Presentacin de PowerPoint

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The Colombian flower industry and supply-chain
practices
IX AIR CARGO AMERICAS November 7-9, 2007
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Content

• Flower industry
• Supply-chain practices farm to customers
• Asocolflores and logistics
• Next steps

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Content

• Flower industry
• Supply-chain practices farm to customers
• Asocolflores and logistics
• Next steps

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World flower exports 2006
Ecuador 6
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Per capita consumption

• AIPH, 2007 (Euros)
• Country Per cap. Country
  Per cap.
• Switzerland 80 Slovenia 3
• Norway 59 Italy 23
• Holland 55 Spain 22
• Japan 54 USA 21
• Austria 45 Portugal 16
• Denmark 44 Greece 16
• UK 44 Hungary 15
• Sweden 38 Chec Republic 10
• Germany 36 Poland 8
• Ireland 35 Slovaquia 7
• Finland 34 Croacia 7
• France 31 Russia 3
• Belgium 30 China 1

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Flower market trends in U.S.A

• Size of the floriculture industry US19.4
  billion (US Department of Commerce U.S.A)
• Over the last ten years, the supermarket share
  has grown from 41 to 52, while the florist
  shops have lost market share falling to 32 to
  20.
• Specialty-cut flowers increased their share in
  sales to US homes.
• Ten years ago, half the sales of ornamental
  products in supermarkets were flowers, today they
  represent two thirds.
• Fresh-cut flowers make up 75 of the transactions
  in florist shops.
• Internet sales of flowers held its participation
  at between 5 and 6 of the number of
  transactions.
• Ipsos/AFE Consumer Tracking Study, 2005

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The Colombian flower industry

• 182,184 jobs (98,641 direct / 83,533 indirect)
• 1,000,000 Colombians depend on floriculture
• Exports 2007 US967 million
• 7,266 hectares
• 60 of the workforce are women
• 95 of total production is exported
• Colombia is
• the first supplier of flowers to the United
  States
• the first supplier of carnations worldwide
• the second largest flower exporter in the world.
• Largest non-traditional agricultural export (10)
• 75 of air cargo exported from Colombia in the
  last 10 year were flowers

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Colombian flower exports
1.000
900
200
800
700
150
600
Thousand tons
500
Millions dollars
100
400
300
50
200
100
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1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
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1994
1995
1996
1997
1998
1999
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2002
2003
2004
2005
2006
Thousand tons
Million dollars
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Exports by market
10
Exports by product
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Area
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Regions
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Share of the U.S. import market

• 77 of flowers imported by the USA are Colombian
• 98 of Alstroemerias
• 97 of Carnations
• 82 of Chrysanthemums and Pompoms
• 67 of Roses
• 35 of other types of flowers
• Source USDA, 2006

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Bouquet exports to U.S.A.
76.8 comes from Colombia
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Comparative advantages

• Supply of labour
• Soil quality
• Abundance of water
• Luminosity
• Proximity to main markets
• Cluster conditions
• Importers of plant material and agro-chemical
  products located in Bogotá
• Closeness to Eldorado and Rionegro airports
• Main research centers located near Bogotá

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Contents

• Flower industry
• Supply-chain practices farm to customers
• Asocolflores and logistics
• Next steps

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Supply-chain Practices

• This is not a new issue, but a common factor for
  anyone in the market
• This is used to respond effectively to world
  competition
• Competition is stiffer because of technology,
  globalization, market saturation, lower
  productions costs, etc.
• The objective is that customers receive the
  product with the required quality and on time,
  always adding value

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Logistics and competitiveness

• The Netherlands is the European perishables hub
  and the first flower exporter worldwide Kenya
  has been doing sea shipments to The Netherlands,
  and is their first supplier Ecuador is
  reevaluating the process of cargo consolidation
  the Mexican flower industry has been stimulated
  with subsidies and has the opportunity of
  sending flowers overland by truck
• World maritime shipments, including Colombia,
  have grown significantly in the last years
• Supermarkets require more efficiency in shipping
  and traceability
• We still have reports of problems with the cold
  chain, as it is currently managed in the US
• Air tariffs are still 30 of the cost of flowers
  CIF

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Flower Exporting by air

• Airport El Dorado most important airport in
  Latin America because flowers exports
• Flowers 223,000 tons per year
• Bogotá 79 cultivated area
• Rionegro 17 cultivated area
• Daily 709 tons on average. During Saint
  Valentines there were close to 1,500,000 boxes,
  or 111,000 boxes daily, and 816 pallets

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El Dorado and Rionegro facilities

• 30.600 m2 11.000 m2 in the international cargo
  areas
• In Bogotá
• 37 for flowers flowers
• 50 are cold rooms
• 212,000 per year only in 5,660 m2
• 37 ton/m2 per year
• 2035 boxes m2/year
• 2 kgs m2/day
• Four years ago, delays were up to 13 hours, today
  with logistic coordination they have been reduced
  to 2.5 hours

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The industry handles around 60,000 boxes/day,
one by one there is room for improvements
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The flower export process
Yes
The product
To the airport
Planning a load
Move into the cold room
Posthaverst Planning
In the cold room
Load a truck
No

• Coordination with brokers, airlines,
  merchandising areas.
• Define type of truck
• Planning the cargo according to destination
• End of the load
• Flights
• Real Weight / volume

Verification of temperature, Security Schedule
of load
Cargo identification Preparation of the
load Analyses truck-airline
Temperature verification
Transport to other farms
If the truck is going to another farm, procedures
for loading the truck must be followed
A
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The flower export process
The product
Cargo to the consolidators agencies or airlines
Cargo consolidation Pallets configuration
Time and temperature verification
Airplane loading plan
Storage to weigh pallets
Verification of temperatures in cold room. Limits
to have this cargo in storage
Verification of the temperature in load conditions
Verification of time
Weight-Balance
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The flower export process
With the cargo agency
Final AWB. AWB with of pieces and weights
Inform the farm of the AWB assigned
Gives the AWB and cargo requirements to the
airline
Farm prepares the boxes
Verification of arriving farm trucks
Pre-alerts destination and Track Trace
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The flower export process
Cargo agency and airline
Security warnings
Confirmation of projections
Projections for next week
Confirmation of quota
Program itineraries vs capacity
Allocation of flight and arrival slot
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The flower export process
At destination
CBP (antiterrorism and plant health
inspections) (separate sample, prepare listing,
call inspector)
Pre-alert Flight
Unload
Pick up order
AMS documents and customs manifest
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The costumers
They are increasingly more powerful.
They reject based on quality and tardiness and
demand social and environmental standards.

• Customers requirements
• Colour
• Size
• Freshness
• Sturdiness
• Shape
• Free of residues
• Free of agrochemicals
• Free of pests

• Price
• Brand
• Destination

• And they want to be sure of
• Sustainability
• Environmental standards
• Social standards

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Quality is a pillar for creating value and
customer satisfaction The exporter or importer
usually end up paying for the inefficiency of the
chain
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Logistic practices
To get quality requires

• Effective coordination of the chain
• Coordinated cargo and document flow

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We can improve if

• The chain can respond effectively to
• cold chain management...
• many box sizes
• coming from many farms...
• going to many clients...
• asking for special packing, standards and
  varieties
• In a sample of over 200 firms, the critical
  logistic delays occur mostly during loading and
  unloading

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Contents

• Flower industry
• Supply-chain practices farm to customers
• Asocolflores and logistics
• Next steps

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Asocolflores in Logistics

• The Asocolflores Logistic Committee has worked
  towards better document and physical cargo
  procedures in Colombia and foreign markets.
• We are part of the WFFSAs Logistics Coalition
  (cold chain, packing, GTIN project)
• 52 farms have been trained in Logistics
  Management
• Asocolflores actively participated in
  establishing the procedures for the bids for the
  airports of Eldorado (Bogotá) and Jose María
  Cordova (Rionegro)
• We provide simulation models to optimize
  procedures in transportation and management of
  cargo at the airport
• We offer timely information about new
  legislation, procedures and its implementation to
  our affiliated companies

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Logistics
During high seasons, we coordinate with cargo
agencies, airlines, governments and
concessionaries so as to ensure better attention
to the supply of flowers
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Logistics
Postharvest Best Practices Manual (includes
logistics topics such as traceability)
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Asocolflores

• Non-intrusive inspections (DIAN)
• Protocol for narcotic inspections
• BASC - CTPAT
• Aeronautic issues (open skies, IATA CASS)
• Colombian custom and exports procedures MUISCA,
  Plan Vallejo, VUCE, certificates of origin
• International customs and requirements

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Contents

• Flower industry
• Supply-chain practices farm to customers
• Asocolflores and logistics
• Next steps chain

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1. Operational improvements
Efficiency between LTO and ATO contact Consolidati
on area Unified security process
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2. Protocol for Cold Chain
Management throughout the chain

• With the national and international LTO and ATO
• Verification of temperature at critical points of
  the chain
• Data-bases and feedback

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3. Packing

• On the farm, LTO, ATO
• Protocol of consolidation, palletization and
  deconsolidation processes
• Indicators

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4. Increase efficiency
In recepction of palleted boxes

• ConsoIidation
• Non intrusive inspections
• Cargo through-put

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5. Register indicators
Management and processes

• Ex. Delays, load time, consolidation time

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6. Enforce security standards

• Certification of members of the floriculture
  chain (farm, LTO, ATO, cargo agency, broker)

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7. Fullfill international requirements
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Sustainable floriculture with social
responsibilityThank you