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Keeping their cool

The continuing growth of the perishables market is making airlines sit up and take notice. Ian Putzger examines how the improving global market is bringing new technologies into play

In early December Emirates SkyCargo proudly proclaimed that the volume of perishables moving through its freighter hub at Al Maktoum International airport, which opened earlier last year, had passed the 35,000 tonne mark. The announcement reflected both the carrier's strong focus on perishables and the rapid growth in this segment.


Forwarders confirm that a rising number of airlines have either beefed up their offerings when targeting perishables, or simply started focusing on them. Even the integrators are now chasing this traffic. "Airlines are really aggressive with the perishables market," comments Alex Strohmeier, Manager of Kuehne + Nagel in Halifax, Nova Scotia, a regular source of seafood shipments.


Unlike the general cargo market, perishables showed strong growth in 2015. "We had double-digit growth in the past year along with the industry itself, which also had double-digit growth," notes Markus Fellmann, Global Vice President of Hellmann Perishable Logistics.


American Airlines Cargo is expanding its cold chain capabilities. It has built a new 3,500ft2 cooler in Dallas/Fort Worth that was due to open in January. In London, unable to expand the footprint of its limited facility, it resorted to hooking up a refrigerated trailer in order to boost cooler capacity, reports Carmen Taylor, Managing Director for Latin America.


Operators say that though there has been growth across the spectrum, there have also been some weak patches. Air France-KLM Cargo has seen a decline in flower traffic both from East Africa and the Andean nations to Europe. Pieter Fopma, Director Perishables, attributes this chiefly to the weakened Russian market, which used to be a prime destination for this traffic.


Some markets stand out for their rapidly expanding appetite for perishables. "For us, what's really booming is the Middle East. There is huge demand there," says Fellmann. Even large volume shipments of potatoes are flown there, he adds.


Hellmann officially opened shop last year in the region, which will be a major focus for 2016. "We look at our own dedicated cold storage. This is in planning right now," he says.


Another buoyant market is China. "The overall economy may have slowed, but there is a vast population with disposable income, which is showing an appetite for good perishables," says Daniel Johnson, Manager, Global Products at IAG Cargo.


A few years ago most of the perishables that American was hauling out of Latin America terminated in Miami. Then, the airline managed to convince customers to move some of their exports through Florida to Europe, says Taylor. The past two years have seen a rise in perishables going to Asia, such as papayas from Brazil heading for stores in Japan, China and Korea. A big factor was the launch of a São Paulo-Los Angeles route with Boeing 777 aircraft.


Fopma notes that China is opening up to a broadening array of perishables, such as lobsters and bell peppers. "We see the pre-packaged food segment growing particularly fast," he adds. For Emirates, one of the hits to Asian destinations has been the haul of lobster from the American Northeast. Lobster from the Canadian Maritimes was also a major factor behind the launch of a transatlantic freighter from Toronto, via Moncton, to Brussels by KF Aerospace last year.


For his part, Johnson has seen strong demand from Chinese consumers for premium seafood like crabs and razor clams. While fruits and vegetables will always constitute the bulk of the traffic, they are highly commoditised; the juicy growth is in the premium segment, he says.


This trend often goes hand in hand with heightened expectations. "Customers demand more from carriers. Sometimes this plays to our advantage with the investments we've made to improve our service," Johnson says. To some extent, this is driven by mounting regulatory pressure reflecting heightened standards of food safety guidelines. Chris Connell, President of perishables specialist Commodity Forwarders, finds that compliance rules for perishables entering the US seem to be getting tighter.


“The whole food safety area is going to continue to be a big deal, but there is not a lot of formality around it yet. It will probably be a year or two before we see an impact there," reflects Tim Strauss, Vice President, Cargo at Hawaiian Airlines.


Uneven application of such standards can be a headache too. Imports into Europe are subject to EU regulations, but the execution and implementation varies by country, remarks Fopma. If one jurisdiction at a large European gateway has a less strict approach than another, more perishables will flow to the former, he says.  >>

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