Valentine’s just-in-time flowers from Holland
Logistics services in action: the flower industry in Netherlands
On the 14th of February, the entire world is going to celebrate Valentine’s Day, the day of lovers. What’s happening before those lovely, colorful and aromatic flowers get to your street-corner shop? Furthermore, what are the processes in place enabling to cope with this day’s peak demand? Millions of flowers have to be supplied to thousands of point-of-sale in an extremely limited amount of time (only a few days), this is the challenge logistics service providers are facing every year and successfully fulfill!
Logistics services for perishable goods
Most of the the flower market consumers can be found in the USA, Japan and Europe. For instance, the flower sales amounted to $35.2 billion in USA in 2010 (1). From the flowers’ cutting all the way to your shop, this perishable good requires a precise and flawless logistics service, including airfreight forwarding and cold-storage warehousing. In this article, we will discuss the Netherlands specialty in flowers trading and the world-class logistics services involved.
Netherlands, the largest flower auction in the world
The Netherlands has always been amongst the top exporters of cut flowers and bulbs in the world, distantly followed by countries like Colombia or Ecuador. Dutch flowers and plants exports amounted to €8 billion in 2011, which represents 2.1% of total Dutch exports against 0.1% in other European Countries (2). The Netherlands remains the center of production for the European floral market, as well as a major international supplier to other continents. The flower auction at Aalsmeer is the largest flower market in the world. Since the mid-1970s, the production and distribution of cut flowers in Netherlands has burgeoned, with millions of flowers traded every day in hundreds of thousands of transactions. This gives you an idea of the flows’ complexity, and the subsequent logistics services that have to be organized !
Logistics services and flowers
But how did a country with little sun, and even less suitable land become such a big player in the flower industry? The answer lies in the fact that in the Netherlands, companies work in clusters. Some companies are specialized in breeding and growing, others in cutting and packing and others in international warehousing and distribution. This cluster effect brings a competitive advantage as it provides customers with an impressive assortment of products (one-stop shopping), the business shifting from being seasonal to a year-round industry.
Furthermore, the Dutch heavily invested in Genetics R&D, with the results we have just presented. Lately, the flower trading scope in the Netherlands is changing from simple Dutch-grown flowers export to the management of global flowers flows, with production in South America and Africa (Kenya for instance). Consequently, we can say that the traditional Dutch flower warehousing and distribution business is evolving into a massive international flows’ management system. This shift’s main enabler consists in the Netherlands’ capability in making the world smaller, thanks to its state-of-the art logistics services, such as air freight forwarding and temperature-controlled warehousing and distribution.
The flower supply chain
The flower trading takes place via an auction system (physical and/or computer-based). Flowers are presented by lot to possible buyers, who decide about the quantity they buy till the lot is sold out. The success of this auction system is largely determined by its logistics organization. Day fresh products sold at the marketplace must be processed and transported to the point-of-sale as soon as possible, flowers being amongst the most delicate goods. Standardization of packaging, containers, the speed of air freight forwarding and the respect of the product’s cool chain via cold storage warehousing enable buyers from all over-the-world to receive freshly cut flowers from the Netherlands within 24 hours !
Logistics services in Limburg
As you see, time management and specialized logistics services are key enablers of the flower trading business. Furthermore, the Limburg area (a region located southwest of the Netherlands) counts with the presence of such logistics service providers. The region is traditionally a pan-European logistics center, with highly developed logistics infrastructures (airport, extensive road and rail networks, plus multi-modal capabilities) and has a strong logistics industry (major global logistics players and a wide variety of specialized logistics services, including advanced logistics, warehousing and distribution as well as air freight forwarding).
To conclude, we have presented the key role the Netherlands plays in the global flower trading. The latest trend consists in a shift from traditional cut-flower and bulbs distribution to the coordination of international flows, with a worldwide production and consumption basis. Flowers have always been beloved gifts, and sometimes express more than words could. This wouldn’t be possible without world-class logistics in the wold’s biggest flower auction marketplace!
Image source: PonderingbyKris
Text source (1) : US Bureau of Economic Analysis
Text source (2) : CBS.nl
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