Freight forwarders are struggling to find affordable air cargo space for cut flowers from Africa and South America to Europe these days. More and more often, the cargo airline chooses other products instead of flowers. Carriers prefer products that take up less space in the aircraft or products with a higher value, because they offer higher margins. This is what we learned from talking to a few freight forwarders at IFTF in Vijfhuizen.
A spokesperson of Rhenus Logistics for example, has noticed that airlines have been choosing fresh fish and pharmaceutical products instead of cut flowers the last couple of years. “Within the category of fresh produce, it’s even more important for fish than for anything else, that it’s transported as quickly as possible. The interests and risks are large, which increases the rates. The margins on pharmaceutical products are also much higher than those on flowers.”
When it comes to fresh agricultural produce, the margins on flowers have always been low, agreed a spokesperson of Fairways Logistics. “But recently, the competition with other products has dramatically increased. At the same time, the number of full freighters flying the required routes has gone down. More and more often now, flowers end up in passenger planes and there’s considerably less space in the belly of those aircrafts.”
Air France KLM Martinair Cargo (AFKLMP) began a complete restructuring of its air cargo division in 2015 and since then, they’ve been focusing on three different higher-segment products, explained CEO Pieter Elbers at the International Floriculture Forum in Vijfhuizen last week.
The first product group is e-commerce parcels, followed by pharmaceutical products and fresh produce (including fruit, vegetables, fish and flowers). “Around 30% of our fresh produce are flowers. And flowers account for around 10% of our total volume of air cargo. That means that out of every ten kilograms of airfreight that we transport, one kilogram is flowers”, said Elbers.
Some of the growers and other floriculture parties in the audience expressed their concerns. They fear that KLM is also going to shift their focus more and more on the products that offer higher margins.