Innovations Move Commodities from Bags to Bulk
As a participant in many areas of the supply chain, Cargill works to ensure the path from farm to fork is safe and efficient.
January 01, 2015
When Cargill’s founder, W. W. Cargill, first set up a grain warehouse in 1865, he began a 150-year effort to reduce the cost of loading, storing, transporting and delivering grain and other commodities. Warehouses, shovels and wagons gave way to elevators, conveyors, trains and barges. The increasing demand for products over time made innovations necessary. In 1900, a large country elevator held 25,000 bushels of grain. Today, the average country elevator holds at least 150,000 bushels.
As Cargill grew globally, the company’s expertise in grain handling expanded to many new and different commodities, requiring a range of techniques. Inefficiencies were detected early on in the handling of copra, the white meat of the coconut from which coconut oil is produced. In 1947, Cargill opened an office in the Philippines to buy copra to ship to a newly purchased processing facility in San Francisco. Loading and unloading required extensive labor on both ends.
Howard Boone, head of Cargill’s San Francisco copra facility, described the early loading process: “The ship would just back into the port [with] the ramp out this side, and [workers would] carry bags of copra on their head, and drop it in the hold. They would go out the other side and [they would] get a stick or something like that. And [that is] how they got paid, piecemeal. [They would] come up on one side and cross the ship and back down the other side.”
Loading ships one bag at a time was terribly slow and inefficient, and the need to find a faster, better way to load ships quickly became apparent. Cargill’s first innovation involved using large clamshell cranes to load copra onto ships in bulk. Elevators and conveyers loaded large vessels that could efficiently deliver copra across the ocean. On the receiving side, a bulldozer was placed in the ship holds and the copra was sucked out to be processed into oil and feed.
A different approach for loading and unloading ships was used with fishmeal in Peru in the 1960s, where anchovies were processed into a lysine-rich animal feed. Again, bags were commonly used for transporting fishmeal, so Cargill set out to transform the commodity by pelletizing it. Turning the meal into pellets solved the transportation problem because now the meal could be handled in bulk. However, the oil-rich meal quickly spoiled from oxygenation. Cargill then turned to a chemical company to help solve the problem, and it found a particular antioxidant to add to the meal. By doing this, Cargill transformed the commodity, and the changes were soon adopted as an industry standard.
In the 1970s, on the other side of South America, Cargill offered a solution to Brazil’s growing orange juice industry by making rinds and pulps a valuable commodity for feed. Cargill applied the successful technological sequence from its fishmeal business: drying, pelletizing and shipping in bulk. Again, the industry noted Cargill’s improvements and rushed to adopt its techniques. Today, Cargill’s continued innovations in commodity businesses help ensure a liquid market for buyers and sellers across all industries.