Ecommerce and Amazon are changing the perishables logistics market

© Rosshelen

“Perishables are changing. Every day, something new comes. People want their products faster and cheaper,” according to Rodrigo De Narvaez, director business development for 21 Air.

He believes ecommerce has changed the expectations of shoppers – whether buying online or not – and therefore the requirements of retailers, which has begun to impact perishables logistics.

Speaking at Air & Sea Cargo Americas last week in Miami, he explained that he had seen avocados and even potatoes air freighted recently, despite their weight.

“Ecommerce has sped up transit times – people want the product faster and fresher.”

One of the ramifications is that carriers must now learn about requirements for products that they are not used to carrying.

“We have never carried potatoes before – we didn’t know the product at all. The industry has to get together with producers and agents and learn about new products.”

Robert Fay, president of Florida Freezer, added that Amazon’s entry into food had also altered the market.

“There is a significant paradigm shift in the way that consumers buy food. And Amazon has significant resources to make inroads. But it will also rely on supply chain providers for the things it can’t do – it can’t do it all.”

Mr De Narvaez added that “logistics has to change. Margins are getting so thin for the producer and grower”.

He recommended more direct transport with fewer stages – and handlers – in between. Instead of flying Europe’s perishable imports via the Netherlands, which was said to handle 80%, he had found leisure flights between South American and the Caribbean to Europe more efficient – and allowed for higher margins.

“Why send it to Amsterdam and truck it to Rome, when you can go direct to Rome? People are starting to understand that they can have fresh food anywhere.”

He also noted that very different buying habits in the US and Europe had an impact on perishables logistics.

“The biggest difference between the US and Europe is the size of the fridge. Europeans have smaller fridges and tend to go to the market every day or two. In the US, they buy huge quantities and only need to go once a month.”

He added that this also affected demand for ripeness: in the US, buyers want their flowers closed; in Europe, they prefer to buy them already opened, more often.

“If it’s in the fridge for a month, it’s no longer perishable. But ecommerce has meant time is of the essence – if I can’t supply goods as fast as Amazon, then I am not as good.”

He added that there were also fewer, but larger, US importers, which put additional pressure on margins and risk.

“A British importer will have many more events in a month – the US takes cargo less often. And there are fewer importers with bigger volumes.

“I would rather carry 100 tonnes for six or seven customers; I’d rather have six people owe me money than one. More importers with smaller bundles gives me more flexibility.”