The airfreight industry enables the speediest of world trade, with goods crossing time zones and travelling between continents. British Airways World Cargo is well placed to meet the challenges and opportunities this presents, with perishable goods including fresh produce and flowers accounting for over 20 per cent of its handled freight tonnage.
In 2004, BAWC handled more than 115,000 tonnes of perishable goods, of which 80,000t passed through its 69,000sqft Heathrow Perishable Handling Centre (PHC).
It is predicted that the airfreight market for perishable goods, including non-horticultural products such as pharmaceuticals, will grow by 7.8 per cent a year over the next five years and BAWC is extending its capacity at Heathrow to 140,000t a year to handle the expected additional volumes.
The centre is managed by Christian Salvesen, BA’s partner in the venture, and its overriding objective is to preserve the quality and freshness of imported produce on its way to supermarkets and other outlets. The provision of temperature controlled conditions to maximise shelf life by reducing dwell time, and work along the supply chain to significantly reduce handling costs, were key to the winning of the Re:fresh award.
The ability to combine the global network of British Airways with local knowledge to enhance the competitiveness of customers’ products in the UK marketplace has been recognised as paramount.
As part of a commitment to achieve this, three weeks ago, BAWC launched its new global perishables product, Constant Fresh, as part of a £1 million investment in its perishables handling service at Heathrow.
The new product is available right across the BAWC route network, and offers customers a clearly defined proposition to ensure the freshness of perishable products including fruit, vegetables and flowers as they move down the chain from supplier to retailer.
Procedures relating to acceptance and handling of perishable goods at all points have been reviewed and strengthened to ensure total integrity of the supply chain. The investment at Heathrow will see new hoists installed to increase capacity and drive greater efficiencies through the handling process. The work will be completed by July and follows a £130,000 outlay in a new production line that is capable of processing up to 8m punnets of soft fruit a year for KG Fruits and Driscolls.
Gerry Mundy, BAWC’s global perishables manager, says the development of the centre demonstrates the company’s commitment to the fresh produce and flower sectors: “We have established a strong customer proposition in recent years, working with all key partners in the supply chain.
“[Constant Fresh] will enable us to build on these solid foundations. We offer the most comprehensive, specialised service to customers at Heathrow, which has been developed through listening to our customers and their needs. By working closely with our partners, we play a crucial role in the management and supply chain so that we can deliver the product and further value added service enhancements,” he says.
The extension of capacity will enable BAWC and Christian Salvesen to benefit from the extra volume business that is on offer. “Historically we have had to cap our volumes at peak trading times,” says Matt George, manager of Temperature Controlled Services and the PHC for Christian Salvesen. “We didn’t want to be in that position again.”
The logistics chain is anything but simple, and BAWC handles fresh produce from other airlines as well as BA. This makes harmonisation of standards difficult, but not unattainable, according to Mundy. “We have a benchmarked standard of handling perishables and we’re working to ensure that this is carried through all of our stations that handle fresh produce for the UK.”
Andrew Southey, BAWC global products manager, adds: “We have reviewed the end to end process and carried out a world-wide audit of our facilities to ensure the consistency of the global delivery of the service we can now offer. We didn’t want to launch Constant Fresh until we were absolutely confident that we could offer it on a global basis.”
Mundy emphasises that nobody can afford to get things wrong in the fresh produce industry. “It is not just a question of handling the products in the right way, as we are working with very time-sensitive products,” says Mundy. “Most of the products that come through this facility are shelf-ready - cut, trimmed, packed and sometimes labelled and have six or less days shelf life, [sometimes as little as four days].”
Recognition that growers are under increasing cost pressures is equally crucial to the BAWC ethos, even if it takes away some revenue-earning opportunities, says George. “We have been working at source with many of the companies that use our services to enable them to perform many of the value added services we can perform here before airfreighting the product. In order to drive costs out of the chain as much as possible, we have looked closely at not only our own but other businesses. More and more of the process is going back to source and we believe that’s the way it has to go. We have tackled our key problem areas at airports overseas too and it is the result of these efforts that enabled us to win the Re:fresh award last year.”
That the through-lane system already in place can transfer incoming produce from the forwarder at Heathrow on roller-beds through chilled facilities and the PHC within 90 minutes in many cases is, says Mundy, “a service that cannot be matched by anyone on the airport”.
He adds: “We have undoubtedly won business as a direct result of that part of our service alone. The fact that we work on a day-one for day-one basis for any customer that requires that and all product will leave the centre for delivery to regional distribution centres throughout the UK on the day it arrives is another major advantage.
“We recognise that airfreight is generally a distress purchase. If you look at the market as a whole, there is no desire for excessive inventory and stocks. But we are seeing some bulk goods that might have been sent by air in the past going on ocean freight as technology improves and shelf life is extended. But we certainly don’t foresee a downturn in airfreighted volumes into the UK.”
The PHC is just one integral part of the BAWC Heathrow facilities. “At the heart of our global network is Ascentis, our cargo handling facility, which has the capacity to handle 800,000t of cargo a year - with in-built potential to handle a total of 1mt a year,” says Mundy. “We deliver consistently high operational performance, driven by leading edge technology and the commitment of 2,500 people across our network.”
British Airways is one of the top 10 leading cargo airlines in the world and transports nearly 90m kilogrammes of freight, mail and courier traffic each year. It aims to offer its customers consistent service around the globe using perhaps its greatest strength - the British Airways network, spanning nearly 200 destinations in over 80 countries.
Additionally, BAWC operates a scheduled freighter service that provides customers with additional capacity and serves 40 key destinations worldwide, from a number of destinations across Europe to destinations further afield such as Hong Kong, Tokyo, Atlanta, Johannesburg and Shanghai. Some 85 per cent of the group’s cargo revenue is earned outside the UK, across a hugely diverse range of industries.
The expanse of its network of freighters increases flight frequency to key destinations, but also gives BAWC the ability to cater for large or unusual airfreight requests. For instance, throughput of salad crops for the UK market have risen by four times the weekly volume year-on-year in the last two months at the Heathrow centre.
The 200t more airfreighted Iceberg, mainly from the US, have been handled comfortably by the network, illustrating both flexibility and capacity to react swiftly to supply issues around the world, weather-related or otherwise.
A £30,000 investment in a new handling line for flowers has also seen a significant uplift in the flower throughput at the PHC, which now has the machinery in place to condition stems, cut, bunch, trim and wrap them, on arrival and deliver the flowers prepared and fresh to retailers far more quickly than was previously the case. Again, this has been added with the minimum of fuss.
An extensive road feeder service in key markets and a number of agreements with other airlines means BAWC can connect almost any city that it doesn’t serve directly with the BA and BAWC network.
“As a London based airline, we’re ideally positioned to reach all corners of the globe,” says Mundy. “We transport a range of products all over the world every single day: fresh fruits and vegetables, flowers pharmaceuticals, a vast range of hi-tech products, spare parts for cars, ships and aircraft, textiles, fashion goods and even family pets relocating with their owners. The list is almost endless.”
Mundy has overall responsibility for the PHC at Heathrow. This includes the interface with key importers, forwarders and retailers and the continual drive of profitable growth for the PHC. He also has ownership of the contractor relationship with Christian Salvesen, both at a local level for service levels to the BAWC operations and customers but at head-office level to leverage market support in supply logistics to the major retail players.
The business strategy for the PHC is to deliver greater efficiency to the centre and increase the volume of perishables handled. In the long term, a portfolio of perishable products will be introduced for all perishable sectors, including a premium product focused on the pharmaceutical market.
But in the short to medium term, fruit, veg and flower importers will reap the benefits. “The freight market has moved on dramatically in the five years since we came to this facility,” says Mundy. “There is a much better standard of care from a freight forwarders point of view and the business is gravitating towards the people who can perform to the required level. In the last three years, the UK retailers have got much more heavily involved in the process and that has also pushed the industry forward.
“We have a facility at Heathrow that is unlike any other perishables cargo facility in the world. There is no other that offers the full range of services we have here. We do make a premium, but we offer a premium services and our customers feel they get value for money.
“Our business plan was over 10 years and we are half way through that. We didn’t want to achieve everything immediately, but we have around 1.8m retail trays of produce a year going through the PHC now and this will rise to more than 2.5m cartons once we have expanded,” says Mundy.
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