Perishables a Growing Business for Carriers and Airports

Perishables a Growing Business for Carriers and Airports


The improving global economy has helped grease the wheels of commerce, although a return to the boom years hasn’t quite materialized for some transportation modes and trade lanes, including air cargo. However, the perishables business is an exception.

 

The carriers’ view

Joe Goode, managing director of cargo sales at American Airlines’ (AA) Cargo, acknowledges that, “a lot of the hard freight customers—the non-perishable business—was very soft in 2012.” The few bright spots in air cargo were related to oil and energy, pharmaceuticals and perishables.

While other air cargo business segments have dropped by double digits last year, the perishables segment grew by double digits in 2012 and will likely do the same this year, says Goode.

“There are new markets opening up. We’re handling perishables from America into the Middle East that we didn’t handle before. Although we don’t fly direct, we take it as far as London and hand it off to one of our partners,” he explains. Australia is another hot market for perishables right now, adds Goode.

AA Cargo is also investing in cold chain infrastructure to support its growing perishables business. “Last October, we opened a new cooler facility at one of our largest hubs, DFW (Dallas/Fort Worth),” Goode says. The new facility offers over 1,800 square feet of refrigerated space that is maintained between 36 and 38 degrees Fahrenheit.

In addition, AA Cargo offers its Cool Perishables program at the carrier’s Miami hub. AA Cool Perishables provides pre-cooling, confirmed cooler space, and expedited USDA and customs clearances on site for fresh shipments. The service is unique because the cooler equipment extracts hot air and infuses cool air, explains Goode, “which adds shelf life to the product and is a value-add to our customers.”

Perishable air cargo shipments are worth about $440 million annually to California’s economy, and while that may seem relatively small, it’s an important sector nonetheless—and it’s growing strongly.

Germany’s Lufthansa carries fresh produce on its three times weekly all-cargo flights from Los Angeles (LAX) to Europe and on most daily passenger flights destined for Munich and Frankfurt. Frankfurt airport’s Perishables Center, the largest of its kind in Europe, handles roughly 100,000 tons of perishables goods each year and operates 24/7/365. The 9,000 square meter facility boasts 20 refrigerated storage zones ranging from -24 to +24 Celsius. Aside from fresh fruits and vegetables, the facility also handles meat, fish and crustaceans, flowers and plants, and pharmaceuticals.

Most other international carriers flying out of LAX also carry fresh produce. Combined with nuts, shipments of fresh fruits and vegetables comprise 15 percent of LAX’s air cargo (by weight).

LAX is a major hub in AA Cargo’s network as well, says Goode. “Seventy percent of the volume we handle there is perishables.” The carrier has good connections via wide body service from Los Angeles to Dallas, and a lot of capacity from Dallas to Europe, specifically London, he adds.

Mercury Air Group, the largest perishables handler at LAX, also sees a promising future. In October, Mercury’s subsidiary Apollo Freight announced a partnership with Hellmann Perishable Logistics, a division of Hellmann Worldwide Logistics. The newly formed company, HPL-Apollo, will control a substantial amount of cooler handling operations at both Los Angeles and Miami.

 

The airports’ view

Miami International Airport (MIA) controls the vast majority of air cargo between North America and Latin America and the Caribbean, including perishables, hi-tech goods, telecomm equipment, textiles, pharmaceuticals and industrial machinery.

During 2011, MIA handled nearly 70 percent of all U.S. perishable imports, followed by New York’s JFK (12+ percent) and LAX (8+ percent) accounting for most of the remainder.

Chris Mangos, marketing director for Miami-Dade Aviation Department, understands the importance air cargo plays in an airport’s overall operations.

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