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Ecuador: Rise in air freight costs

Ecuador: Rise in air freight costs

The closing of a part of the Panamericana Norte highway, as well as the rise in the air freight costs, are affecting the activities of the flower industry, which is one of the main exporting sectors of the country.

Since the closing of the highway, the administrative and technical staff of the flower farms who live in Quito spend more than two hours to arrive at their workplaces in Cayambe and Tabacundo, among other northern areas of the province of Pichincha.

Alejandro Martínez, executive director of Expoflores, said that the measure adopted by the Ministry of Transport and Public Works to guarantee the safety of the highway users did not cause any considerable problems to the flower growing sector, because it came during a low season.

However, it is expected that the problem in the main road to the northern part of the country is solved until the end of January, when there is an increase in the flower shipments to United States, the European Union and Russia (the main markets of Ecuador) due to the St Valentine’s season.

The sector is confident that it can recover from a drop in its sales, because the export of flowers to United States reduced by 18% (compared to the last year) during the first semester of 2014.

AIR FREIGHT

Each year, Ecuador exports around 150,000 tons of products by plane, of which 94% are flowers, and imports around 30,000 tons (basic medicines, spare parts, oil inputs and mass consumption goods) on average, said Carlos Criado, business manager of Quiport.

Criado said that the “imbalance” caused by the import restriction adopted “due to political reasons” makes air freight prices rise, in spite of the fact that the runway of the new airport has the capacity to receive large-sized planes.

“Flower growers have expressed complaints because this situation definitively makes the product more expensive and they lose competitiveness”, he added. On the other hand, Martínez added that the Ministries of Transport and Foreign Trade “understand this situation” and they are looking for solutions.

Between 5 and 6 planes arrive at the airport of the capital every day during the normal season, and this frequency may increase to 11 or 12 during a high season.

DATA

Flower markets – Distribution

• United States: 42%

• Russia: 17%

• European Union: 16%

• Others: 25%

Author: Translated by Daltry Gárate for Hortibiz

Source:- http://www.hortibiz.com/hortibiz/nieuws/ecuador-rise-in-air-freight-costs/

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