Kuehne + Nagel is a freight forwarder that takes perishables logistics seriously, with around a quarter of its global air freight volumes coming from perishables traffic. In some markets, the proportion is even higher, with perhaps 60% of the company’s air freight shipments at Amsterdam Schiphol made up of perishables. It makes perfect sense, therefore, that the company’s global director for perishables logistics, Dennis Verkooy, is also director for air logistics in the Netherlands.
So, just how well is the airport cargo environment currently serving the needs of perishables customers? Naturally, this varies according to a number of factors including the airport or country in question, the airline, cargo handler, and regulatory factors – particularly related to the attitude taken by the national or local customs authorities and food, drug and veterinary administrations.
But Verkooy believes that the overriding factor is having a good handling agent at the airport.
“You can get the most highly sophisticated airport, but if you don’t have a handling agent that takes care of your cargo, you can still run into problems,” he says. “The airline might have invested in a cold store, but you can still find your shipment sitting outside, next to it. So you depend upon having an agent to act as your eyes and ears locally, to take care of your shipments.”
Kuehne + Nagel has its own trained specialists at around 100 stations worldwide, and at Amsterdam Schiphol Airport has a 5,000 sqm dedicated cold store with direct airside access attached to the Menzies warehouse, complete with vacuum coolers and phyto-inspection areas – the only facility in the Kuehne + Nagel perishable network where the company has its own tarmac location. Under this arrangement, cargo can be loaded from an aircraft and be inside this temperature-controlled facility within 30 minutes.
“This business is all about speed and to make sure that you maintain your cool chain,” says Verkooy. “If you do that, you can get the product to your client more quickly and it has a longer shelf-life, providing a better chance of it being sold and less chance of waste.”
So, how might the situation arise where the shipment is not taken care of properly? Verkooy says it can be due to a number of factors, including lack of training and awareness among handling staff, lack of interest, and sometimes a sense that perishables are relatively low-value products and therefore unimportant. Generalised assumptions are also sometimes made about products’ needs, and specific instructions are ignored.
Verkooy says several factors determine which airline or airport he routes shipments through. “There are certain airlines that traditionally have a focus on perishable cargo and take the product seriously, offering things like track and trace and really investing in this kind of cargo, giving a it priority and good service. Our customers may say they only want to fly with a certain airline, because they know that 90% of the time it will arrive in good condition,” he explains.
Certain airports are also preferred over others because of a history and reputation for quick and efficient treatment by the local regulatory authorities. For example, Detroit is seen as a very difficult airport for some perishables because of inflexible treatment from its Food and Drug Administration, including authorities that are only available from Monday to Friday from 9 to 5. In contrast, the flexibility and 24/7 availability of the FDA at JFK make it an efficient and popular choice – although it helps that Kuehne + Nagel has its own cooling facility there.
Flight schedules and arrival times are also important. For example, in the US “everybody wants to arrive as early as possible, because they don’t want to pay for overtime for the USDA or customs”, says Verkooy. “But in the Middle East, we want to arrive at night, because otherwise it becomes very difficult to protect the product. So it depends where you are moving to.”
So, what improvements would he like to see in the airport cargo-handling environment? Basically, greater speed…
“If we have to wait four, five, or six hours to get a shipment out, that is not so good,” says Verkooy. This can happen for multiple reasons. For example, the GHA or airline is simply being slow to find the shipment; or they cannot release it due to customs or FDA issues; or there is no notification provided to the forwarder by the airline or handler to pick up the shipment.
“The quicker we can receive the cargo, the better it is for us,” Verkooy explains. “This is where I think there is some improvement possible.”
This takes us back to the situation in Amsterdam, where “30 minutes after landing, ULDs are rolling into our warehouse”, says Verkooy. This unique arrangement that has been in place since 2011 after the company was able to purchase a “local hero” handling agent.
He says the efficiency and time improvements are tremendous. “And it is a great selling tool to our customers.” Although he would like to have this option at other stations, this is difficult because forwarders are not allowed airside access at most major airports.
But can he forsee it happening in the future?
“It is not something that we are actively pushing, and our priority is to continue to build up and fine-tune our network,” he says. “But if something came along that offered an opportunity, then of course we would be interested.
An Indian perspective
India’s role as a leading manufacturing centre for pharmaceutical products has contributed to an exponential increase in the transport of these products by air, while the ever-increasing population of overseas-domiciled or ‘non-resident Indians’ – NRIs as they are termed – continues to contribute to the growing volumes of Indian horticultural and other perishable products shipped by air, including fruit and vegetables, fish and spices, according to Willy Ko, CEO of AISATS, Air India’s joint-venture handling company with SATS of Singapore.
Recent investments in new handling facilities in India have included areas and terminals specifically designed to handle cool-chain cargo, such as Cargo Service Center (CSC) India’s Perishable Cargo Terminal at Mumbai Airport and the Perishable Cargo Zone located within CSC’s Cargo Terminal 2 at Delhi Airport.
Ko says in India there is “room for improvement in the cold storage capacities at airports”. However, AISATS’ Bangalore terminal is well equipped for cool-chain traffic, housing three cold-room facilities with different temperature variations to cater to different products. It also has a ‘Refrigerated Q-Lane’ (a temperature-controlled room for built ULDs) and a cold room reserved only for domestic cargo.
Ko says AISATS Bangalore handled about 8% of the total perishable cargo across all Indian airports. This amounts to approximately a fifth of the total cargo handled at AISATS Bangalore. With the anticipated growth in international trade of perishable goods, AISATS plans to invest in another Refrigerated Q-Lane and a dedicated Perishable Handling Centre, “and is already in talks with the regulatory authorities for requisite permissions for the latter”.
Ko points out that it is not only appropriate infrastructure that is essential to enhance cool-chain processes at airports; regulatory policy is also important, as are the appropriate processes and guidelines. “In April 2013, the Revenue Department instructed customs officials to accord ‘speedy clearance’ to perishable agro items,” he observes. “While these developments showcase the regulatory authorities’ support for the industry, cool chain facilities including warehouses equipped with temperature-controlled systems and transportation processes would further enhance an industry that is still at a nascent stage in the country. There is also a need for comprehensive guidelines for minimum infrastructure requirements at airports for handling such shipments.”