People tend to be attracted to things that live fast and die young – such is the case with perishable commodities, a topic that has gained enormous attention among air cargo carriers concerned that these high-value commodities are being siphoned off to oceanfreight.
At a packed-to-overflowing session, called “Perishables: Flying is Fresh!”, some of the world’s top experts got together to provide a snapshot of the current market, debunk some myths about modal shift and to offer advice about how all supply chain stakeholders can cooperate to maximize value and agree on performance standards.
“Modal shift is a very sexy topic,” said Natasha Solano, global business development manager, perishables logistics for Kuehne + Nagel. “It’s so interesting that the press have taken the modal shift idea and blown it all out of proportion.” The shift between air, ocean, road and rail modes is not something new and has shifted many times over the years, “but it affects only certain commodities on certain lanes,” she said.
Some commodities, she said, will always move by air, such as certain kinds of fresh fish, flowers and berries at varying times of year. In general, demand for perishable airfreight will rise along with the rise of the middle class worldwide, which demands more fresh food. By 2050, Solano said, there will be 9 billion people on earth and demand for fresh food will be 60 percent more than it is today. “This is good news for both ocean- and airfreight.”
In his global update on emerging trends in the perishables market, Gerard de Wit, managing director of WorldACD, said that, based on the millions of air waybills WorldACD tracks each year, “perishables is where the growth is.”
De Wit’s analysis found a strong correlation between world income growth and consumption of highly perishable fresh foods, and that India and China will be the main force driving demand. “About 80 percent of perishable food today is imported by developed countries,” he said. “That is going to change dramatically,” as incomes in developing nations India and China continue to rise.
As for modal shift, commodities don’t move only from air to ocean, de Wit said. Some countries, such as Qatar, Singapore, Hong Kong, UAE and Saudi Arabia are seeing shift in the opposite direction, with more perishables shipped by air.
Frank Van Gelder, business manager for Adelantex NV, talked about the advantages of vertical integration to help reduce the huge amount of waste that occurs with perishables – sometimes as high as 50 percent for some commodities.
Recent economical optimizations in the food industry and increased customer expectations have driven logistics providers to modernize the perishables supply chain, he said. The answer, he said is to get participants in the supply chain to act more like a food company than a transportation company and focus on quality.
“Airlines today are ‘trying it fresh,’ not flying it fresh,” he said. “We don’t want to be Ostrich Airlines with our heads in the sand.”