On December 1, Kenya Airways will be sending its first non-stop cargo flight from Kenya to US. This is a great step forwards for Kenya’s flower growers as well as its fruit and vegetable farmers. For years now, they have decried the lack of direct and non-top flights to the US.
But does this cargo route really stand to be a cash cow profit stream for Kenyan flower growers, fruit and vegetable farmers?
Now, air cargo transport has two main segments that define the sector, the perishable products which include flowers, fruit and vegetables as one sub sector then pharmaceuticals and medical equipment.
In the US, fresh food consumption is going up dramatically and fresh produce categories are driving nearly 49 percent of all dollar growth in the consumer goods in stores: the US mangoes market is seeing a 10 to 15 percent growth every year, average red fruit consumption tripled in the past eight years and avocado consumption went from three to nine dollars pounds per capita in seven years.
This all means there is huge opportunities for Kenyan fruit and vegetable farmers in the US market. However, Kenya is constrained by an efficient transport and logistics infrastructure deficit. For example, as much as 40 percent of flowers prices goes into transport and supply chain logistics making it expensive to fully exploit the US market.
Kenyan flowers, which represents 23 percent of the perishables business, lose about 20 percent value equating to a loss of Sh 10.3 billion (€88.8 mln) because of limited cold storage facilities.
Despite JKIA boasts of being the nerve hub for transit cargos going to the Eastern, Central and Southern Africa and KQ a leading airline flying to a large network of African destinations, it has been Emirates SkyCargo that has been transporting over 800,000 units of malaria tester kits and other associated equipment to African countries including Tanzania, Malawi, Zambia, Zimbabwe and Nigeria since 2015, due to a lack of pharmaceutical handling capacity.
This all means that Kenya also has to invest in ultra-modern cold chain facilities, training and certification required to transport pharmaceuticals efficiently in order to tap into this lucrative business segment. But more generally, Kenya has to develop a modern and cost-efficient logistics and supply chain infrastructure which will go a long way in cementing Kenya Airways and JKIA's position as the continents cargo transport airline and hub.
Source: businessdailyafrica.com