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Modal shift in Flower Supply ChainThreat or lessons to be learned for air freight supply chain?
Cool Chain Association, Paris, Christo van der Meer MSc, May 2014
Agenda
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Introduction FloraHolland
Global Flower Trade
Sea Freight of flowers: wow, why and how
Worldwide Flower Container Flows
Zoom in: Modal Shift Colombia
Coming up: sea freight of roses from Kenya
Recommendations to air freight supply chain
Key messages
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1. Modal shift of flowers from air to sea will increase.
2. Flower Supply Chain will always need air freight.
3. Air Freight Flower Supply Chain can learn from Sea Freight.
Agenda
4
Introduction FloraHolland
Global Flower Trade
Sea Freight of flowers: wow, why and how
Worldwide Flower Container Flows
Zoom in: Modal Shift Colombia
Coming up: sea freight of roses from Kenya
Recommendations to air freight supply chain
Introduction FloraHolland
• Flower Auction • GROWER owned Cooperative:
4,900 members (inter)nationally• Largest stocked flower
sales center (20,000 diff flowers)
• Distribution to 200,000+ points of sale in Europe
• WALL STREET for world wide flower prices
• Auction CLOCK and DIRECT sales
FloraHolland Facts & Figures
FLOWERS PER DAY
PLANTS PER DAY
TRANSACTIONS PER DAY CLOCK
SUPPLIERS
TRADERS
EMPLOYEES
CLOCKS
ANNUAL TURNOVER
IMPORT COUNTRIES
EXPORT COUNTRIES
Agenda
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Introduction FloraHolland
Global Flower Trade
Sea Freight of flowers: wow, why and how
Worldwide Flower Container Flows
Zoom in: Modal Shift Colombia
Coming up: sea freight of roses from Kenya
Recommendations to air freight supply chain
Global Flower Trade
Consumption of cut flowers per capita (€/year)
50
64
49
44
42
42
40
40
35
33
26
Source: PT Online
Seasonality in flowers sales week 1-26 (mio €)
0
35.000.000
70.000.000
105.000.000
140.000.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
2010 2011 2012
Valentine Mothersday-UK
Int. Womansday
Easter
Mothersday NL
Mothersday Fr
Agenda
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Introduction FloraHolland
Global Flower Trade
Sea Freight of flowers: wow, why and how
Worldwide Flower Container Flows
Zoom in: Modal Shift Colombia
Coming up: sea freight of roses from Kenya
Recommendations to air freight supply chain
Sea Freight Supply Chain
HarvestGrading+1 day
ConsolidationTrucking to port +2 days
Antinarcotics/ICAContainer Load + 4 days
Sea freight +13 days
Local transport Delivery +1 day
Int. transport Europe+3 days
Shelf life+2 days
Vase Life+7 days
= 33 DAYS (AIR: 17 days)
WOW! Flowers by sea container???
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Key to success in sea transport of flowers lies in managing the supply chain from farm to shelf.
Basic Elements Flowers@Sea Services:
• Standard Operating Procedures for top 5 flowers
• Post Harvest Advice
• Consolidation
• Palletising, Pre Cooling and Transport
• Cool Chain Monitoring
• Arrival Check
• Vase life tests
Plan-do-check-act: manage the total Supply Chain
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Business Case
Parameters
Costs seafreight 40ft High Cube Consolidation Nairobi $800
Transport and sea freight $8.950
Logistics NL, loggers, clearing, fee $2.000
Total $11.750
Equivalent Costs airfreight low Equivalent Costs airfreight high
Price difference low season $5.270 30%Price difference high season $7.018 37%
Logistic costs of flowers out of Kenya are 50% of CIF/costprice.
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Official Carbon Footprint calculations air and sea
International Standard PAS2050:2011
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Transparant Cool Chain
SEA
AIR
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Transparent Cool Chain
• Temperature and duration are key for flower quality in transport.
• The factor of temperature x duration is called degreedays or in short dC (days Celsius).
• A rose can last about 250 dC.
• Consumer vase life take most of the 250 dC: 7 days x 20 degrees = 140 dC
• SEA freight in a container at setpoint 0,5 deg C x 25 days = 12,5 dC.
• AIR freight: 1 day x average 10 degrees is 10 dC.
• Just as important: stability in temperature
Agenda
19
Introduction FloraHolland
Global Flower Trade
Sea Freight of flowers: wow, why and how
Worldwide Flower Container Flows
Zoom in: Modal Shift Colombia
Coming up: sea freight of roses from Kenya
Recommendations to air freight supply chain
Current flow of containers (containers per year)
Col-UK: 700Col-Eur:100
Ecu-USA: 50
Ecu-Eur: 100
Ken-Eur:50
Vie-Jap: 400
SA-Eur: 75
Col-Chi: 25
NL-USA: 40
Isr-Eur: 300 Col-Jap
Col-Aus: 25
Agenda
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Introduction FloraHolland
Global Flower Trade
Sea Freight of flowers: wow, why and how
Worldwide Flower Container Flows
Zoom in: Modal Shift Colombia
Coming up: sea freight of roses from Kenya
Recommendations to air freight supply chain
Developments in Kenya
• 120.000 tons all air freighted now
• 75% is roses• Roses are more sensitive
than Carns and Chrysanths• Lots of trial shipments at
the moment
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Agenda
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Introduction FloraHolland
Global Flower Trade
Sea Freight of flowers: wow, why and how
Worldwide Flower Container Flows
Zoom in: Modal Shift Colombia
Coming up: sea freight of roses from Kenya
Recommendations to air freight supply chain
Recommendations Airfreight Flower Supply Chain
• Air freight supply chain needs to improve its cool chain performance: be good and be transparant. Work more closely together. Make it less complex.
• Air freight needs to look at relative costs: 25% price difference is needed to switch.
• Lower middle class will buy flowers: offer routes and infrastructure to those developing cities and consumer concentrations.
Final remarks
We will always keep flying flowers because of seasonality and specific market demands.Q: what will balance be? Educated guess 70%-30%
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0
35.000.000
70.000.000
105.000.000
140.000.000
1 2 3 4 5 6 7 8 9 1011121314151617181920212223242526
2010 2011 2012
Questions?