Airfreight is a vital link in making the UK a competitive centre for global trade, particularly for the fresh produce industry, which relies on this fast and efficient mode of transport to import and export high-value perishables with a short shelf life.
The shipment of fresh produce by air is often considered controversial, with the speed of supply and delicate handling on the plus side, to concerns about mounting costs and the impact on the environment on the other.
Premium items from green beans and asparagus to berries and grapes are flown into the UK, from continents as far as Africa and America and beyond. A swift but pricey operation, airfreight comes into play when it is a case of value over volumes. In fact, flying produce around the world has given the industry a chance to achieve a truly global status in a way that no other mode of transport can.
Around 60 per cent of fruit and vegetables are imported to the UK to provide consumers with produce that is either out of season or cannot be grown in the UK.Of this, just 1.53 per cent of fruit and vegetables are flown into the UK and more than half (60 per cent) comes in the hold of passenger aircraft.
This mode of transport is vital to the fresh produce industry on many levels, but the last 12 months have stacked up the challenges for the sector.
The main talking points have swung from the effects of the freak eruption of the Icelandic volcano that saw an estimated 96,000 flights cancelled across Europe to on/off strikes, controversial proposals to change airfreight taxation, increased regulation and the threat of a double-dip recession to name a few. That’s without some of the more high-profile casualties including CCG Logistics (UK) Ltd and Manchester Airport logistics company Pangaean Ltd, which both ceased trading in the last year.
A resilient attitude
Heathrow is the main UK airport for fresh produce handling, supported by some of the regional airports. The busiest firms operate from this London hub and on the ground, the most forward-thinking companies are working to secure the long-term viability of their service.
Stuart Forsyth, global products manager at BA World Cargo, maintains that the hurdles faced by the aviation sector are shared across the supply chain and by other modes of transport. However, he admits that the sector has faced increased pressure as the major retailers have continued to push for better value across the supply chain.
“Profit is a big challenge and so is the cost of bringing these high-value products to the UK customer, with the quality that is right for them,” says Forsyth. “The major retailers want to be competitive, so they require high quality at the best prices and various parts of the supply chain will be challenged in this way.”
So where next for the aviation sector? And will it come back from the difficulties of the last 12 months?
Dan Myers, business unit director at Norbert Dentressangle Logistics UK, is optimistic for how trade will play out. “As the economy recovers and as long as the UK consumer continues to have the desire for the range of produce all year round, volumes will recover,” he says. “As long as there is a demand for out of season and more exotic produce, there will be a need to airfreight perishable goods to the UK.”
A tax too far?
The latest proposal by the government to introduce a per-plane tax to replace the per-passenger duty has left the industry reeling, amid fears of severe pressure on UK trade. Many are sceptical about the purported environmental benefits, but plans are yet to be finalised and any major changes will be subject to a public consultation.
Across the supply chain, businesses aim to operate in a tax environment that allows them to plan effectively. Any changes create uncertainty, and this will be one aspect that firms have to deal with as they plan for the future.
Fresh Produce Consortium chief executive Nigel Jenney is lobbying on the issue and speaks for the sector when he says he is “concerned” about the proposals. “This could impact on the availability and cost of certain fresh produce enjoyed by the UK consumer, as well as on growers in developing countries,” he says. “We believe that by allowing airlines to decide who pays for this tax, the airfreight of fresh produce from developing countries could be unfairly and disproportionately penalised in order to subsidise low-cost flights for passengers.
“Given that the majority of fresh produce is airfreighted in the bellyhold of passenger planes, this move could see innovative and efficient businesses being penalised unfairly, with little effect in terms of reducing the environmental impact from air transport.”
This move was first discussed under the previous government but a consultation that concluded in November 2008 found that the disruption to the airfreight trade was not viable and an international approach was needed to dictate the cutting of emissions.
This time around, the industry is still questioning what the impact of these proposals would mean for trade and whether the reasons for the change add up.
Mike Parr from Perishable Movements Ltd insists that “this is just another tax and a way of obtaining revenue” for the new government. “We are meant to be encouraging the consumption of fresh produce, not making it unavailable to those who cannot afford it,” he says.
The potential impact is difficult to assess because proposals for how the tax will be calculated and who pays for it are yet to be finalised.
Simon Derrick from importer Blue Skies stresses that policy-makers should look at the bigger picture for fresh produce arrivals into the UK. “If it is going to have an impact on freight, then we would like to see an exemption for fresh produce as the vast majority of fresh produce imports come from developing countries and such a tax would be a barrier to a trade, which brings significant social and economic benefits to these countries,” he says. “There is no room for additional costs in today’s competitive retail climate.Much of the freight business will simply relocate to continental Europe, where there are no such taxes.”
Myers agrees that “the result of this could be damaging to the economy at the worst possible time”.
A step forward
One area in which the sector has made gains is in the concept of “food miles”, which is gradually being recognised as more complex than it has been considered in the past. A number of studies have indicated that the environmental impact is not necessarily linked to distance. At the same time, the economic and social implications of trade are increasingly being brought into the arguments.
Now, it is a case of presenting these findings to the public in an accessible way. Many believe that consumers must be made to understand the whole supply chain, not just part of it.
“The public perception of airfreight is a challenge,” says Derrick. “There is an assumption that all forms of airfreighted food are unacceptable because of their perceived high carbon footprint. However, the full ecological footprint of a product depends on many factors including the social and economic impacts brought to the country of origin. A lot of imported fresh produce brings substantial benefit to developing countries and much of it travels on passenger aircraft that would still fly whether it has cargo or not.
“Recent successful campaigns to overturn the proposed ban by the Soil Association of airfreighted product have gone some way to highlight the argument that one has to look at the whole supply chain rather than just parts of it.
“Consumers need more information about the provenance of food so that people can make up their own minds about sustainability,” he continues. “An ethical purchase should not just be about how a product is transported, but should also be about how it was farmed, processed and packed and all the impacts associated with this.
“If you just stick an airfreight sticker on something, it only tells a very small part of the story… Ultimately, choices should not be made based merely upon perceptions, but based on facts.”
These views are reflected throughout the rest of the industry and together, the major players are keen to be considered as part of the supply chain rather than a focus for criticism.
“Food miles is an outdated and inaccurate concept,” says Jenney, who is campaigning for the carbon footprint measurement of the whole product supply chain to allow consumers to make informed decisions.
“We are one cog in the machine,” Forsyth agrees. “The way we look at it, the UK consumer is pretty well informed. Most understand countries of origin and labelling is pretty clear.
“Labelling product as flown in by air has not caused demand to drop off. There may be a debate about it, but consumer demand has not changed.
“If it isn’t being grown in the open air in Kenya, it’s going to be from a glasshouse in the Netherlands - we have to broaden the debate if we want things like green beans in December.”
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