Sandy Neil

Moving targets

Shifting seafood by land, sea and air has become more challenging

BY SANDY NEIL

This month we look at transport, and the problems and solu� ons of moving salmon by road, sea and air amid the turbulence of Covid-19 and Brexit. What other trouble could be lurking over the horizon?

During the pandemic, the Sco� sh Salmon Producers Organisa� on (SSPO) said export sales of Sco� sh salmon were hit hardest by the closure of food service sectors in vital markets like the USA, EU and China, plus a lack of long-haul passenger fl ights to these des� na� ons, and a consequent spike in freight charges. A lot of freight, including perishable goods like fresh salmon and seafood, is carried in the belly of passenger aircra� , but without that airliner capacity, the cost of ge� ng produce air freighted on a cargo plane soared. In April 2020, the fi rst month of a UK lockdown and travel restric� ons, it was es� mated 8,500 aircra� were parked, with only a quarter of the global capacity in opera� on. Passengers at Edinburgh Airport plummeted from 250,000 a week to as few as 200. That month, per kilo, air freight rates went up around ten-fold.

Airfreight rates are expected to remain elevated in 2021 as the demand outlook remains uncertain, and belly capacity is slowly re-introduced into the market.

Wri� ng in a Bal� c Exchange market update earlier this year, Bruce Chan, vice president – global logis� cs at investment bank S� fel, said a lack of bellyhold capacity would drive high rates, as passenger airlines will only slowly reintroduce interna� onal widebody services.

“By the second half of 2021, we do an� cipate passenger fl ights to resume, especially as vaccina� ons pick up,” he said. “But we cau� on against over-exuberance, as the fi rst fl ights to come back are likely to be short-haul, domes� c, and leisure, which align less favourably with cargo. Core long-haul interna� onal travel and the belly capacity that comes along with it will be slower to return, in our view, so capacity relief for cargo should lag the recovery in airline passenger ac� vity.”

The predic� on was borne out in June, when Chan reported: “Supply was the big story last year, and it is s� ll an issue as slow vaccine rollouts in certain parts of the world and resurgent variants of COVID have kept a lid on long-haul belly capacity. Moreover, in contrast to the leisure-focused domes� c market, business travellers make up a signifi cant por� on of the transcon� nental passenger cohort. There may be secular trends favouring a slower return there, such as conserva� ve human resources policies, new digital tools to facilitate virtual mee� ngs, and a desire to preserve some of the travel and entertainment opera� ng cost savings from 2020.

“For many, the ques� on remains: where will rates go? Put simply, we believe that current sup-

“Supply was the big story last year”

Left: Edinburgh airport

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ply and demand trends will push elevated rates through peak season and into 2022.”

A lack of passenger fl ights also posed a poten� al problem for Norway’s salmon producers, who rely on air freight as their main route to markets outside Europe. However, Norway’s state-owned airport operator Avinor, which handles most air freight out of the country, said it had managed to maintain, and even improve, capacity for transpor� ng Norwegian seafood through the Covid crisis.

“Demand for fresh Norwegian seafood con� nued in 2020 despite Covid-19, and at Oslo Airport a record was set in the number of tonnes of seafood that was transported by air to world markets,” the company reported in February.

“At a � me when there has been a great global shortage of air freight capacity, the airlines have chosen to priori� se capacity from Norway and Oslo Airport. This is primarily due to a con� nued high demand for Norwegian seafood. In total, more than 110,000 tonnes of seafood were transported from Oslo Airport to large markets throughout the world, with Japan, South Korea and the US being the largest export markets.

“There has been an increased demand for air freight capacity for Norwegian seafood from Oslo Airport, as a result of reduced capacity from other European airports. The disappearance of intercon� nental passenger routes with cargo capacity has been replaced by several dedicated cargo aircra� . At most, we have had over 70 weekly fl ights that have taken off from Oslo Airport with fresh Norwegian seafood to Asia.

“Norway is in a special posi� on because we have a stable export product in Norwegian seafood that is in high demand. This is a� rac� ve for airlines,

Above: Oslo airport Below: Eimskip ship Opposite: A Ferguson vehicle delivering aquaculture supplies which then fi ll their fl ights back to Asia from Europe by adding a stop at Oslo Airport or other Avinor airports. For example, Qatar Airways has established a freight route with fresh Norwegian seafood, which will be transported from Harstad Evenes Airport to central hubs in Asia.” Meanwhile in Iceland, an “experimental” transatlan� c shipping route for fresh salmon exports to the United States and Canada has exceeded expecta� ons, according to Icelandic shipping company Eimskip. Exporters in Iceland and the Faroe Islands began a series of trial runs during the second half of last year. By April 2021, Eimskip said they were so successful that they have now become regular weekly shipments.

In addi� on to salmon, the company expects to see “a considerable increase” in whitefi sh shipments over the next few months.

Eimskip CEO Vilhelm Már Þorsteinsson said: “It is clear that the adjustments we made to our shipping system for the export of fresh produce are already transla� ng into value for our customers, both in the increased value of the product and as a new and more environmentally friendly and as a new and more environmentally friendly op� on in fresh transport to this distant market.” op� on in fresh transport to this distant market.”

In Scotland, Ferguson Transport and Shipping is a family-run fi rm established in 1959, with 12 family members working within the business, family members working within the business, including fi ve third genera� on. Today it is one of the largest independent transport and distributhe largest independent transport and distribu� on companies in the Highlands and Islands, and � on companies in the Highlands and Islands, and has provided logis� cs support to the aquaculture industry for over 40 years.

“Ferguson Transport and Shipping provide road and marine logis� cs, crane services, warehousing and marine logis� cs, crane services, warehousing and port opera� ons,” explains Group Managing and port opera� ons,” explains Group Managing Director Alasdair Ferguson. “Through our joint venture partnership in Kishorn Port Limited, we venture partnership in Kishorn Port Limited, we also lease to third-party companies within the also lease to third-party companies within the boundaries of the port for cage manufacturing and recycling and the growing of cleaner fi sh. and recycling and the growing of cleaner fi sh.

“We mainly transport salmon in specially designed insulated cylindrical tanks, fi sh feed, designed insulated cylindrical tanks, fi sh feed, new nets, morts, cages, plas� c pipes for cage manufacturing, para move, oxygen, ADR and IMDG products. Most services are required by

the farms direct or from their suppliers.

“We also offer a ‘Biosecure Mort Management Solution’ integrating biosecure tanks, vessels and road logistics where morts are uplifted at pens, dewatered, loaded into sealed cylindrical tanks and transferred from farm by sea/road for reuse in the energy from waste or the agriculture sector for fertiliser.”

Together with its customers, the company is tackling the challenges of Covid-19 and Brexit. “The industry continues to evolve and change at pace, so the challenges and opportunities are always evolving,” Alasdair said. “We need to know and understand the customers’ challenges and where best we can help and come up with the correct solutions through continued good communication.

“We are faced with more strict safety and environmental protocols, procedures and legislation than ever before, and both topics are paramount in the future success of any business and continued growth. Net zero, carbon footprint and energy transition are also in the forefront of everyone’s mind and we need as an organisation to recognise this and respond accordingly.

“In time, fish farms will inevitably go further off shore into potentially much deeper water and more harsh environments where subsequent moorings and anchorages will become more challenging. However, we have invested in our managers and staff in the marine, port and road logistics teams and are ready to meet these challenges.” FF

“There has been an increased demand for air freight capacity”