Suez authority eyes swift return to canal, but it's 'safety first' for carriers
Container lines will not restart Suez Canal crossings until May at the earliest, believes Yang ...
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Carriers prioritising profit when deploying freighter capacity have caused “headaches” for Kenyan flower shippers forced to dump a significant portion of their produce.
At last week’s World Cargo Summit in Bruges, the MD of Florius International, Willum Van den Hoogen, shocked delegates by revealing that some 20% of his flower shipments from Kenya had been “dumped on the compost heap” in November, “because there simply was no cargo capacity out of Kenya into the Netherlands.”
Eline van den Berg, supply chain specialist at Royal FloraHolland, explained that Ethiopia benefited from regular Ethiopian Airlines flights to Liège and Brussels – with rates and capacity largely stable post-Covid – she told The Loadstar it was “a different situation” in Kenya.
“Capacity still hasn’t recovered to pre-Covid levels, and actually, what we’ve seen in the last year because of ecommerce, several airlines took some capacity from Kenya and the rates in general have increased a lot.
“So that causes our growers a lot of headaches. Growers have to decide which flowers they want to ship to the auction and which they keep at home and destroy,” she said.
Jeroen van der Hulst, owner & founder of Flowerwatch, also iterated that there was also a shortage of air cargo capacity out of Nairobi.
“Certain moments of the year products cannot be flown out. And, at the same time, we see capacity going down, we see the freight rates going up, and the industry is responding to that,” he said.
And delegates heard that this capacity shortage was being exacerbated by a “perfect storm” of the Suez Canal closure and ecommerce boom amplifying the demand for already-squeezed airfreight capacity.
Other flower-growing regions, such as South America, have been able to benefit from backhaul routes of ecommerce demand, but this not the case in Kenya.
“We don’t see much ecommerce coming into Africa yet, like we saw with Colombia. So, we don’t see this incoming capacity coming into Africa, but the outgoing capacity goes up,” said Mr Van den Hoogen.
According to him, growers must estimate demand often five to seven years before yield, and so flower production in Kenya is still expanding.
“I know there are a lot of people that are building new flower farms in Kenya. So, I know that there is more demand going to come out of Kenya into Europe. It’s creating jobs, people are building greenhouses; it’s extremely successful.”
However, he added that he had “sincere doubts” about airfreight’s ability to keep up.
“That’s eventually where sea freight comes in. But the point is, we’re still with a Suez blockage”. The added transit time for Cape of Good Hope diversions is generally too risky for perishables shippers’ time-sensitive produce.
Stakeholders have called on airlines to maintain stability and reliability.
“Production in Africa has been there since the 80s and 90s. We are a very reliable and stable sector. And for that reason, I find it very difficult to see that some airlines have taken capacity out of this market,” Ms van den Berg told The Loadstar on the sidelines of the conference.
“I understand of course that they shift some capacity to the other more profitable routes, to Asia. But with our history as being a very stable business with daily shipments, I would also plead for some loyalty,” she concluded.
Listen to this clip from the new Loadstar Air Cargo Podcast on Amazon Air Cargo’s ambitious growth targets for 2025, from Tom Bradley, director and GM, Amazon Air Cargo. We’d like to thank Air Charter Service for supporting independent journalism via our podcasts
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