Air cargo told to step up its perishables performance
14 / 03 / 2018
Air cargo must improve its performance if it wants to take advantage of the growing perishables market and avoid losing out to disruptors and other modes of transport.
At the IATA World Cargo Symposium, forwarder Adelantex business development manager perishables Frank Van Gelder outlined how consumers were changing their expectations for perishables.
People are increasingly ordering goods online, want products all-year round, want them delivered quickly and are increasingly conscious of the health benefits of various types of food and the impact their transportation has on the environment.
He also highlighted the fact that 45% of all food produced is thrown away, although transportation only contributes to part of this waste.
In order to meet consumer demands and reduce waste, food supply chains would need to improve and data would play a key role in this transition.
Van Gelder said: “We have to put all our data centrally into a cloud system, where we show availability, product data, harvest in fresh data, then share that into a platform that is then plugged into a food industry multi-data source platform.
“Seafreight is there already, road freight is going there and so airfreight needs to go there as well.”
Avianca Cargo managing director Andres Osorio added that the cost of transportation was also holding back growth.
He gave the example of a 1kg box of cherries costing as much as $30 in Singapore, compared with around $5 in Mexico, because of the logistics costs. If this cost could be reduced, it would open up a whole new market to South American cherry producers.
Costs could be reduced, he suggested, through innovation and technology, solutions and collaboration amongst supply chain partners.
Later, Schiphol Airport head of cargo Jonas van Stekelenburg and Marcel de Nooijer, executive vice president Air France KLM and managing director Martinair outlined a new data platform they had developed through the Holland Flower Alliance Data Sharing Working Group.
Shipment data (such as number of boxes, flower type and number of flowers and stems in each box) is linked to air waybill numbers and the resultant unique GLN codes give all users access to all the data in one place.
Flower shipments on pilot flights from Nairobi to the Aalsmeer flower auction in the Netherlands have proven to be traceable individually and in real time throughout their journey.
A later panel discussion looked at some of the other issues faced by the air cargo supply chain.
Cargolux head of global customer service Marc Roveri said that one of the main problems faced by the airlines when carrying perishables goods was incorrect labeling.
He said that perishables shipments often came through as general cargo and were therefore handled as such.
He would like to see the development of mandatory requirements around temperature and labeling to help Cargolux ensure that products are handled properly.
IATA has suggested it could develop a CEIV programme for perishable cargo, but it is still in the process of engaging with stakeholders on what form this should take.
Turkish Cargo vice president sales Middle East Burak Omeroglu agreed that this was an issue and that standards would help a lot.
In the meantime, he said that airlines could also engage with forwarders and shippers to encourage them to book the cargo correctly in order to help reduce waste.
One airline attendee from the audience added that the type of packaging sometimes used by the growers also created problems because it was of a low quality.
Engagement with the forwarders and growers was the solution here, panelists suggested.
Eventually, the debate turned to who would pay for the development of new data sharing platforms and ensuring that perishables are shipped at the right temperature and to set industry standards.
In response, Van Gelder said improving the speed and quality of supply chains would help reduce waste and therefore offset the cost of improving supply chains.
He said: “There is a lot of money to recover in how we do it today. We have 45% waste and if we can reduce it to 20% we win already a lot of money within that final price of the product.
“Today, the retail pays the waste in the final product offering to the consumer. When we shorten the supply chain, when we do a gateway access point, immediately out to final delivery, then we gain a lot of cost and we gain a lot of quality.
“We will gain time, we are more rapid on the shelf and we will recover dollars that we waste now and product that we waste. We are already paying for it.”