Flower exporters eye ocean freight as air costs rise
The high cost of air transport of horticultural products is now pushing traders to adopt sea freight which is relatively cheaper.
Freighters from Jomo Kenyatta International Airport (JKIA) charge $5.8 per kilo of freight, forcing exporters to look for other alternative means.
The charges, says the Kenya Flower Council’s chief executive, Clement Tulezi, have caused produce from countries like Ethiopia to fetch competitive prices in the global market due to lower freight rates.
For example, Ethiopia charges 2.5 dollars for a kilo of products shipped to the world market, which makes the goods transported by the carrier cheaper in the world market. Sea freight should reduce the cost to at least $2.8 per kilo.
On Monday, the Kenya Flower Council (KFC) and the Embassy of the Kingdom of the Netherlands signed a cooperation framework that is expected to expedite the shift to sea freight for perishables in Kenya.
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Dutch Ambassador Maarten Brouwer and Kenya Flower Council Chairman Richard Fernandes signed the framework during the opening of the International Floriculture Trade Exhibition (IFTEX) at the Oshwal Center in Nairobi.
To achieve this objective, a full-time post of an agro-logistics coordinator, based in the KFC offices, has been developed to work on the initiative.
This cooperation was reinforced during the April 2022 visit to Kenya by the Dutch Minister for International Trade and Development Cooperation, Liesje Schreinemacher.
Together with the Cabinet Secretary for Transport, James Macharia, they signed a Letter of Intent on the common ambition to improve port connectivity through a ‘Cool Logistics Corridor’.
Previously, the Netherlands commissioned a study to better understand the challenges and opportunities of sea freight development in Kenya and the impact on its agro-sector.
“However, it is important to integrate the requirements of the perishable food supply chain into the new infrastructures. For example, Standard Gauge Railway (SGR), ports, container depots as well as carrying out efficient customs clearance procedures for perishable goods leaving Kenya,” the Flower Council said.
The flowers will be transported by refrigerated rail containers to the port of Mombasa for subsequent export to Europe.
“Transporting fresh produce by rail is also better for the environment due to lower carbon emissions compared to road or air transport,” Tulezi said.
Most flowers from Kenya are exported by air freight, which is a faster mode of transport. However, the Covid-19 pandemic has revealed the limitations of using air cargo as many flights have been canceled leading to a drastic reduction in air cargo capacity.
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KFC said on Monday that small flower farms were throwing away 20% of their daily produce for export due to a lack of capacity as big players locked them in through advance bookings on airlines.
According to KFC, cargo capacity at the airport remains low as normal flight operations have yet to resume after disruptions caused by the Covid-19 pandemic in 2020.
The lobby said the export market is currently limited in terms of capacity with available cargo space of 3,500 tonnes against the required 5,000 tonnes per week.
Europe accounts for almost 70 percent of Kenya’s cut flower exports and limited freight capacity makes it difficult for Kenya to serve this market, threatening thousands of jobs.