LOS ANGELES – While global political uncertainty and trade tensions have applied downward pressure on general cargo volumes for 2019, stakeholders at this year’s Cool Chain Association Americas Conference contend that specialty perishable food products have seen continued growth.
On the sidelines of the conference, Air Cargo World sat down with CCA Chairman and Cargolux Global Products Manager Pharma & Perishable Stavros Evangelakakis and CCA Secretary-General and ALHA Group, Pharma & Business Development Manager Nicola Caristo to discuss their outlook for global perishables markets and how the industry should collaborate to meet growing demand.
Read on for the Q&A.
ACW: How does the LA market compare to other regions in the United States and globally?
Evangelakakis: California is a big exporting region for fresh produce and as we found out in the CCA Americas Conference we just came out of that almost 65% of the fresh fruits produced within the U.S. are by California. So, there’s a big market and there is also a big exporting market from Europe and especially to the Middle East.
Other places you see these products high in demand more and more is with the middle class in China. They really want nice fresh products. In the years to come, I think there will be a change in logistics to provide this market with absolutely fresh goods, whether it’s going to be one kilo or two kilos. So, I think China is definitely a hot spot. There’s also the three billion people expected to join the global population in the years to come and that’s going to have an effect as well, regardless of where they are from.
Caristo: Both export and import-wise, the perishable products coming out of the U.S. are growing. In addition to this, I can add there are some airports, like Hong Kong, which just got its certification for CEIV Fresh products this year, as well as others ongoing, seeking to harmonize this new certification with their CEIV Pharma one. Of course, this will help the producers and the freight forwarders to use those lanes even in conjunction with sea freight for those products.
ACW: Can you tell me more about some trends in perishables you’ve seen over the past year? What shifts in demand have there been?
Evangelakakis: I think what has changed after the last, not only year but one or two years, is that more and more kinds of fresh perishables are in demand, especially into Asia and China. I think the trend is growing and has been for the last five to ten years.
Caristo: Yes, I agree. Being based in Italy, I’ve seen the market for perishables there is going up, especially export wise. But typically speaking I’ve also seen all the high-value specialty products are starting to use air cargo over the past few years.
ACW: Where do you see room for development in perishable and/or pharma handling? What recommendations do you have to logistics stakeholders in meeting these needs?
Evangelakakis: I wouldn’t say gaps, but I think over the last years many conferences have been talking about collaboration. Basically, all the partners need to come to one table and really collaborate in a way they can improve with their own process. And I think this is a big step because the air cargo industry and airline industry is so siloed in a way that you have a trucking company, you have the ground handler, you have the airport, you have the airline, you have the forwarder, you have the customers, all of these separate units that have to really work together toward a better approach. And I think that’s where we are right now. You have many associations working to create standards and looking at how to modify and make the process of the existing order for the industry better than it used to be.
Caristo: Related to this point, I believe that air cargo can work to address basically three different levels. On a very basic level, there is the community, linked to the airport. Airports, of course, are the entry and the exit point of our chain. The community approach is helping the airports to work in a more transparent way and a more organized way. This requires the airport to be connected. So, we have to work on lanes, in my opinion. On the second level, there are the associations, for instance, the Cool Chain Association is exactly this. It is a neutral place where all the airports and stakeholders within the airport and supply chain can meet to work on connecting the dots based on lane and based on product. Then the higher level is the regulatory environment because all the things that are done and developing within the chain have to be included in the standard, that revelation. And then we need to connect again to IATA and the local regulators. And so, it’s a process of continuous improvement.
Stay tuned for the release of the entire video interview with Evangelkakis and Caristo soon.