'cool supply chain the ultimate aim'


CCA AGM 2016

CCA Executive Event - Perishables 

Waste, Quality and Sustainability are just a couple of topics that keep executives in the Cool Chain for Perishables awake at night. The pressure is on and people are not looking for more presentations but for a crisp analysis and in-depth discussions about real live situations to obtain some clear insights. This is exactly what this CCA Executive Event in Barcelona was all about.

We kicked off with a presentation on trends and strategic developments by WorldACD, followed by facilitated discussions in which these and other hot topics were addressed. With a selective group of 20 very experienced people (mostly CCA members but also some guests) who are all dedicated to the challenges of shipping perishables, this became a high-quality workshop.

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Perishable Markets, Modal Shift & Trends - Ken de Wit Hamer, WorldACD



Cool Chain Association (CCA) members met in Barcelona, Spain, in May for round table discussions on the future of the perishables (PER) business. Delegates from all sectors of the supply chain met to debate trends affecting the industry, as well as strategies for CCA members to better collaborate and add value to the supply chain.

“We were pleased to welcome representatives from across the industry to come together and learn from each other,” said Sebastiaan Scholte, CCA Chairman and Chief Executive Officer (CEO), Jan de Rijk Logistics. “The result was an open and frank discussion, which I am confident will help us improve our offering as an industry.”

Members heard a presentation on trends and modal shift in the perishables market from WorldACD’s Ken de Witt Hamer. Ken examined the global air freight PER market, explaining that the industry should keep a close eye on changing global consumer buying patterns, as well as environmental stresses, and economic developments leading to shifting origin markets and new trade lanes.

The PER market is strong compared to general cargo, he told delegates, with yield dropping less than general cargo yield over the last two years. He went on to explain that trade patterns would shift as new middle classes in countries with growing populations, such as China and India, started to spend more money on fresh food. Switzerland, Australia, and Norway had the top three spends on fresh food at USD1958, USD1472, and USD1470 respectively per capita in 2014, with China at USD392, he said.

But this is rapidly changing, as income growth, coupled with population growth leads to increased PER demand. “Growing middle classes in emerging countries will play a large role in future PER trade patterns, and therefore the demand for PER by air,” he said. “Growth of PER demand will mostly be seen in developing countries, where regional supply is insufficient and new long distance PER trade will emerge.” He added that agriculture land sourcing by third countries for large countries such as China could further support international PER growth.


The perishables (PER) market will continue to grow, but the industry must pay attention to emerging trends such as changing global buying patterns, environmental pressures, and new trade routes, delegates at the Cool Chain Association (CCA)’s Perishables Summit in Barcelona heard. The PER market has resisted pressure on yield and continues to be strong compared to general cargo, and despite the threat of modal shift and disruptive technologies, with 2.5m tonnes airfreighted globally in 2015. 

“I typed the words modal shift and air into Google and got 153 thousand hits,” said Malik Zeniti, Cluster Manager, Cluster for Logistics Luxembourg. “There is modal shift, it is true, but there always has been and there always will be. “When you look at modal shift, you really need to look at individual countries and commodities to get the true picture.” Although 80% of global PER food is imported by developed countries at the moment, income growth, coupled with population growth will lead to increased demand in countries such as India and China.

The world’s largest retailers continue to grow, providing them with scale for global sourcing of PER. Retail turnover in the top 15 countries stood at USD5,936 trillion in 2015 and is expected to grow at Compound Annual Growth Rate (CAGR) of 6% until 2020, with almost 70% of growth expected to be realised in developing countries.

The groceries market is expected to grow at CAGR 5.5% in the same period. Retailers are increasingly focused on shelf life, whilst at the same time, there is a growing demand from consumers for quality and seasonal, fresh produce.

The question is – who will pay?

“There is a new generation of people who want a better quality of product and are prepared to pay for it,” said Ronny Wolff, Communications Assistant, Cluster for Logistics Luxembourg. “At consumer level, people are prepared to pay more for the fresh quality that air can deliver.”

Roland Duquesne, Director Strategic Accounts Europe, Ingersoll Rand-Thermo King said that it was down to cost, and ocean was simply cheaper. Carriers such as Maersk are developing new technologies such as remote sensors to check reefer temperatures at sea, and are ahead of the curve he said.

But Janet M. Coldebella, Business Development Manager – Fresh, Americas for Air France-KLM-Martinair Cargo said that although sea freight providers were taking market share, shippers who had made the move were actually coming back to air. “Last year, they tried strawberries from Canada, but it didn’t work and they are coming back to air now,” she said. “PortMiami was interested in the African flower market with the ocean air model but actually that didn’t work out well. “It used to be that nobody in the air cargo industry wanted to touch perishables, now everybody wants that business.”

Ken de Witt Hamer, Director at WorldACD, pointed out that ocean was not the only mode looking for a share of the PER market. Shippers were also looking to use new routes such as the New Silk Road. He added that the industry should be also be prepared to see shifting trade patterns because of water stress and climate change. “Future food demand may increase food sourcing outside Asia for Asian countries, given more competition for land use, increased demand and challenges for water,” he said. He added that food outsourcing was a trend to watch. “South Korea is the leading country leasing agricultural land in other countries for own food sourcing,“ he said. “But it is likely that India and China will increase food outsourcing in the future.”


The PER industry should improve its communication with customers, be more transparent and better communicate its commitment to shippers, delegates at the Cool Chain Association’s (CCA) Perishables Summit heard in Barcelona. The industry has dramatically improved over the past ten years, with new facilities, better Customs systems and sound procedures. But shippers still complain of a lack of transparency.

“Is it really helpful for the shipper to have full transparency and see all of the logistics involved in a shipment?“ said Gonzalo Jacob, Head of Cargo, Sharjah Aviation Services. “We need to find out what it is the customer actually needs to know and demonstrate that we can deliver.” The group agreed that customer misconceptions occurred because of a lack of communication.

“I think it’s true to say that, for example, with pharma customers, there is a misconception that with a warehouse, they are actually dealing with a lab, but of course it is not a lab it is a warehouse,” said Fabrizio Iacobacci, Head of Pharma Business Development, BCUBE Air Cargo. “We need to communicate clearly so that customers understand what to expect.” The PER industry is failing to demonstrate value despite having process in place delegates agreed.

“We do have a standard, it is called the Cool Chain Quality Indicator (CCQI),” said Edwin Kalischnig, Secretary General, CCA. “But it does need to be reviewed and it needs to be updated to reflect new trends such as eFresh.“We need a strategy to ensure it is properly adopted.” Delegates agreed that even when value and processes were demonstrated, customers were reluctant to stomach the additional costs.

One CCA member said he had visited a customer who asked for a cool chain which could help with the degeneration of asparagus by one percent, which would be equal to a ten percent improvement on his bottom line. But even though this could be done, in the end the customer refused to air freight.

“At the end of the day our customers have so few logistics people at Board level, it can be difficult to win the day, said Sebastiaan Scholte, CCA Chairman and Chief Executive Officer (CEO), Jan de Rijk Logistics.

Malik Zeniti, Cluster Manager, Cluster for Logistics Luxembourg said that there was an added layer of difficulty because of the high number of very small producers involved in the fresh supply chain. “What about Pedro on the side of a mountain growing roses?” he said. “He doesn’t care ultimately what happens after the roses get sold to the next person in the supply chain, he won’t be prepared to pay extra cost.”

Most shippers were also reluctant to pay for green solutions, delegates heard. Green is good but only if it's free, was the comment from the floor. The PER industry’s hand will eventually be forced by new regulations and demands from end consumers on retailer. But in the current market, for most, green is a luxury.

Trends such as eFresh will also lead to the need for green initiatives, delegates heard, because of the challenge of last mile delivery amongst other issues. The industry needs to better communicate and collaborate, looking at solutions such as co-loading and adopting smart new technology.

CCA members agreed at the meeting to reach out to shippers and shipper associations to get feedback on what they needed and open a dialogue.

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