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While growth in global trade and demand for air freight is stalling, Air France-KLM Cargo is going full throttle to further adopt technology-driven innovation. “The capability of processing massive amounts of data will help bolster our market position in time and temperature-sensitive goods such as fresh cut flowers,” says Eric Mauroux, the airline’s global head of perishables, adding that supply chain collaboration can create (loading) efficiencies that will benefit the entire industry.

According to the Global Shippers Forum(GSF) freight is an important indicator of global trade trends and although air freight takes up only a small proportion of all freight by tonnage (2-3%) it can represent a significant amount of a country’s total imports and exports by value, between 30 to 40% in many advanced economies. Vital for transporting high value and perishable goods, with speed air transport offers a much faster shipping method than sea freight or road transport. The International Air Transport Association (IATA) reported that volume of cargo carried in 2018 rose to 62.5 million tonnes (+4.5% on 59.9 million tonnes in 2017) representing less than 1% of world trade by volume, but over 35% by value. The value of goods carried by airlines exceeded $6.2 trillion in 2018, representing 7.4% of the world GDP.



In a global context, perishables represent 16% of all air cargo. Perishables have an even bigger share 25t ir France-KLM, says Eric Mauroux. “They are our bread and butter, at 30%, they are even more dominant at KLM as the Netherlands has a long tradition in horticulture. Fresh is what defines us as a company. When industry professionals think of Air France-KLM Cargo, they picture planes with perishables first. While flowers are vital to KLM, fish and fresh produce are ‘frequent travellers’ on board of Air France aircraft. In 1990, Air France acquired ‘DC-10 operator,’ and my former employer, UTA, then one of the major air cargo companies that relied on a large cargo network in Africa. And naturally perishables are what you carry most out of Africa.“ In 2018, the airline’s cargo volumes decreased by 0.1% compared to 2017 to 1.14m tonnes, while revenues increased by 4.1% to reach 2,288m euros. In terms of volume, Ecuador, Kenya, Colombia and the Netherlands are the company’s four major ‘flower routes’ . In Kenya alone, Air France-KLM Cargo ships around 18,000 tonnes of fresh flowers to Amsterdam.

Commenting on the first six months of 2019, Mauroux says, “After the highs of 2017 and the first months of 2018 with record figures of up to 10% growth there were signs that the market was starting to cool by the end of 2018, a situation which has now been confirmed by all actors of the supply chain.” He foresees more turbulent times ahead for air cargo as global economic activity and consumer confidence weaken and geopolitical tensions disturb markets. In keeping with tradition of what has been noted over the past seven years, perishable products can cushion air cargo when it faces strong headwinds. “When there’s an uplift in air freight demand perishables tend to bear the brunt of the pressure due to the lack of affordable air cargo space. Now that that demand is shrinking, capacity increases and this results in a strong and steady growth for the perishables sector. However, more generally speaking, it’s an extremely competitive business environment out there.”



Sustainable growth is the company’s top priority which means a rate of growth which can be maintained without creating significant economic problems, especially for future generations. “Consumers have become more demanding and sceptical when it comes to brand credibility. Unfortunately there are a lot of misperceptions and prejudices with regard to air-freight products. Taking a broader view, everyone in our industry knows that the environmental impact of growing, for example, cut flowers in a country with a sun-drenched climate and benign winter temperatures is likely to be eight times less than flower production in a greenhouse during the gloomy and chilly winters in the Northern hemisphere , even if you include the movement of goods by air.” Reducing greenhouse gas emissions is only one important element – the aviation industry is always keen to point out that planes account for only around 1 to 3% of global CO2 emissions. “Consumers and policy makers are often unaware of the societal impact. From a development and poverty reduction angle, commercial flower production in Kenya, for instance, has been a success story with the sector employing over 90,000 people.” Mauroux sees room for improving the quality of the dialogue with discussions and decisions based on accurate information. True sustainability might start with a different mindset, he says, referencing KLM boss Pieter Elbers’ recent comments on the environmental footprint of passenger air travel. “Enjoy, but fly with moderation is what Mr Elbers said in an interview with a Dutch newspaper.”


He is quick to add that sustainability costs money and is worthless when it doesn’t work for businesses too. “We must ensure that our business model is profitable by flying with greener planes, choosing the right trade lanes, the right balance between origin and destination airports.” Operating economically sound round trips remains a challenge as there’s not always sufficient cargo. “Taking off from Kenya means you have to go there first, so in terms of southbound flights you need to find the right circular flights to make these types of operations profitable.” Profitability and sustainability go hand in hand. Over the past few years, air cargo firms have sought lasting cost cuts following a significant decline in freight prices. Air France-KLM Cargo 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). Mauroux anticipates his company will become increasingly reliant on belly freight for certain routes, as is the case with many other carriers around the world. “You need freighters in specific countries such as Ecuador with altitude constraints and subsequent pallet restrictions. For other routes and destinations, passenger aircrafts offer plenty of airfreight capacity, especially the new type of aircrafts like Boeing Triple Seven and Dreamliners that can carry an extra 20 tonnes.”


Meanwhile it is no secret that African flower exporters would like to break into the US and Chinese markets. Mauroux: “It is true that the highest growth in flower sales is predicted in the USA and Asia but the situation on each continent is different. North America is already heavily supplied by South America. Official figures reveal that there’s a 6% growth in North America but in terms of tonnage flower shipments between Kenya and the USA are not very spectacular.”

There are barriers. Transporting Kenyan flowers to Miami – a stopover in Europe or the Middle East is a costly exercise as on these route flowers are competing with another type of goods. “You need to get access to capacity and therefore there is an impact on the yield. The question is whether the market is ready to bear these costs. Also, when you look at the direct lift available from Kenya to the USA it is limited. Kenyan Airways has begun direct flights to New York but to develop exports you need a certain critical mass and will this lift then be sufficient? I think African exporters need to be in a position where they can compete with flowers from Latin America, grown close to market and benefiting from daily direct lifts from Bogotá and Quito.” Asia, and China in particular, could be other interesting export ventures for African and Latin American flower growers. Here, the big question is how to reach sustainable growth on Asian routes. “There is clearly a demand for fresh cut flowers in China and Asia as a whole. However, China itself is also a major flower producer. How long will they source flowers from outside? Meanwhile, we expect some growth in China in the coming ten years. Air France-KLM Cargo has 26 flights to Shanghai at its disposition weekly. These carry a lot of flowers, not only to China but also to Australia thanks to our partnership with China Southern.”


To maintain its leading position in perishables , Air France-KLM Cargo continuously seeks to improve its value proposition. Bottom line is the value of a flower is in its shelf life. A prolonged shelf life reduces product waste and will lead to return purchases. “What was missing was an objective assessment of that quality and, therefore, we teamed up with cold-chain management expert Flowerwatch from the Netherlands to develop a KPI indicator, called ‘degree hour’,” says Mauroux. He continues, “This is the average temperature of fresh flowers multiplied by the number of hours they’re under way (1 degree hour = 1 hour x 1°). Every 500 degree hours reduces vase life by one day. The industry benchmark is a cold chain in which there is no more than a one day loss of vase life. Thanks to the Flowerwatch seal of approval we now carry flowers out of Colombia to Amsterdam at 300 degree hours generating one additional day of vase life. For the same type of shipment, the degrees hours of our competitors are 500.”


Pondering the damage that is being done to the reputation of the aviation industry and worldwide economies due to delays and flight cancellations Mauroux says there are more tools to differentiate yourself from competitors such as LAN, Atlas and Cargolux. Enabling modern processes with digitalisation, cold chain transparency, data exchange and crunching will help build a stronger market presence in the transport of time- and temperature-sensitive goods such as pharmaceuticals and perishables. “In Colombia, we have set up this ‘ecosystem’, which includes a breeder, one of the country’s biggest flower farms near Bogotá, freight forwarders, airport authorities, airlines, wholesalers and importing retail business in Europe. We have asked ourselves how to create additional value in the chain. Everyone looks at it from a different angle- a breeder will make sure that his newest flower variety has excellent shelf life, while a retailer will use his understanding of the cold chain in marketing.“ In a highly fragmented interdependent business such as flowers, Mauroux urges the industry to get well-organised. “As an industry we must be able to communicate the hard facts. Otherwise we will never progress and improve.”


Mauroux subscribes to his adage ‘when you take preventive measures upfront you can gain a lot’. The same philosophy is shared by the Holland Flower Alliance (HFA), a partnership between Air France-KLM Cargo, Royal FloraHolland and Amsterdam Schiphol airport, established three years ago. HFA’s first exercise was to hack its way through the jungle of over 500 different types of boxes, which resulted in the Flowerbox. ““The Flowerbox is a prime example of standardised packaging allowing for increased loading efficiency of pallets and significantly fewer degree hours. In a broader context, HFA organises every aspect of what we call the ‘journey of a flower’ from a farm in Kenya to FloraHolland in the Netherlands. In ‘pilot journeys’, real time GPS tracking provides visibility of both the shipment data (size of the shipment, flower type, number of stems per box) , progress and product quality.”


Supply chain optimisation is not a luxury in a world with slot-constrained mega airports. For Amsterdam Schiphol Airport for example the ‘Covenants on the future development of Amsterdam Schiphol Airport’ stipulate that the airport cannot exceed the 500,000 Air Traffic Movement a year. “I am not sure whether I am the most qualified person to comment on this. Slot limitations are a fixed parameter for airlines, especially where your home base is concerned. Twice a year allocation of slots is like a giant jigsaw puzzle. As a result of increased passenger traffic worldwide and a new generation of aircraft, increased capacity on these aircraft allows for more cargo capacity. All in all, I would say slots are not the main issue when it comes to moving perishables on Air France-KLM Cargo, not even during peak periods. “Speaking of cold chain optimisation and transparency, Mauroux sees little additional value in a web based air cargo search engine, a kind of for air cargo. “There are some initiatives such as webcargo but I am not an expert to comment on it. Of course it is nice and handy to go to booking. com because you can compare rates and locations. However, the criteria in the air cargo industry are slightly different. We usually speak about long-term relationships. While you can easily shop around in other types of businesses, perishables are quite a close-knit family. is nice to have, but it’s not for us.”