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Slide 1: 

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

Content : 

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

Content : 

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

World flower exports 2006 : 

World flower exports 2006 Ecuador 6%

Per capita consumption : 

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

Flower market trends in U.S.A : 

Flower market trends in U.S.A Size of the floriculture industry: US$19.4 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

The Colombian flower industry : 

The Colombian flower industry 182,184 jobs (98,641 direct / 83,533 indirect) 1,000,000 Colombians depend on floriculture Exports 2007: US$967 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

Colombian flower exports : 

Colombian flower exports - 50 100 150 200 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Thousand tons - 100 200 300 400 500 600 700 800 900 1.000 Millions dollars Thousand tons Million dollars

Exports by market : 

Exports by market

Exports by product : 

Exports by product

Area : 


Regions : 


Share of the U.S. import market : 

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

Bouquet exports to U.S.A. : 

Bouquet exports to U.S.A. 76.8% comes from Colombia

Comparative advantages : 

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

Contents : 

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

Supply-chain Practices : 

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

Logistics and competitiveness : 

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

Flower Exporting by air : 

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 Valentine’s there were close to 1,500,000 boxes, or 111,000 boxes daily, and 816 pallets

El Dorado and Rionegro facilities : 

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

Slide 21: 

The industry handles around 60,000 boxes/day, one by one …there is room for improvements

The flower export process : 

The flower export process The product In the cold room Cargo identification Preparation of the load Analyses truck-airline Coordination with brokers, airlines, merchandising areas. Define type of truck Planning the cargo according to destination End of the load Flights Real Weight / volume Temperature verification Verification of: temperature, Security Schedule of load To the airport Yes No If the truck is going to another farm, procedures for loading the truck must be followed Transport to other farms A Posthaverst Planning Planning a load Load a truck Move into the cold room

The flower export process : 

The flower export process Cargo to the consolidators agencies or airlines Cargo consolidation Pallets configuration Storage to weigh pallets Airplane loading plan Time and temperature verification Verification of temperatures in cold room. Limits to have this cargo in storage Weight-Balance Verification of the temperature in load conditions Verification of time The product

The flower export process : 

The flower export process With the cargo agency Inform the farm # of the AWB assigned Farm prepares the boxes Verification of arriving farm trucks Final AWB. AWB with # of pieces and weights Gives the AWB and cargo requirements to the airline Pre-alerts destination and Track & Trace

The flower export process : 

The flower export process Cargo agency and airline Security warnings Projections for next week Program itineraries vs capacity Confirmation of projections Confirmation of quota Allocation of flight and arrival slot

The flower export process : 

The flower export process At destination Pre-alert Flight Unload AMS documents and customs manifest CBP (antiterrorism and plant health inspections) (separate sample, prepare listing, call inspector) Pick up order

The costumers : 

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

Slide 28: 

Quality is a pillar for creating value and customer satisfaction The exporter or importer usually end up paying for the inefficiency of the chain

Logistic practices : 

Logistic practices To get quality requires Effective coordination of the chain Coordinated cargo and document flow

We can improve if: : 

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

Contents : 

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

Asocolflores in Logistics : 

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 WF&FSA´s 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

Logistics : 

Logistics During high seasons, we coordinate with cargo agencies, airlines, governments and concessionaries so as to ensure better attention to the supply of flowers

Logistics : 

Logistics Postharvest Best Practices Manual (includes logistics topics such as traceability)

Asocolflores : 

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

Contents : 

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

1. Operational improvements : 

1. Operational improvements Efficiency between LTO and ATO contact Consolidation area Unified security process

2. Protocol for Cold Chain : 

2. Protocol for Cold Chain With the national and international LTO and ATO Verification of temperature at critical points of the chain Data-bases and feedback Management throughout the chain

3. Packing : 

3. Packing On the farm, LTO, ATO Protocol of consolidation, palletization and deconsolidation processes Indicators

4. Increase efficiency : 

4. Increase efficiency ConsoIidation Non intrusive inspections Cargo through-put In recepction of palleted boxes

5. Register indicators : 

5. Register indicators Ex. Delays, load time, consolidation time Management and processes

6. Enforce security standards : 

6. Enforce security standards Certification of members of the floriculture chain (farm, LTO, ATO, cargo agency, broker)

7. Fullfill international requirements : 

7. Fullfill international requirements

Slide 44: 

Sustainable floriculture with social responsibilityThank you