Perishables bear fruit: Why air cargo shouldn’t fear modal shift

Not so fast

Before forwarders who specialize in perishables start abandoning their ocean contacts in droves, Chris Connell, president of Commodity Forwarders Inc. (CFI) and also chairman of the Airforwarders Association board of directors, said any enthusiasm for an airfreight renaissance for edible perishables should be taken with a large grain of sea salt.

“There will always be a market [for air transport] for soft berries, like raspberries and strawberries,” Connell said. But there is little evidence, he added, that any perishable food currently being shipped on the ocean will move to airfreight. “Our company started in 1974 and we used to send blueberries by air. But not in the last eight years have we sent a single blueberry by air.” he said. “For the vast majority of edible perishables, when it goes by sea, it’s not coming back.”

Part of the reason, Connell said, is that some commodities are now being grown in more far-flung locations. “Washington state [in the U.S.] has a good, solid crop of cherries,” he said. “But there are Spanish and Turkish varieties, too.”

The rising global middle class has been much discussed as a driver of perishables growth, but Connell argued that it may be years until a noticeable change would be made. “Long-term, it certainly has momentum,” he said. “But when you’re talking about the middle class, all that wealth has to trickle down, and that takes a lot of time to work its way through.”

In addition, he said, there’s no guarantee that these new markets are going to want to eat new foods. “Air cargo doesn’t help at all if no one buys it,” he added.

The trick to make sure consumers stay interested in these foreign or exotic foods is to emphasize their newness and exclusivity, said Rogier Spoel, policy manager for airfreight at the European Shippers Council. “Air cargo is best if it’s carrying a new product, if there’s a constant flow and if it is competitive,” he said.

Here is another of air cargo’s main advantages, besides speed. “It’s easier to start a new market with airfreight than with seafreight,” Spoel said. “When a new trade lane opens up, the best way is to try it by air first. Then, after the market matures in a few years, they may switch to seafreight.”

Air also has the advantage of reaching new markets where there are no ports or well-maintained roads. “You can’t always dock a boat everywhere,” he said. “You may have to rely on inland transport, and that’s not always the case. In Europe you can get just about anywhere by truck in about five hours. But in Africa and Latin America, it can take days to get to a population center.

By paying close attention to the short growing seasons for many kinds of produce, forwarders and carriers can use modal shift to their advantage by arranging shipments during times of peak demand. Air cargo can be used to “supply the markets during the beginning of the season” and ship commodities “to cover the ‘first to market’ shipments,” said Lufthansa Cargo’s Dehio. “Later in the season [shippers] may shift to ocean where possible, depending on the duration of the ocean voyage and the sensitivity of the fruit.”

In some ways, carrying perishables can become a defensive tool for some carriers to protect the market share they already have.

“New markets will go by air early on, which is what we call the ‘shoulder seasons,’ on the front and back of the growing season, where demand spikes,” Connell said. “There are multiple windows of opportunity for airfreight, because there are definitely multiple short seasons. In the early spring, we are always short on lettuce, so there’s a nice lettuce spike going into Amsterdam, and we’ll need three to four weeks of air cargo that can meet the standards.”

There has been more opportunity in the last 18 months for perishable airfreight, since marine companies began adopting the slow-steaming technique to save fuel and reduce greenhouse gas emissions, Connell added. “Rates on the ocean can’t really get any lower,” he said. “And with the new labeling requirements for meat, the slower ships present problems with ‘use-by’ dates under food safety protocols.”