the barest minimum, hence
These tools and concepts guide the strategic
minimizing not only the warehousing costs
positioning of inventory avocados in the global
but also eliminating spoilage costs, relying
network to balance cost, efficiency, and product
fully on accurate demand forecasting and
quality.
replenishment (Thiantravan, 2021).
 References

● Ding, J.-F., Weng, J.-H. and Chou, C.-C. (2023). Assessment of key risk factors in the cold chain
logistics operations of container carriers using best worst method. International Journal of
Refrigeration-revue Internationale Du Froid. doi:https://doi.org/10.1016/j.ijrefrig.2023.06.013.
● Groom, R.L. (2022). An evaluation of the packaging logistics of an avocado supply chain : a global
case study. [online] scholar.sun.ac.za. Available at: https://scholar.sun.ac.za/handle/10019.1/124957
[Accessed 2 Apr. 2024].
● Hübner, A., Holzapfel, A., Kuhn, H. and Obermair, E. (2019). Distribution in Omnichannel Grocery
Retailing: An Analysis of Concepts Realized. Springer Series in Supply Chain Management, [online]
pp.283–310. doi:https://doi.org/10.1007/978-3-030-20119-7_12.
● Notteboom, T. (2018). Trade and transport modes: the search for global connectivity through transport
networks. [online] www.elgaronline.com. Available at:
https://www.elgaronline.com/abstract/edcoll/9781785366147/9781785366147.00029.xml [Accessed 2
Apr. 2024].
● Rolfe, J., De Valck, J., Rajapaksa, D., Flint, N., Star, M. and Akbar, D. (2023). Willingness to pay for
higher environmental standards for avocado production in Great Barrier Reef catchments. Food Quality
and Preference, [online] 110, p.104940. doi:https://doi.org/10.1016/j.foodqual.2023.104940.
● Serrano, A. and Brooks, A. (2019). Who is left behind in global food systems? Local farmers failed by
Colombia’s avocado boom. Environment and Planning E: Nature and Space, 2(2), pp.348–367.
doi:https://doi.org/10.1177/2514848619838195.
● Sindhwani, R., Jayaram, J. and Saddikuti, V. (2022). Ripple effect mitigation capabilities of a hub and
spoke distribution network: an empirical analysis of pharmaceutical supply chains in India.
International Journal of Production Research, pp.1–33.
doi:https://doi.org/10.1080/00207543.2022.2098073.
● Sopha, B.M., Sakti, S., Prasetia, A.C.G., Dwiansarinopa, M.W. and Cullinane, K. (2020). Simulating
long-term performance of regional distribution centers in archipelagic logistics systems. Maritime
Economics & Logistics. doi:https://doi.org/10.1057/s41278-020-00166-3.
● Thiantravan, C. (2021). Analysis of inventory in a food repackaging company. Chulalongkorn
University Theses and Dissertations (Chula ETD). [online]
doi:https://doi.org/10.58837/CHULA.THE.2021.198.