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If the world is eating more seafood, how come air cargo isn't seeing a corresponding benefit?
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Tipping the Scales

If the world is eating more seafood, how come
air cargo isn't seeing a corresponding benefit?

There is general consensus consumers are eating more seafood, believing it to be a healthier option over bovine treats. There is also the preference of fresh over frozen seafood.

So why isn't air freight seeing noticeable growth in fish and seafood shipments? Statistics from Netherlands-based consultants YDL Group, which follows perishables transport, show static shipping of seafood, or even a slight decline in several segments of the seafood air trade.

Air imports of fish to North America rose steadily from around 80,000 tonnes a year in 1994 to 220,000 tonnes in 2003, but have since dropped to 200,000 tonnes annually. Similarly, in Europe, fish imports by air peaked at 130,000 tonnes in 2001, and then dropped to 100,000 tonnes in 2005.

Imports of fish to Asia also showed a "slow but steady decrease" says YDL Consultant Marco Bloemen, dropping from 160,000 tonnes in 2000 to 135,000 tonnes in 2005. Imports to Asia of shellfish and crustaceans are also down from a peak of 76,000 tonnes in 2000 to 65,000 tonnes in 2005.

The growth in the 1990s was the result of a fortuitous and complementary stream of events in seafood trade and in the air freight industry. A growing campaign across the developed world for healthier diets came along with growing industrialization of seafood business - including the development of what the trade calls aquaculture and is more commonly called fish farming - that features a strong use of scheduled, predictable air transport.

Diners around the world were ordering more seafood, in other words, because they could.

Finding the reasons for the recent decline, and strategies for a potential recovery, means going into more murky waters.

YDL's Bloemen sees several trends behind seafood's diminished scale.

For instance, European fish imports are down mainly due to less Hake being imported by Spain, by far the most voracious per capita consumers of fish on the continent.

In Asia, a fall in tuna imports to Japan accounts for most of the drop in Asian fish imports, with salmon, the other popular product, holding steady. Japan imports more fish than any other Asian country.

The fall in seafood shipments to Asia covers a wide range of fish types, extending to both air and sea movements and intra-Asia as well as long haul movements.

"Japan halved imports from 19,600 tonnes to 10,000 tonnes between 2000 and 2005, and Hong Kong went down from 31,000 tonnes to 23,000 tonnes in the same period," Bloemen says. "I really don't know why; maybe they are eating less."

In Spain, the hake example shows just how slippery fish trends can be.

Cargolux says falling fish volume was part of the reason it cut one of its two weekly freighter flights out of Chile. The high price of fuel and more reliable flower shipments out of Ecuador and Colombia also were a factor, said Sebastiaan Scholte, head of marketing and special projects for Cargolux.

"Hake out of Chile is seasonal, and it has to be trucked all the way up from Puerto Mont in the South. If there are problems on route, you can end up with an empty flight," says Scholte. "Flowers are less seasonal and the ups and downs are a lot less than for fish."

Ricardo Gonzalez, managing director of VIAS, the business development arm of Vitoria International Airport, the Spanish airport specializing in perishables, which used to be a stop for Cargolux freighters, believes the main problem is competition from belly hold capacity.

"I don't think there has been a decline in hake imports overall: more of it is just coming on belly hold flights to Central Europe, where shippers can get better rates and from where it is being trucked to Spain," he says.

Gonzalez found the same problem when he tried to get freighter operators to fly from East Africa to Vitoria with Nile perch. Belly hold capacity from Nairobi proved more attractive instead, he says. Shippers' insistence at keeping transport costs down means that fish is even trucked - via a ferry link, of course - from Iceland to Spain.

Another reason for the fall in air imports of hake might be a switch in sourcing to Namibia and South Africa, or perhaps even declining fish stocks.

"I've heard that it's getting harder to fish hake in Chile, because the fish are going further south towards the Antarctic," says Bloemen. "Our figures definitely show a slight decrease in hake imports to Western Europe in general, and while flows from Africa are volatile, they are not making up for the drop from Chile."

Roberto Rodriguez, managing director of Pescafresca, the fresh fish division of Pescanova, Spain's largest fishing and fish retail company, says there is no drop in demand for hake in Spain. He says hake quotas for Spanish fishing fleets are going down 8 to 10 percent annually as the European Union tightens up on over-fishing, suggesting that more air freighted supplies would be needed to make up the difference.

But Rodriguez also says the stagnant air trade in the business is in part least the result of a lack of airline interest in the cargo. Seafood is, after all, a highly perishable commodity even compared to other perishables and the delicate handling is a relatively high-risk venture. "Fish is competing with other perishables and fish is smelly. So airlines prefer not to transport it if they can get other cargo," he says.

Rodriguez predicts demand for fresh fish will increase. Recent food scares in Europe, which are prompting increased sanitary and health checks on imports, will benefit air freight providers because they can get fresh fish to market sooner.

"The rise of the euro against the dollar is helping, as it offsets the effect of higher fuel prices," he says.

Some players believe sea freight also is eating into air freight business. Christian Helms, chief executive officer of German-based Cool Chain Group, a perishable logistics company, notes more salmon is being frozen and moved in ocean containers.

"Maersk containers can now go down to minus 60 degrees and that is a very stable environment that fish need," he says. "If you look at the labels of fresh fish on the retail shelf, it often says 'previously frozen' in the small print. If the fish is frozen really soon after catching it, this means it is fresher than fresh fish, which could be 11 days old by the time it gets to the consumer."

Bloemen hears the same tune regarding the Nile perch caught in Lake Victoria in East Africa. "If they freeze it and send it by sea, rather than flying it fresh, the quality is kept," he says.

Helms sees this as part of an inevitable trend across the perishables shipping business.

"A lot of fresh beef used to be flown from Argentina, but now most of it is transported frozen," he says. "And Kiwi fruit used to be flown from New Zealand, then for 10 years or so came by ship, and now they are grown in Italy."

Aquaculture is an area that is growing as a share of fish sold.

At Pescafresca, Rodriguez says only 10 percent of fish was farmed 25 years ago. Two years ago, it was 25 percent. For 2006, a third of all fish shipped was farm raised. In 10 years, it could be as high as 45 percent.

What effect this change will have on air freight flows is not clear. Whether, like the Kiwi fruit, producers will be able to farm fish closer to their markets remains to be seen.

"You can't cultivate a particular fish just anywhere; they need specific conditions," says Rodriguez. "But this is still a very young science and in the next 20 to 40 years we will doubtless see spectacular changes."

Meanwhile, farmed fish are replacing wild supplies from the same source. Such is the case with Chilean, Norwegian and Scottish salmon. Even lobsters, the biggest seafood export from North America, according to YDL, with exports of 12,000 tonnes a year out of a total export market of 17,000 tonnes, are now semi-farmed, with young lobsters caught and then reared in tanks.

Sadly, for the Spanish, attempts to farm their beloved hake have not been successful so far. But in other cases, farmed fish are creating new air freight flows. Helms says tilapia is increasingly popular in Europe.

"It is all farmed, says Rodriguez, in Ecuador, Vietnam and Costa Rica - countries that are not traditional fish producers."

One consideration over the growth of the fish trade in general is environmental. The Dutch fisheries department and the World Wildlife Fund distributes a leaflet telling consumers which fish come from sustainable stocks and which do not.

Atlantic halibut, cod, red snapper and North Sea turbot are all on a "red list" of fish whose stocks are in severe danger, while an intermediate orange list includes Nile perch, Skipjack tuna, and even tilapia farmed outside Europe. Jason Holland, editor of U.K.-based magazine Seafood International notes protestors from environmental action group Greenpeace demonstrated outside U.K. supermarkets recently, trying to get consumers to switch their purchasing to sustainable stocks.

Rodriguez thinks a coming trend for fresh fish that could have an impact on air freight providers may be greater use of branding. "Frozen fish has brands, but not fresh," he says. "I think we will start to see more information about where the fish came from, which will allow consumers to decide if they want to buy it."

If concern about the distance food has been transported joins concern about fish stocks, then such information could see a reaction by consumers, at least in mature markets such as Europe, against air-freighted fish.

On the positive side, Rodriguez believes there is a widespread realization that fish stocks need to be managed in a sustainable way.

"We believe that most governments are very professional, have a lot of information and are making reasonable decisions about the long term," he says. "For example, I think we are very close to aligning quotas for hake catches to available stocks."

The processing of products in countries with cheap labor, which is then flown to markets in developed countries, is another trend Rodriguez sees.

He cites tuna, for which Spanish summer catches in the Mediterranean Sea are declining, is leading to imports from such unlikely places as Iran, Yemen and various Red Sea countries.

Rather than move the whole fish, Pescafresca is increasingly processing them into fillets at source, using local labor, then flying them to Spain already packaged. "Labor costs are not just cheaper, but people in these countries are more productive," he says. "Instead of flying the whole tuna, we are only flying part of it, which is much more economical.

"We have done this with frozen products for 10 or 20 years, but with fresh products it is a new trend, and one I think will grow in the future.

 
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