International Floriculture Forum touches on airfreight capacity crunch

HAARLEMMERMEER, Netherlands: Future changes facing the world’s cut flower industry were the focus of attention at Union Fleurs’ ‘International Floriculture Forum’ held on 6 November, the day before the opening of the International Floriculture Trade Fair (IFTF) in Vijfhuizen, Netherlands. A panel of industry leaders debated the outlook for the industry and how it can stay relevant in a changing business environment.

The forum covered the entire flower supply chain, from breeding to production, transportation to wholesale and retailing to marketing. The battle for air freight capacity to be more precise was, predictably, a hot topic.

Over the past few years, air cargo firms have sought for lasting cost cuts following a significant fall in freight prices. Invited as one of the Forum’s keynote speakers, KLM CEO Pieter Elbers explained how the company trimmed its cargo fleet to battle overcapacity and become more eco-friendly. It retired its fuel-guzzling MD-11s amid goals to drop the total amount of carbon emissions it produces by 20% in the year 2020 (compared to its 2011 levels).

Apart from modernising and downsizing their fleet the freight carrier industry is also searching for new markets, preferably in higher-margin areas such as pharmaceuticals. As such, flower growers around the world are concerned that the competition with equally time and speed-sensitive, but much higher value, cargo will become increasingly fierce.

KLM boss Elbers said the company’s future focus in air cargo shipments will be on parcel, pharmaceutical and fresh produce delivery. Currently fresh cut flowers and foliage make up 30% of KLM Cargo fresh produce shipments and 10% of the division’s total cargo volumes: 10 kilograms of air cargo accounts for 1 kg of flowers.

What’s more, air freight forwarders face increasing pressure to automate and digitise their business. It is predicted that air cargo firms will see more warehouse robotics, while they will work more closely with adjacent value-chain partners, for example providers of intermodal services. Another serious challenge is the freighter aircraft slot capacity crisis. At Schiphol-Amsterdam airport, Europe’s third largest cargo hub by volumes, air cargo traffic is increasingly locked into traffic congestion. The rejection by the Dutch government of a recent plan to ease the freighter aircraft slot capacity – allowing freighter operators to access a percentage of unused aircraft slots – makes the future no rosier.