Shipping companies ready for peak exports for the 2024/25 campaign

The Chilean cherry industry continues to set milestones, positioning itself as the leading supplier to the Chinese market, season after season, with increasing volumes.

For the 2024-25 season, the industry anticipates another record year, with initial estimates indicating about 112 million boxes exported, showing significant potential. However, there are several challenges that the sector must face as a new season approaches.

To discuss these issues and to provide greater clarity on what lies ahead, the IFPA organized a working breakfast with industry members in Santiago, Chile.

One of the speakers, Francisco Labarca, partner and executive director of South Port Shipping, indicated that the projections for this year seem to be “fairly certain, because there have been the chill hours that were lacking last season, so it could even be more than 112 million boxes.”

Although there are still no official estimates from the Chilean Cherry Committee, South Port Shipping has made projections to prepare for the season, based on experiences from previous periods.

“Based on the estimates, in the first weeks of this season, there will be significant differences compared to the last one,” said Labarca. “This is good news for shipping companies, because it means that between week 46 and week 3 there will be about 10,000 more containers of cherries, but they are very well distributed over time.”

In this regard, he commented that during the peak of the season, it is estimated to reach 5,600 containers per week, which, although a very high figure, is not far from the 5,400 containers per week at the peak of the previous season.

“I don’t think this will create extraordinary stress on transport capacity, as the peaks are quite manageable,” said Labarca. “This is good news because it means that shipping companies, given the same tonnage (ship capacity), will be able to move many more loads,” he added.

Image 1: Francisco Labarca.

Challenges to Consider

Despite the positive projection in terms of volume and what this means for shipping companies in terms of income, Labarca assures us that we need to be cautious in terms of transport capacity and phytosanitary management to keep the fruit moving.

“We are facing an impressive demand for transportation, but the shipping companies have assured us they have a weekly capacity of 6,500 containers to bring cherries to China,” said Labarca. Although the transport offer exists and provides reassurance to the sector, Labarca stated that there are concerns due to the fruit that must be transported with cold treatment.

He explained that it was initially estimated that 30% of the transported fruit would need cold treatment, but it is now estimated to be about 50%. This is because the main production areas, including processing facilities, are under quarantine for fruit flies.

“If you consider the installed capacity of the facilities in the affected areas, you are forced to bring healthy fruit there for processing, and once the fruit enters these facilities, it requires cold treatment,” said Labarca. In this scenario, he explained, preparing a container with cold treatment, including loading, placing sensors, and inspection, takes about an hour and a half.

At the peak, 705 containers are expected to be inspected daily, which means 8 hours a day and requires 88 refrigerated workers. The problem is that suppliers offering this service typically have an average of 15 reefer workers, so the numbers are insufficient to inspect that many containers daily,” explained Labarca.

The expert raised this issue as a concern but assured that there is still time to resolve it.

Another Logistical Issue

Labarca told the attendees that packing facilities must have their own reefers, as both exporters and shipping companies are hiring the services of reefer companies, but the supply is limited. For this reason, he urged working together, indicating that “if we look at this aspect individually, it will be impossible to secure that number of service providers.”

He added that the time inspectors need to move from one facility to another to start the certification process is very inefficient, a process that could be sped up if each facility hired a permanent and fixed reefer. Additionally, with many reefer containers in transit, which he estimates could be up to 3,000 at any point in the season, defects must be detected before the container is shipped.

“There is another issue, which is the responsibility of the shipping companies to upload the treated container information at the destination into the Chinese online customs system,” said Labarca. “The shipping company must be clear on how the cargo is released, because with these volumes, if a shipping company is slow in the process, it could be a commercial disaster, as we won’t be able to move the fruit.”

Consequently, Labarca called for coordination between the shipping companies, service providers, and exporters to agree on an operational protocol that benefits everyone.

Sanitary Challenge

Producers and exporters are facing another challenge this season: fruit fly outbreaks in production areas.

The situation was explained by Rodrigo Barra, head of the Regulatory and Phytosanitary Certification Department of the Agriculture and Livestock Service (SAG), who indicated that the area that most concerns cherry producers is Chimbarongo, as it covers many hectares of production areas.

“Currently, we have six eradication campaigns: one in Ovalle, two in Valparaiso, two in the metropolitan area, and one in O'Higgins,” said Barra. SAG is already applying control measures to lift the quarantine in the affected areas. The extent of the quarantine is due to the measures required by China, which demands a radius of 27.2 kilometers from the location where the outbreaks occurred. The radius, Barra explained, is quite high, so they are working with Chinese authorities to reduce it.

“Most countries that have signed treaties only require 7.2 kilometers for quarantine, including the United States and Japan, but progress has already been made with China, which previously required quarantine for the entire region where the fly was detected,” said Barra.

The problem for producers and exporters is that all fruit produced or packed in the quarantine zone must be shipped with cold treatment, which, as Labarca explained, adds more work, procedures, and risks to the export process.

In Ovalle, where 301 hectares are under quarantine for China and seven cherry packing facilities, the campaign is expected to be lifted in November 2024. The lifting of the campaign depends on completing three fruit fly life cycles without detection.

In San Bernardo, the quarantined area is 2,552 hectares, where 17 packing facilities are located. The campaign is expected to be lifted in December 2024. And in the most relevant area, Chimbarongo, there are 15,582 hectares of cherries under quarantine and 31 packing facilities, where the quarantine is estimated to be lifted in January 2025.

Source: Portal Frutícola
Image: Portal Frutícola

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