Internet of Things can’t solve every problem

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In some cases, however, the Internet of Things can’t solve all the problems shippers face when exporting perishables. Other, more prosaic technologies are called for.

In 2017, Australian fresh fruit exports exceeded A$1 billion ($750 million) for the first time in a calendar year, according to figures from the Australian Bureau of Statistics. Of this, 38 per cent went to China and Hong Kong, where exports to China direct recorded a 57 per cent growth in volume.

However, after tariffs the biggest obstacle to growing the trade is the Queensland fruit fly which can devastate harvests. Now scientists at Hort Innovation, a grower-owned horticultural research centre, are waiting to see whether a new project to eradicate the pest is going to bear fruit, so to speak.

In April this year, millions of specially-bred sterile fruit flies were released near Adelaide, South Australia to cut a swathe through the breeding population. Now, they and the growers are waiting until the next growing season to gauge the effect.

Hort Innovation CEO John Lloyd is clear about the significance of the project. “Apart from tariffs, the fruit fly is the number one barrier to trade and at a high cost we are ensuring that we remain fruit fly free,” he said.

“We are uniquely positioned in the world, with 400-500 air freight capable flights leaving Australia each week going to Asia, capable of taking instant fresh produce to enter the stores tomorrow. So the opportunity is huge, and while there are other pests to worry about, fruit fly is the biggest.”

Citrus fruits and grapes account for 84 per cent of Australia’s export volume, but the country is making plans to increase exports of other, more exotic produce, including papaya, passion fruit, lychees, bananas, persimmons and limes.

In Vietnam, meanwhile, the obstacle facing local exporters is more mundane; high air cargo costs.

Agrice Vietnam company general director, Dam Quang Thang told local media recently that his company has lost several export contracts to competitors in Thailand because of shipping costs.

According to Thang, the airfreight cost for a kilogramme transported from Hanoi to Australia is $3.05 while from Ho Chi Minh City the cost is $2.60. Freight costs from Vietnam to European markets also range from $2.90-3.20 per kilogramme.

These costs are much higher than in neighbouring countries. Thang cited Thai airlines where equivalent costs are $1.20-1.80 per kilogramme for transporting to Europe. Thang said that his company has to use Thai, Malaysian and Singaporean airlines because their costs are half or even one third of their Vietnamese counterparts. But that raises issues of capacity access and availability. Here the solution would seem to be injecting more competition into the market to shake up state-owned Vietnam Airlines.

To this end the Viet government has begun liberalising the aviation market, principally for passenger transport, but this could also see more and cheaper belly space become available to help local producers reach more international markets.

Vietnam’s exports of fruits and vegetables have increased sharply by 30 per cent in the first four months of this year to $1.32 billion. With the high export growth rate, they forecast that the sector’s export will surpass the threshold of $3.5 billion this year.

Nafoods Group general director Nguyen Manh Hung says that because of high airfreight costs his company has to limit exports of passion fruit. But securing lower transport costs would the firm to raise exports sharply.