By
Cherie Rowlands |
Demand from cruise brands for sourcing food and beverage provision has altered over the years as the lines visit an increasing number of remote locations. Ten years ago, supply chain requirements were mostly centred around the Caribbean for ships leaving the US. Today, ships are operating year-round and in international waters, with some vessels not returning to the US at all. Add to that an increase in the mix of nationalities and younger cruisers, along with the worldwide trend towards sustainability and local sourcing, and it is clear that conditions are changing for passenger supply chains.
Kuhne + Nagel’s marine division delivered around 10,000 containers of provisions specifically for cruise lines in 2012, including Royal Caribbean International, its biggest customer. With the supply of food and beverage evolving from a regional to a global business across the industry generally, 90 per cent of the company’s food and beverage is shipped by sea freight. Global operations manager of marine logistics Stefan Sönksen says: “If something goes by air, it means something went wrong, but the difficulty is to get the product free alongside ship just in time and at minimum cost. Typically, every provision consists of deliveries in three temperature categories – dry cargo, refrigerated cargo and frozen product – and this adds to the complexity because if a container arrives too late and shellfish or meat are unavailable, it impacts on the passengers’ menus. If a container arrives too early, unnecessary detention and demurrage fees are an additional cost to the supply chain.”
The cruise and marine department of UTI is one of the youngest verticals in the company, but the most rapidly growing. Regional director Andreas Schwertfeger explains: “As the business becomes more global, one of the major challenges is to provide a suitable supply chain solution for a variety of food and beverages, including frozen items such as fish and meat, along with chilled products like milk, cheese and butter.” He continues: “In addition, you have to deal with veterinarian-controlled items and products with a short shelf life, not to mention customs regulations that are different across countries, including individual nations within the European Union.”
Schwertfeger believes there is a rise in budgets for managing sustainability. “Sustainable products and services will increase in the future, but it is hard to say at which level. It very much depends on governments and regulatory authorities. If the focus is on attracting investment into the economy of a country, this may lower the priority of sustainability issues. So the demand for sustainable products may be there, but the question will be if the consumer is ready to pay for it.
“Generally we are seeing bigger cruise lines purchasing directly from the source and requesting that logistics providers offer more than shipside deliveries at a single location in the world. They are wanting the whole package, including project management for dry docks, bonded customs procedures, port security clearance, reverse logistics, purchase order management and vendor consolidation programmes.”
Sergio Herrero, vertical market director, marine logistics for Geodis Wilson, says: “We handle very small cruise lines compared to the big boys so it’s a little bit different but it’s still about local sourcing, depending on the brand and what the brand is going after as far as market share. What I don’t understand is when the industry is procuring goods in, say, America, and shipping it either to Australia or Europe.”
One company hoping to capitalise on a shift to sustainability is ShipServ. The supplier counts the cruise sector among the most active users of its e-commerce platform. The company works with more than 10 cruise companies including Princess Cruises, Carnival Australia, Holland America Line, Seabourn, Windstar Cruises, Star Cruises, Regent Seven Seas and Oceania Cruises. Business development director Mark Warner says: “ Our commitment to sustainability is to provide buyers and suppliers with the most effective online tools possible to avoid wasted time and paper. In 2006 we launched ShipServ Pages – an online sourcing directory – to help buyers find the right suppliers around the world. In 2012, there were more than 2.8 million searches from over two million unique visitors.” In 2012, a total of US$3.5 billion of products and services will be sourced and traded through the company’s e-marketplace.