“Transparency and Honesty are Extremely Important”

What are your key markets?

We mainly export to the United States, followed by Central Europe and China. Our strongest growth market is China, even though our market penetration there is still comparatively low. China currently has over 100 cities with more than 8 million inhabitants, so you can easily imagine the enormous potential for us. Our biggest customers are retail chains, such as Walmart and Costco in the United States or Aldi and Lidl in Germany.

There’s a lot of competition in your segment. After all, fruit and vegetables are also cultivated in and exported from other countries and regions.

That’s correct. But we make very clever use of the seasons and times of year. For example, we only grow avocados from April to the end of August, because there is no production in California, Mexico or Chile during these months – which naturally helps us enormously. And our blueberry season lasts from August to May, when there isn’t any production in the northern hemisphere.

How dependent are you on the weather?

Very. In 2018, the average temperature was one degree [Celsius] below that of the previous year. This inevitably has an impact on harvest planning and thereby on transport planning, as well. So we have to be extremely flexible. And one shouldn’t forget that our production takes place in the desert, which makes us dependent on water from the Amazon River reaching this very dry region. We employ around 16,000 field workers.

Perishable foodstuffs have to be transported in special refrigerated containers.
What proportion of your consignments are transported in reefer containers?

100 percent. And some of our products require special reefer containers. Controlled-atmosphere reefers can slow down the ripening process and extend the shelf life of our perishable goods, which is extremely important for avocados and blueberries.

How many containers do you transport per year?

We have an annual volume of around 6,000 40-foot containers. The average value of a container full of blueberries or shrimp is around $150,000.

What expectations do you have of a container shipping company?

For us, the most important thing is reliability. We expect you to be on time, to always have available equipment, to communicate with us with complete transparency when something goes wrong, and to be very flexible when there are changes from our side. And, of course, on top of all that, the costs have to be competitive.

How do you define transparency?

I think that transparency and honesty are extremely important. If there’s any bad news, I want to know the whole truth – and I want to know it immediately. You need to tell me where the mistake or problem is and provide me with the figures. I don’t want to have to put two and two together. And then let’s solve the problem together.

Can you give me a few examples of the kind of bad news you’re talking about?

Have containers been forgotten at transhipment ports? Are there capacity bottlenecks? Are there any serious delays? These are some examples of the kind of bad news that can be very unpleasant for us.

How do you rate Hapag-Lloyd’s performance? And where can we get better?

Hapag-Lloyd is generally very good, and you are definitely one of the best shipping companies. We are satisfied with your transparency, an area in which you are much better than the competition. However, in most cases, your prices are higher than those of other shipping companies, and we would place more orders with you if you were less expensive.

What is Hapag-Lloyd’s market share with you?

You currently have a market share of 20 percent with us. If your transit times were shorter, this percentage could be considerably higher – and climb to 50 percent if you offered lower prices, too. And I can promise you one thing: If you offer the best quality in the industry, we are willing to pay $200 more per container.

It seems like transport costs aren’t your biggest concern...

Of course they are. But we need premium transport partners for our sensitive cargo, and we’re willing to pay a good price for good service and high quality. Approximately 6 percent of our costs are transport costs. They are usually between $5,000 and $6,000 per 40-foot container.

I assume that you have a relatively high profit margin...

Yes, our margins are extremely healthy. Our profit margin is around 25 percent, and we are continuing to grow very quickly – at an annual rate of roughly 20 to 30 percent. This rapid growth presents an enormous challenge to our employees and partners in the supply chain.

And now there isn’t enough room for you in Peru anymore...

That’s correct. We’ve expanded our production to Uruguay and Colombia. And we’d like to cultivate new types of fruits and vegetables. Demand is immense – especially in China – and we see numerous growth opportunities worldwide. And we’d be thrilled if Hapag-Lloyd would grow along with us.