Air Cargo Vital In California Agri Exports

     Companies that may be searching for new markets might begin with reading an excellent study created by the Center For Agricultural Business at California State University at Fresno .
     The 200 plus page document makes a strong case and allows both air cargo shippers and planners to get a handle on both the current market and what lies ahead.
     One point made right away is that California agricultural export is growing, and somewhat ignored by the air cargo business at large.
     “Airborne agricultural export trade totaled $659.4 million in 2004, a 22 percent increase over the preceding year and a 42 percent increase over 2002,” the study says.
     “Although airborne shipments currently represent just over six percent of California’s $10.4 billion agricultural export trade, several highly perishable, high value-added specialty crops, most notably fresh cherries, strawberries, asparagus and organically raised fruits and vegetables have become acutely dependent on air transport to reach overseas markets,” the report continues.
     “A much wider variety of fresh produce is also exported by air, particularly by those seeking to capture the premium prices that are generally prevalent only during that relatively brief period before more abundant supplies reach these markets via slower modes of transport,” the report says.
     “California’s agricultural export trade grew by 40 percent between 1996 and 2004, while its airborne agricultural exports rose by 67 percent.
     “Air transport will likely become an increasingly attractive alternative to ocean shipping for California agricultural exporters, especially with respect to those economies with which the U.S. runs substantial merchandise trade deficits.
     “In particular, shipping rates for airborne cargoes on westbound transpacific routes should become even more competitive as air carriers add cargo capacity to serve a burgeoning eastbound trade in U.S. imports from the Far East.
     “Even though their near-monopoly over international air transport in California will gradually diminish, Los Angeles International Airport (LAX) and San Francisco International Airport (SFO) will continue to be California’s primary international gateways for air cargo, including agricultural shipments.”
     After having interviewed the management of firms’ air exporting California agricultural products, some conclusions bear additional interest.
     All of the high value specialty crop packer-shippers interviewed in this study deal with seasonal crops. These air freight shipments start about mid-February with asparagus.
     The season for all air freight shipments concluded about June 30.
     The present air freight produce shipment period is about 4.5 months long.
     Surveyed shippers reported marketing shipments to 13 different countries with most destinations in the Pacific Rim (Japan, Korea, Taiwan, Singapore, Malaysia, Hong Kong, and Australia).
     But several shippers made shipments to the United Kingdom, Switzerland, Germany, Mexico, Honduras, and Guatemala.
     The survey found that air cargo costs vary by destination and other factors.
     “For all products included in the survey, the air freight costs ranged from $.80 to $2.02 per kilogram. “Highest freight costs were reported for cherries and the lowest freight costs were for asparagus.”
     Generally speaking, the packer-shipper had the responsibility to get a shipment to the airport in sufficient time to be put in a cargo container and to clear security checks.
     Freight forwarders played a very important role for all products included in the study.
     Essentially, freight forwarders handled the shipment at the airport to the destination.
     All sales made by these packer-shippers were F.O.B. at the packing house.
     “While forwarders are concerned about transportation costs, real responsibility is to make the air freight deadlines.
     “In many cases the foreign buyers came to the packing facility to make the purchase.
     "And,” the survey noted, “some foreign buyers frequently check the packing operations.”
     The report also contains airport-by-airport facts and figures useful in any aspect of the air cargo business.
     Maybe best of all, this work can be easily downloaded@ http://www.cati.csufresno.edu.
(Geoffrey)