The threat of Houthi rebels in the Red Sea means several shipping companies say they will opt for the route around the Cape of Good Hope. That significantly affects European exports to Asian countries, as is the case for Belgian Fruit Valley. It is currently in the midst of its export season, especially for pears to the Far East. "We're gearing up for the Chinese New Year, the year's most important selling period. The delay is considerably disrupting trade," says Marc Evrard of Belgian Fruit Valley, which recently integrated with BelOrta.
"It's clearly not an ideal situation. However, there seem to be few, if any, quality issues. The fruit's quality is excellent this season, so some extra transit time shouldn't have any effect. We usually count on a transport time of about a month. But upon arrival, you can store the pears, under good conditions, for another month."
"We'll, thus, not suffer any consequences. Still, it's a problem for our retail and partner programs. We're also quite close to just-in-time deliveries, which are now being interrupted. Particularly with goods that have already been loaded, you're suddenly confronted with delays," explains Marc.
"Sailing around the Cape of Good Hope quickly adds ten days to the transit time. That's not what you want, especially when exporting on a large scale to Asia. Our business partners and we can adjust regarding future shipments. But it's certainly an issue for what has already been loaded or is on its way."
Slow Steaming
Marc can not yet speak to the final impact of this, as there are still factors that could influence the transport time. "It's hard to estimate. Shipping companies sailing around the Cape of Good Hope are now skipping certain Mediterranean ports where they previously docked. Plus, container ships are 'slow steaming' (which has lower emissions). Should certain ships decide to sail faster in this exceptional situation, the delay could be significantly reduced. We'll have to keep an eye on that," he says.
Yet, Marc admits, the situation is far from desired. "Chinese New Year is that country's busiest selling period. It's also a vital time for us commercially. These delays could mean many goods won't reach consumers on time or when planned. It undoubtedly disrupts trade and makes it difficult for relationships you've built in the Asian markets."
Consultation
It is hard to say how long the situation will last. "It's such a complicated, explosive situation," Marc explains, "that we can only wait and see how it develops. Nonetheless, trade has been disrupted many times since 2014, and we've constantly had to adapt to new scenarios and realities."
"This is no different. The main thing we must and can do is to determine the exact situation and how we can best deal with it. We allow ourselves to be well-informed and are in constant contact with our partners. We can, thus, switch quickly if necessary," Marc concludes.
For more information:
Marc Evrard
Commercial Director
Belgian Fruit Valley
+32 (0) 116 93 411
[email protected]
www.belorta.be