Transporting Abalone from Australia to Billingsgate Market - Case Study Example

Transportation of Abalone Name Institution Table of Contents Table of Contents 2 Introduction 3 Product Description 4 Abalone Packaging And Storage 4 Means of transport 5 Air transport 5 Truck Transport 5 Risks to the exporter 5 Key Challenges involved in the transportation of abalone from Australia to London 7 References 12 Introduction Importing and exporting fresh fish and sea products can be a practical, challenging and yet profitable business. The demand for fresh fish and seafood products is a growing business. To transport fresh and life fish, and sea products, companies need to be extremely careful and find the optimum conditions that reduce mortality and enrich the quality of the products. According to the APEC Fisheries Working Group (1999), “Special packing systems should be employed to avoid abuse and counteract rough handling.” For instance, live and fresh abalone is suited for shipping because the fish can easily survive and substrate out of the water. The shipper should also consider the right packaging, labeling, insurance requirements and documentation for both the place of origin and the region of destination. Transporting abalone from Australia to Billingsgate Market, London can be faced with various challenges. The two nations are far apart and therefore, different methods of transportation would be involved in the process. Fresh abalone can survive for less than six hours without oxygen, however due to the distance, in this case, the fresh abalone will require proper packing and fast means of transport. Live abalone can survive a transit time of up to 36 hours, and, therefore, it will be carried through the air from Australia to London (APEC Fisheries Working Group, 1999). From the airport, the abalone will then be transposed by road to Billingsgate market in London. This paper will explore the transportation procedures involved in the transportation of the product from Australia to Billingsgate in London. It will also discuss the steps involved, justify the processes, the risks and the challenges involved in the transportation procedure. Furthermore, the paper will also provide a solution to these challenges involved in the process. How abalone will be transported from Australia to Billingsgate in London Product Description Abalone is the collective name for a group of large to small edible sea snails. Abalones are found in the sea in a bowl- shaped shells that normally resemble large slugs or snails. The texture of abalone is similar to a cooked mushroom, and its flavor is delicious and extremely delicate (Hill, 2008). As a result of the growing demand for seafood and fresh fish, the demand of abalone has increased over the years. After harvesting abalone, it can be processed, packed and sold in several products and conditions depending on the customer demands (Ralph Tasmanian Seafood, 2015). Abalone Packaging And Storage Abalone is usually hand harvested by licensed drivers who then transport the product to processing factories in refrigerated vehicles. Live abalone is placed in crates, and the temperatures are lowered and the salinity of the water is controlled in holding tanks with pure seawater. Live abalone is usually not fed for 2-4 days before shipment to reduce the production of waste during the transit. The abalone is then packed into 12kg sealed polystyrene foam boxes, and the boxes are placed on core flu boarding sealed with oxygen in heavy gagged bags and an icepack to keep the fish at low temperature. According to the APEC Fisheries Working Group, abalone survives best in a moist environment and therefore, abalone is never covered with water during transportation. Fresh abalone can survive up to thirty-six hours of transit and therefore in this case air transport would be appropriate. The 9007.185 kg of fresh abalone need to be transported, and therefore, 75 standard boxes of 12 kg sealed polystyrene foam boxes and a single box of 7.185kg. These boxes are then stored in ventilated cargo bins. According to IntraFish (2008), fish and seas products can be transported in aeration bins that are subjected to continuous maintenance to increase the mortality and quality of the products. Means of transport The transportation of abalone, in this case, will involve two methods of transportation from Australia to Billingsgate market London. Air transport Fresh abalone can only last up to thirty-six hours when it is properly packed and stored. This implies that the only suitable transportation method for this product between Australia to London is through air transport. Justification: The reason for selecting this means of transport is because the product is highly perishable and requires a swift method of transportation to stay fresh. Truck Transport Road transport would be used to transport the fresh abalone to the airport from the harvesting and processing plant. Upon arrival at the London City airport trucks will be used to transport the fresh abalone to the Billingsgate market. Justification: The reason for choosing this means of transport is because there is no airport at the market and the only reliable means is road transport. In addition, the fresh fish are delicate and only fewer means of transporting the product ensure product quality and decrease mortality. Risks to the exporter a) Temperature and Bacteria Growth When transporting products like fresh abalone, the exporter should consider the bacterial contaminations of the shipping containers and other materials to avoid the risk of product deterioration. In this case, abalone requires optimal cold temperatures to enhance the product mortality and quality. Proper sanitation processes and low temptations during the transportation process can lower the growth of bacteria. b) Packaging systems The packaging system involves the type of insulation, coolant, the outer cover used, and waterproof materials used in the packaging process. The exporter needs to ensure that the packaging materials are thoroughly sanitized to minimize the spread and growth of bacteria and any other forms of corrosions that can affect the quality of the abalone. c) Product handling This involves the methods involved throughout the packaging and transportation of the product. The exporter needs to ensure that the harvest methods, packaging and transportation of the product are carefully done to preserve the quality and freshness of the product. For instance, when handling abalone, the harvesters need to avoid causing any physical damage that might lead to bacterial infection or any physical damage to the product. d) General shipping regulations The exporter is faced with the challenge of the complicated, difficult and time-consuming rules involved in the transportation of fresh fish and sea products. Factors like planning and organizing the most efficient and cost friendly air freight policy can be a risk factor to the exporter. Handing the goods to some air cargo transportation organizations can lead to the loss of products due to the mishandling of the cargo or incorrect packaging. Key Challenges involved in the transportation of abalone from Australia to London a) Strict rules for the commercial importation of fish and sea products from the outside of European Union Importing fish in Europe is a challenge for both the buyer and seller since the region imposes strict laws that control the consumption and purchase of fish and sea products from non-EU countries. According to the Foods Standards Agency (FSA), fish and sea products from non-EU countries must come from the approved countries and must also be accompanied by appropriate health certifications from the relevant offices. Secondly, consignments from these non-EU countries must come approved fishery premises or approved bivalve mollusk’s production areas. Thirdly, the fresh fish consignment must enter into Europe through the legal channels and veterinary, and hygiene checks are carried out by an official fish inspector. Additionally, all consignments containing fish products should be pre-notified to the border inspection post (BIP) prior to arrival. Another key challenge that might affect the transportation of abalone to London is the 853/2004 regulation of bivalve mollusks. This policy requires all imports of products like abalone, winkles and gastropods among others to be commercially harvested from approved regions that are regularly monitored to ensure they meet the microbiological and toxin criteria. According to the FSA, abalone, and other related sea products feed exclusively on filter feeders and; therefore, they are prone to accumulate and picking toxic contaminants from their environments (FSA, 2015). a) Security risks With the current increase in terror-related crimes, many countries including the United Kingdom have to carry out physical checks on imported fish products into the country. According to Seafish (2015), physical checks to ascertain the legality of the products are done on most imported products. The controls are carried out according to the Annex III criteria which involve sensory checks, physical tests, laboratory tests, weight and wrapping materials. These checks affect the delivery time and may eventually lead to high mortality or decrease in the quality of the abalone since they are highly perishable. b) Cargo theft risk Advancements in technology have diversified the risk of cargo theft. This risk factor has also led to an increase in the insurance cover making the exporter to suffer high costs in case of theft especially if the goods are not covered by a reliable insurance cover (Australian Trade Commission, 2015). An importer needs to know and understand several things including transportation, packaging, payments methods and insurance covers to overcome the challenges involved in the importation of abalone. i) Transportation The importer needs to understand the fundamental aspects of the transportation systems involved in the transportation of his or her goods. Constant changes in technology have positively impacted the air cargo transportation of live and fresh sea products and fish. The industry is always looking for new and improved ways to make the packaging and transportation of fresh fish and sea products such as abalone safer, cost effective, and efficient. The APEC Fisheries Working Group argues that most airline companies do not handle live products during some certain times of the year and therefore, it is the duty of the importer to know the best transportation airline that can deliver quality product at the particular time of the year. Abalone is highly perishable and therefore, it is important for the importer to agree with the exporter on the best air cargo carrier that has demonstrated commitment and proper handling of fish products. The importer also needs to have a clear and detailed procedure on when and how the goods would be transported from the airport to the final destination in this case (Billingsgate market). For the importer knowing the transport procedure is essential to overcome the loss of goods and contamination, as the abalone is transported from the exporter. To select the best air cargo for transporting the abalone, the importer should draw up an airline schedule that requires minimum handling over the shortest time. By working closely with the freight forwarder, the importer can get assistance in preparing the export documents such as packaging lists, commercial invoice, and airway bills among others. ii) Packaging The importer should also consider the packaging process and materials used for his or her goods. In this case, coolants such as dry ice, polyethylene bags, and gel packs should be placed on the bottom and top of the container to absorb the heat from outside. Abalone requires cold temperatures and moist environment to stay fresh. It is important to avoid over chill, and this can be prevented by ensuring that the coolants are not in direct contact with the abalone. The abalone boxes should also be fitted with an absorbent pad that can leach liquids away from the fish to prevent leaching. Apart from the general information on the packaging of fish and sea products, the importer should know the ethical problems involved in the shipping and packaging of live fish. To avoid any potential censure and penalties, the importer needs to employ a code of conduct that handles with care the packaging and shipping of abalone. Siegner (2013) argues that imported sea products care normally mislabeled and sold under another name that leads to serious cases of fraud and food safety. The importer needs to avoid this by choosing specialized shipping systems with the correct packing and labeling procedures. iii) Payments When importing goods from abroad, the importer should understand several methods of payment in the international trade. The importer should choose an appropriate method of payment that minimizes the payment risk while also accommodating his or her needs (Eport.gov, 2012). For the importer, payment in advance is the least attractive option since it creates an unfavorable flow of cash, and there is the risk of losing the goods. The importer should consider a letter of credit especially when importing fragile and highly perishable goods like abalone. This is because this means of payment through the letter of credit binds the exporter to deliver quality and meet the terms and conditions of the importer. Besides, the letter of credit is reliable especially to the importer since no payment obligation arises until the requested goods have been shipped according to the agreement. Another necessary payment procedure the importer should know before purchasing goods like abalone is the documentary collection. This document allows the exporter to receive to receive funds from the exporter through the banks involved in the collection in exchange of the documents (Export.gov, 2012). Importing abalone is a risky business, and therefore, the importer should consider these payment procedures. iv) Insurance An importer needs to consider insuring his goods because there is always a risk that the goods might be damaged, lost or delayed in transit. The importer should understand these risks involved in the movement of goods and limit his or her liability in case of loss, damage or delay. According to HM Revenue & Customs (2012), it is highly recommended for the importers to insure their goods to safeguard them against risks that are linked to loss, delay and damage to the goods. Insuring goods give the importer the chance to claim compensation in case of any of the above incidents happens to their goods while on transit. The basic insurance cover an importer can consider is the cargo insurance that covers goods in transit in the air for this case. It is a simple form of insurance and provides cover against damage and other risks. In addition to this the importer can also consider other forms of insurance cover such as the all-risk policy that covers specified incidents including negligence, damage during loading and, theft. Theft, damage and other risks such as losing the package as a result of negligence a can happen at any point through the transportation process. Therefore, the importer needs to reduce the risk of losing abalone due to these risks by choosing the cargo insurer cover. Fresh fish and sea products entering Europe and in this case London undergo several physical checks before they are taken into the market. An abalone importer needs to consider the risk of delay and therefore, choose an insurance cover that protects the abalone from the likelihood of delay. Without an insurance cover, the importer has a minimum protection of his goods because the freight forwarder usually has limited liability in the event of loss, delay and damage. In this case, the abalone is faced with a high risk of delay and damage since it is a sensitive product and the policies involved in the importation of the product into Europe are very strict (FSA, 2015). Having an insurance cover will cover the importer from other losses involved in the importation of abalone such as rejection of consignments as result of bacterial infections, damage and high mortality rates as a result of poor storage, and theft all which are highly linked to the transportation of fresh abalone. References APEC Fisheries Working Group,. (1999). PEC Air Shipment of Live and Fresh Fish & Seafood: Guidelines (1st ed.). Retrieved from http://www.nmfs.noaa.gov/trade/APEC_Air.pdf Australian Trade Commission,. (2015). Risk management - Austrade. Austrade.gov.au. Retrieved 26 September 2015, from https://www.austrade.gov.au/Australian/Export/Guide-to- exporting/Risk-management FSA,. (2015). Importing fishery products or bivalve molluscs | Food Standards Agency. Food.gov.uk. Retrieved 26 September 2015, from https://www.food.gov.uk/business- industry/imports/want_to_import/fisheryproducts Export.gov,. (2012). Export.gov. Retrieved 26 September 2015, from http://www.export.gov/tradefinanceguide/eg_main_043221.asp Hill, K. (2008). Fresh Abalone from American Abalone in Davenport, CA. The Kitchn. Retrieved 26 September 2015, from http://www.thekitchn.com/fresh-abalone-from-american-ab- 47361 HM Revenue & Customs,. (2012). Transport insurance for international trade - Detailed guidance - GOV.UK. Gov.uk. Retrieved 26 September 2015, from https://www.gov.uk/guidance/transport-insurance-for-international-trade IntraFish,. (2008). Live fish air transport system has low mortality. Intrafish.com. Retrieved 26 September 2015, from http://www.intrafish.com/sfp/news/article1245156.ece Ralph Tasmanian Seafood,. (2015). Tasmanian abalone products including live canned retort IQF blacklip and greenlip from Ralph's Tasmanian Seafood. Ralphstasmanianseafood.com.au. Retrieved 26 September 2015, from http://www.ralphstasmanianseafood.com.au/products.php Seafish,. (2015). Import guidance - Seafish. Seafish.org. Retrieved 26 September 2015, from http://www.seafish.org/industry-support/legislation/import-and-export/import- guidance#what-do-i-have-to-pay Siegner, C. (2013). Imports and Exports: How Safe is Seafood From Foreign Sources? | Food Safety News. Food Safety News. Retrieved 26 September 2015, from http://www.foodsafetynews.com/2013/11/imports-and-exports-how-safe-is-seafood- from-foreign-sources/#.VgZ_35dXXdE Read More