FCI – Reflecting on the long-term impact of COVID-19

FCI issue: July – August 2020

Fred van Tol

After the shocking arrival of COVID-19, and the enormous impact on our personal lives, we are entering a slow period of recovery. All over the world, lockdowns are easing. Governments give instructions about social distancing, and we are all starting to take up ‘normal life’ as well as possible.

I am happy to see how resilient our floriculture sector is and that there is a good chance we will survive the COVID-19 crisis, which has become an economic crisis.

Where we feared at the beginning of the pandemic that this would lead to a shakeout of companies, it seems that many of them were financially strong enough to get through a period of no sales and income with ongoing costs. But in the global recovery, we also see that things are changing for the long term. I have mentioned our digital platform strategy before, and every day we get confirmation that we are moving in the right direction faster than ever.

But we also see changes in the supply chain. Airfreight capacity has been a significant problem, primarily due to the decrease in the number of passenger flights. Royal FloraHolland has taken the initiative to set up sea freight lines between Kenya and Europe, and the first containers are on their way. We are also looking at opportunities for Latin America to increase volumes to Europe.

Over the past few years, the growth of sea freight to transport our products has been considerable, and with the knowledge, we have gained in the past, we are now able to ensure that the products arrive at their destination in good condition.

New techniques and a controlled supply chain are the key ingredients. But we also see the shift (back) to cargo aircraft. Airlines have switched to passenger aircraft in recent decades, but now that demand for passenger transport has fallen sharply, they are rebuilding the capacity of aircraft suitable for cargo. Airports need to change slot times to provide more space for these cargo flights.

Another effect is the growing interest in local production. Several industries, such as construction and automotive, are looking for factories closer to the place of assembly to be more independent.

During the lockdowns, there were no spare parts available, and to avoid this situation in the future, they spread their risk. I see the same signals in our industry. Breeders ensure that their breeding companies spread across more countries. In this way, they can guarantee that production will also be available at a specific time. And if you look at the portfolio of greenhouse builders, the production of flowers and plants, but also vegetables, is shifting to local-for-local use.

Hopefully, there will be no second wave of COVID-19 to follow. The world has suffered a lot, and we need to rebuild the economy as soon as possible. Our beautiful flowers and plants will contribute to a colourful environment.

Stay safe; stay healthy

Fred van Tol
Manager of International Development, Royal FloraHolland

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