Transport a huge challenge in delivering flowers undamaged
Demand for flowers and plants is growing significantly in the global market and is expected to grow by 50 per cent over the next decade. The greatest growth potential is in Asia. In the case of China, flower trade valued of 164.2 billion RMB (21 billion euros) in 2016, and it made up about 30 per cent of logistics revenue. The Netherlands, one of the world’s largest flower manufacturers, importers and exporters, is committed to improving the capacity and quality of the cold chain transportation of flowers to meet the growing and diversifying demands of customers.
On 30 October 30, the third edition of the Dutch Smart Logistics Webinar was held. This time the theme was Smart Flower Cold Chain. The webinars are organised by ISEA, the Consul General of the Kingdom of the Netherlands in Chongqing with the support of HIDC and Railfreight.cn. Jeroen van der Hulst, Owner and Founder of FlowerWatch, Brian Jansen, Country Sales Manager of Rhenus Air & Ocean B.V., and Luo Qiao, Head of Cold Transport Midwest Regional Company, SF Express shared their insights on the smart flower supply chain.
The quality of flowers depends not only on how they are grown in farms, but also on how they are transported, which poses a challenge to the efficient operation of the entire supply chain. To face this, FlowerWatch has developed quality standards for the global flower supply chain, providing a tool for maintaining sustainability and efficiency during transport, explains Jeroen.
His company tested 1000’s of bunches over years, 20 per cent of them disappoints. The quality issue could be attributed to misplanting in farms, temperature control problems in the supply chain or a failure to control diversity. The FlowerWatch quality standard therefore provides guidelines for high-quality operations throughout the supply chain, including in farms and off farms. In addition, FlowerWatch also made a big improvement in cooling by using vacuum cooling technology, an innovation that allows flowers to be cooled from 25 degrees to 2 degrees in less than 20 minutes without being disturbed by outside temperature changes.
Follow the market changes
Logistics company Rhenus has also developed its supply chain solutions based on the market’s changing demands of flowers. According to an industry study shared by Brian, consumers in the current flower market have become less predictable and more mixed. He explained: “One moment they want an exclusive plant and the next time they buy an offer at a supermarket. They want to be served at different times with products from different qualities.” This means that the supply chain for flowers needs to become more flexible.
Brian also highlights the important role that airfreight plays in the transport of flowers. He noted: “Although both sea and rail transport are involved in the global supply chain of flowers, air freight is unlikely to be replaced.” Stable control of temperature, efficiency of transportation and experienced operation make airfreight an incomparable transport mode in this industry. He also introduced Rhenus’s Perishables Center, with different areas to meet the different needs of the cargo, simplifying and optimising the complex logistics system.
Rhenus’s Perishables Center
Practices in China
China, with its huge flower consumption potential, is also developing its own model of flower supply. SF Express can be a good example. China’s flowers are mostly planted in Kunming, Yunnan province, and are sold across the country through the cold chain logistics network. Most consumers turned their attention to the quality of flowers rather than cost. They are more and more willing to purchase branded flowers with higher prices, and this spending power is rising year by year.
In addition, flower e-commerce is developing rapidly, with a turnover of 12.4 billion RMB (1.59 billion euros) last year. This is expected to exceed 20 billion RMB (2.56 billion euros) this year. In this trend, flower providers are apt to develop to a large and extensive scale. Small and medium-sized companies merge while large enterprises tend to transform their business models. The B2B trading model is widely welcomed. In the past, the flower trade path was: planting base – wholesaler – florist, but now flower growers prefer to skip trades with wholesalers and sell flowers directly to florists by using efficient cold chains.
Solution panorama of SF Express
The logistics bottleneck
However, logistics is the bottleneck in the flower industry. About 30 per cent or more used to be damaged during air freight. The industry expects a public, integrated, and high-standard logistics platform to provide the entire cold chain service. Based on this, SF Express started its new business in the flower supply chain. Luo Qiao shared its storage-transit-storage-distribution model in flower logistics that is currently practiced by SF Express. The first is for small and medium-sized planting end enterprises and e-commerce customers. Scattered goods in small amounts are collected to form refrigerated stock in the main line. The goods will be shipped to the market operation center and then distributed to the terminal consumers.
Compared to the first model, the second model for large growers and e-commerce customers eliminates the need for centralised shipments and allows flowers to be transported and stored directly to the market operation center via refrigerated stock in the main line, where they can be delivered to the terminal customers within 12 hours. This model is used by some large Dutch flower providers. The third model is aimed at wholesalers, professional markets and e-commerce customers. In the context of the dismantling of flower markets, the flower goods of these companies are temporarily stored in the market operation centres in order to reduce the cost of building their own warehouses. These logistics solutions are based on the analysis of segmented market demands, which are promising to boost SF’s cold chain business.
The article was authored by Huilin Shi from our sister publication railfreight.cn