Airlines have cut the number of aircrafts they operate and the routes they fly by 90% due to the global covid-19 pandemic, which has cherry growers fearing a tripling in air freight costs this summer and the risk they will lose their status as premium suppliers to Asian markets.
Air freight enables cherries to reach consumers 48 hours after being picked in a Central Otago orchard.
Meat exporters are similarly concerned they could lose key sales and premium prices.
Transport Minister Phil Twyford says the Government is looking to extend the International Airfreight Capacity Scheme which is this month supporting 70 flights a week.
“The Government is giving careful consideration to the ongoing need for the scheme in light of continued border restrictions and limited passenger air travel,” Twyford said in response to questions from Farmers Weekly.
Up to $320 million was initially allocated to support airfreight capacity on key routes, but as at the end of August just $140m will have been spent.
Summerfuit NZ chief executive Richard Palmer says with concern already over market demand, reduced air services and air routes provides additional uncertainty for growers of perishable fruit such as cherries and tomatoes.
In a typical summer 5000 tonnes of cherries will be flown to markets, mostly to China, Hong Kong and Taiwan, with between 1300 and 1500t air freighted in the busiest week in January.
A further 1000t are sent by ship each year and targeted at less discerning consumers as it takes four weeks to reach markets.
Central Otago cherry grower 45 South chief executive Tim Jones, says he is confident there will be a solution by summer harvest, but he doubted it will involve exporting by sea.
“We supply high end niche markets with our fruit sold on quality and freshness, he said.
“The industry has worked long and hard to try and get to the point where we supply the best cherries in the world and have positioned ourselves as a premier supplier of cherries.
“That would be risked if we sent the fruit by ocean.”
Cherry exports are worth about $70m with China, Hong Kong and Taiwan accounting for over 80% of sales.
More than 90% of export quality fruit comes out of Central Otago and Jones says about 80% of that export fruit is flown out of Christchurch International Airport.
International air services have consolidated out of Auckland and Jones says that will increase the current six hour truck journey from Central Otago to Christchurch into a 36-hour trip to Auckland.
Hiring charter flights is not straight forward.
With little demand for imports in January, flights will arrive empty, adding to the cost.
Freight volumes need to be confirmed two weeks in advance which Jones says that is not always possible with seasonal fruit.
Palmer says tomato exports will similarly be impacted with peak season export volumes reaching 700t a week.
In mid-July there was air capacity for about 1,700t of freight a week which he says was adequate, but the issue is what space will be available when demand increases.
“The challenge is where to from here and nobody at any airline can say,” he said.
Initial inquiries indicate rates will be up to three times that paid last year and with limited flights Palmer says some exporters will miss out on. Meat companies are also watching the issue closely.
Alliance Group general manager of sales Shane Kingston says they do air freight product for some programmes and to supply orders with short lead-in times.
“It is a relatively important part of our supply chain,” he said.
While there has been some improvement in available space compared to post-lockdown, he says it is still well behind what was previously available.
Mountain River Venison’s marketing director John Sadler says space has not been an issue so far but it will be when production increases from October.
“When we are looking for more space, it will be interesting,” he said. “I guess it will be a balance between what is available and the cost of it.”
