Disruption shows how trade hasn’t really changed

Recent events in Europe have highlighted the power of mother nature and how fragile global food and flower distribution has become. The immense dust cloud created by the volcano on Iceland has disrupted an intricate air cargo business that involves millions of dollars worth of perishables per day.

Recent events in Europe have highlighted the power of mother nature and how fragile global food and flower distribution has become. The immense dust cloud created by the volcano on Iceland has disrupted an intricate air cargo business that involves millions of dollars worth of perishables per day.

Consumers have become so complacent about their food supply that they expect to be able to buy the widest variety of fresh produce every day of the year at their local grocery store. That includes even fruit and vegetables that are out of season in the dead of winter. The fact that an astounding variety of fresh produce is even available has a lot to do with air freight being available on a global scale. When that gets disrupted by mother nature, the effects are quickly felt around the world.

In winter months, it is not unusual to see soft fruits flown in from New Zealand and South America; peppers flown in from greenhouses in Holland are common place. However, the most air freight dependent commodity has to be flowers. Ever wonder how it is possible to have fresh roses year-around in even the most out of the way stores? It’s only possible thanks to air freight. Roses have been developed to mature in different places in the world at different times. Sometimes roses are shipped in from Kenya, other times from Colombia or California or South Africa. It’s all been carefully organized and coordinated by the flower industry.

Anyone who has been to the giant flower auctions in the Netherlands would be amazed that roses grown in Kenya are flown there, sold and then flown to North America or Asia almost the same day. With airplanes grounded in Europe this intricate global system comes to a grinding halt at least until distributors find ways around the problem. It’s been estimated that millions have been lost in the flower business already and none can ever be recovered from perishable products.

It isn’t just flower marketing that gets hit when planes don’t fly. There is a thriving live lobster business that sees those crustaceans flown all over the world. Hard to believe, but at times, meat and other food products are flown around the world. Fresh lamb is regularly flown from New Zealand to North America and Europe. One ponders how that can be done considering what the freight costs must be. Well, competition is so fierce in the air freight business that there are special back haul rates and last minute surplus space deals.

For instance, a 747 freighter with electronics might fly to New Zealand at full air freight rate from Japan and has a full freight rate load from Vancouver to Japan. They may well fly a load of fresh lamb and strawberries from NZ to Vancouver for gas money just to pick up the full rate load. It’s very similar to the trucking business, not surprisingly.

Although there has been disruption to the global airfreight routes, I expect the market and the air cargo companies have quickly adjusted and rerouted jets through other airports.

The over arching question does arise: Isn’t this a great waste of resources in fuel and emissions just so rich consumers in the western world can enjoy roses and fresh strawberries in the dead of winter in Alberta?

Yes, it is a waste as we can all clearly survive without such luxuries. But that’s the beauty of the free market as long as someone is willing to pay the price for a product – someone somewhere in the world is willing to supply that product, legal or otherwise.

One reflects on the history of trade when luxury goods like silks and spices took years to travel from one part of the world to another at a huge cost in resources and even lives. Back then mother nature imperiled cargoes all the time with weather calamities. There was even further dangers from pirates and hostile authorities extracting tariffs as trade goods made their perilous journey around the world. Then again, perhaps nothing has really changed when it comes to global trade, just the nature of the product and the mode of transportation.