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Perishables shippers have limited room to absorb rising airfreight costs, airlines have warned, raising questions over how long some products can remain commercially viable to fly.
While booming demand for AI infrastructure supports higher freight spending, flower and fruit exporters face a harder ceiling: what consumers will pay for their products.
“Perishables are a very low-margin business, in which there is only so much the consumers will pay,” Fred Ruggiero, Cathay Cargo’s VP cargo for the Americas, told The Loadstar at TIACA’s Air Cargo Forum in Miami.
Avianca Cargo CEO Diogo Elias highlighted the difference between customers shipping AI servers and “paying whatever”, and flower exporters with much less scope to accommodate higher transport charges.
He pointed to WorldACD figures showing Latin American yield increases of around 7% to 8%, against 24% to 25% globally, illustrating the region’s difficulty passing on higher fuel costs.
Atlas Air chief commercial officer Martin Drew warned that sustained cost increases could eventually push some commodities out of airfreight.
“The longer it continues, what you start to worry about is … price elasticity, where you get to a point where it’s just no longer viable to send by air cargo,” he said, citing some perishable products as potentially vulnerable to modal shift.
Yet sea is not always an option. For seasonal produce, a delayed harvest can eliminate the time available for an ocean journey, leaving exporters needing airfreight precisely when their plans have become harder to execute.
“As a result of the weather, the harvest may be delayed. That means it’s going to miss the fast boats, so more has to be transported by air,” said Mr Ruggiero.
For Cathay, getting South American cherries to Asian consumers involves coordinating capacity across several carriers and gateways.
“Transporting cherries from Chile through Miami, Los Angeles, or New York and onward to Asia is a complex journey where speed and temperature control are essential,” he explained. “The product needs to move quickly, remaining at the optimal temperature throughout the journey. Otherwise, you’re left with an awful lot of cherry juice.”
Those movements are organised well ahead of the harvest, with interline charter capacity feeding Cathay’s network.
“We have charters lined up with interline carriers from Chile to Miami or Chile to Mexico, so we can get them out to Asia,” said Mr Ruggiero. “The problem is, if it’s all planned in advance and everybody is ready to go, what happens if the crop gets delayed? There’s a lot of communication involved amongst ourselves, the forwarders, the growers, and even down to the farmers.”
One air cargo executive described the precarious economics of a business in which a year’s work could be threatened by rain at the wrong moment, adding: “I don’t think I’d ever want to be in that business.”
Securing lift is another challenge. Cathay reported capacity shortages both from Asia to the US and within Asia.
“So we’re trying to secure additional capacity within the region,” said Mr Ruggiero.
Once space is booked, the handling requirements leave little room for improvisation. Treating all fresh produce alike can undermine the value of an expensive air journey.
“On the handling side, it takes expertise to handle perishables properly, and every type of perishable is handled slightly differently,” he said. “For example: how cold they can be, how much humidity they can withstand, and whether they can be covered or not.”
For forwarders, that means managing several moving targets – the harvest, connecting flights, handling conditions, and a freight bill the customer can afford. A delayed crop can require a faster journey, but it does not necessarily give the grower more money to pay for one.