Logistics And Frieght Forwarding

Flower shippers latest to test maritime cold chain

Flower shippers are just one group of many that have begun to try out refrigerated ocean shipping.

AMSTERDAM — The world’s largest trading center for plants and flowers is experimenting with refrigerated ocean containers — a cheaper, more environmentally friendly shipping solution that could shake up an industry that has historically been dedicated to air cargo.

Royal FloraHolland’s use of refrigerated containers reflects a broader trend in which shippers of commodities that typically rely on air cargo, such as pharmaceuticals[1] or seafood[2], have begun to experiment with the maritime cold chain as reefer container technology and control advances.

Transitioning from air to ocean freight on key lanes from growers in Africa to the marketplace outside of Amsterdam could cut costs by 38 percent and cut greenhouse gas emissions by another 87 percent, officials at Royal FloraHolland said.

The Dutch florist conglomerate trades more than 12 billion flowers a year. Although the group has been experimenting with ocean containers for nearly 10 years, the number of flowers moving via ocean container is so small officials simply describe the proportion as “not substantial.”

“At the moment, it’s not substantial,” said Edwin Wenink, director of the center’s Floricultural Logistics Optimization Worldwide, or FLOW, program. “But it could, it should, be 30 percent.”

That major modal shift will require a major mental effort to accomplish, said Wenink. That goes for both the conglomerate and for the air cargo carriers, like KLM, which it uses today, and the ocean cargo carriers, like Maersk Line[3] and Mediterranean Shipping Company[4], where it sees its future.

With the right partners and strategic backhaul opportunities, it’s a real possibility, he said.

Royal FloraHolland is known as Holland’s Wall Street for flowers. It is one of the largest auction companies in the world and handles roughly 50 million shipments every year. While 65 percent of everything traded is sourced directly from the Netherlands, a large portion of the remainder comes from warmer climes in places like Ethiopia and Kenya.

That cargo is transported to auction by air via the nearby Schiphol Airport[5], Europe’s third-busiest air freight hub[6] just minutes from Royal FloraHolland’s doors.

It’s a system that has worked for years. Air cargo is especially compatible for the time-sensitive flower industry. However, Wenink said, it is also expensive and not especially environmentally friendly.

“The old-fashioned way of transporting is not really well equipped to handle our supply chain,” Wenink told JOC.com. “So, we started thinking about how we could use deep-sea containers.”

Under the [email protected] initiative, Royal FloraHolland has been experimenting with refrigerated, or reefer, ocean containers, partnering with 2M Alliance partners Maersk and MSC.

The containers essentially keep flowers at such low temperatures “they fall asleep,” said Wenink, and can remain fresh during the duration of the 28- to 30-day journey from the growers in Africa to the traders in Holland.

The conglomerate’s experiment with ocean transportation faces several challenges preparing backhaul arrangements for empty reefer containers that are left in Holland once flowers from Africa are unloaded, said Wenink. There simply isn’t a sufficient market for refrigerated cargo moving from Holland to Africa, he said. After 10 years of experimentation, Royal FloraHolland is still looking for those match-back opportunities.

The answer may not be a direct point-A-to-point-B solution, Wenink said.

After all, the conglomerate today moves the majority of its cargo from places such as Ethiopia and Kenya to the Netherlands by plane, and while there is healthy passenger air traffic between those destinations, the amount of cargo moving to Holland is far greater than the amount of passengers traveling to the African countries.

It’s why Royal FloraHolland has worked with its partners to develop a logistics triangle wherein passenger planes travel from Holland to South Africa on the first leg to deposit passengers. Planes then fly north to Kenya to take on passengers and cargo headed to the Netherlands before returning to Schiphol.

That is the sort of ingenuity that Royal FloraHolland wants to recreate with the [email protected] initiative, and it’s ingenuity that the Dutch flower conglomerate plans to take on itself, if only because as the world’s largest trading center of its kind it has one thing other shippers don’t: leverage.

“Today, shippers don’t feel responsible for the cargo they ship out. You must feel responsible for all the cargo boxes you ship out,” he said. “It’s easier for me to talk to Procter & Gamble than my logistics service provider.

They don’t have the leverage.

We do.”

The Netherlands Foreign Investment Agency assisted with travel costs that helped make the reporting of this story possible.

Contact Reynolds Hutchins at [email protected][7] and follow him on Twitter: @Hutchins_JOC[8].

References

  1. ^ pharmaceuticals (www.joc.com)
  2. ^ seafood (www.joc.com)
  3. ^ Maersk Line (www.joc.com)
  4. ^ Mediterranean Shipping Company (www.joc.com)
  5. ^ Schiphol Airport (www.joc.com)
  6. ^ Europe’s third-busiest air freight hub (www.joc.com)
  7. ^ [email protected] (www.joc.com)
  8. ^ @Hutchins_JOC (twitter.com)



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