Asia capacity problems slow down French fries export

Due to a lack of capacity on container ships, exporters find it very difficult to ship their goods to the Middle East and Asia. Agribusiness companies also suffer from this.

Due to the capacity problems, the waiting times for a place for containers have sometimes increased to several weeks. Against it Financial Daily Dutch entrepreneurs are talking about loss of orders because customers do not want to wait that long. Danish, German and Belgian shipping companies and forwarders confirm the shortage. At the same time, transport prices to Asia are said to have risen sharply.

The causes of the problems lie in the high demand for container transport from Europe to Asia and in the new alliances between shipping companies and thus changed sailing schedules. There is also pressure from the bankruptcy of the Korean shipping company Hanjin in 2016, which has not only reduced capacity, but companies are also looking more critically at which shipping company they use. After all, nobody wants to run the risk that their cargo will not arrive.

The French fries industry, which often sails with frozen containers to the Middle East and Asia, is also experiencing difficulties. For example, the Belgian-Dutch Agristo notices that capacity problems are playing an increasing role. 'For certain destinations we sometimes have to pay extra costs in order to be able to ship and get priority', says export manager Jon Heylen.

According to the export manager, there is a delay of 4 to 5 weeks for certain destinations, but he adds that there are also destinations where nothing is wrong. 'We experience most of the problems in Japan. Things are not going smoothly for South-East Asia either; there is talk of a week to two weeks delay.' Heylen expects the issue to resolve itself in the coming months.

A lot depends on exports for the pig sector. Asia is by far the most important export region of the European pig sector. European pig prices rose from a deep price trough in 2016, mainly due to Chinese demand. In order not to shake the foundations, which, thanks to exports in Asia, are below European pig prices, logistics should not abandon sales.

Nancy Arschman, head of communication at Vion Food, says that Vion's exports to Asia are going well and that there are no logistical obstacles or delays. 'In any case, we spread our logistics over several shipping companies, with which we try to be less vulnerable in the event of a delay,' says Vion's spokeswoman.

Arschman also states that Vion delivers weekly to Asia, which means that the slaughterhouse probably has an advantage. 'Perhaps this gives an advantage over exporters who occasionally deliver to Asia.'

Other slaughterhouses have also announced that the sale of pork to Asia will not suffer any logistical delays. Should meat exporters still be confronted with delays on the shipping routes to Asia, there are still alternatives. Experimented at the end of last year to get European pork to China by rail. Despite the fact that the infrastructure is probably not yet ready to transport large volumes, a 'Europe-China line' by train certainly has potential. The conclusion of the experiment was that land transport can reduce both food risks and time. 

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