‘The Future of Norwegian Seafood Logistics’ was the headline on the invitation to the event organized by Lars-Gunnar Comen, owner of Swedish exhibition organizer, EuroAvia. However, the big white elephant in the conference room of the Clarion Hotel at Oslo’s Gardermoen Airport, was e-commerce. And for good reason, because Temu, Shein, Alibaba and co., attract air freight capacity like magnets, siphoning it off from traditional air freight flows. This is increasingly affecting the Norwegian seafood business, putting growing pressure on the entire industry, experts confirmed during the event.
Seafood is Norway’s most important industry by far, accounting for 95% of all air freight exports. In 2023, the industry had a total turnover of 14.6 billion euros and produced 2.8 million tons, which corresponds to 39 million meals per day. This is evidenced by data delivered by the state-owned airport operator, Avinor, which manages 32 civil airports in the country, including Oslo Gardermoen, Bergen, Stavanger and Trondheim. Seafood accounts for 55% of all cargo shipments handled at Gardermoen, Norway’s largest airport, said Torgil Stalberg, MD Gardermoen Perishables Center.
Warning of Bangladesh experience
Panelists repeatedly pointed out that reliable and large freighter capacity is required to transport the temperature-critical shipments from the fjord farms in Norway to the consumer markets as quickly as possible. This worked quite well for years. Recently, however, this is no longer the case, as can be seen from the declining number of freighters serving the Scandinavian country. Airlines have shifted capacity to more lucrative routes, filling them up with e-commerce consignments flown from China to Central Europe, predominantly to Liège, Budapest and Madrid. “Once they have gone, they are unlikely to come back, as the example of Bangladesh shows,” exclaimed Adam Gunnarsson, VP Kales Group. Local manufacturers in Bangladesh are now sitting on their garments because there is too little uplift for textiles due to the shift of capacity to e-commerce. Consequently, Bangladeshi manufacturers are now considering tapping into alternative supply chains via airports in neighboring India.
More uplift is needed, not less
A warning example for Norwegian shippers and their forwarders because “nothing is in a bigger hurry than a dead salmon,” illustratedOdd-Erik Jenssen, Purchase & Sales Manager Fram Seafood AS, at the Gardermoen logistics conference. “We urgently need more uplift capacity, not only from Oslo, but above all from airports in the north of Norway, where the majority of fish farms are located,” he urged. But how realistic is this wish? Most of the 90 attendees were rather skeptical regarding the fulfillment of this demand, was the general impression at the event. And this despite the fact that seafood accounts for 10% of all commodities flown from Europe to the APAC region and its sub-markets (2023 figure).
Balanced loads required
To make matters worse, the rates on EU-APAC routes have plummeted lately, which doesn’t exactly make fish flights more attractive for cargo carriers. The good news, however, is that the kilo price seems to be leveling out, indirectly due to e-commerce. Stuffed with goods on their westbound flights, the airlines depend on healthy load factors on their way back to the Far East to render the routes profitable. However, Europe is currently experiencing sluggish industrial growth which results in transport imbalances. This is evidenced by 86% inbound freight flown from East Asia to Europe, while in the opposite direction only 45% of the freight capacity is being sold. So, the answer to this imbalance could be a combination of e-commerce inbound and seafood traveling outbound. A win-win situation benefitting all sides: e-traders, the Norwegian fish industry, and Asian consumers of salmon, king crabs, Atlantic mackerel, haddock et alia. Although Europe is still the most important consumer market for seafood (accounting for 37%), China, South Korea, and Japan are catching up fast. For example, 32% of all seafood consignments originating in Norway are meanwhile destined for China.
New market considerations
In addition to the seafood vs. e-commerce discussion at the Gardermoen meeting, the question was raised what the industry itself can do better to increase its business. A plausible answer was delivered by Fram Seafood manager, Odd-Erik Jenssen. “We need to expand our product range and offer salmon burgers, salmon hot dogs, poke bowl, and other culinary nuggets based on seafood, in addition to smoked and fresh salmon.” A recommendation that caused many nods of approval.
