Kenya’s Horticultural Sector Faces Crisis as Airlines Withdraw Freight Services

Kenya’s fresh produce sector is on the brink of significant losses as several international airlines have pulled their freight services from Jomo Kenyatta International Airport (JKIA) in search of more lucrative markets. This withdrawal comes at the start of the peak season and is exacerbated by the absence of binding agreements that would require airlines to maintain services in the local market.

The situation has been worsened by the ongoing Red Sea crisis, which has increased the cost of transit through the Suez Canal by $200 per refrigerated container and extended the transit period by ten days. Ships are now taking the longer route around the Cape of Good Hope to reach Europe.

According to the Agriculture and Food Authority (AFA), the horticultural sector generated KSh157 billion (approximately $1.21 billion) in export earnings in 2023. However, the Shippers Council of Eastern Africa (SCEA) has confirmed that the logistics crisis at JKIA is significantly affecting fresh produce exports, particularly to Europe. The SCEA is urging the government to intervene by allowing temporary permits for freighters to fill the current gap, which is estimated at around 800 tonnes. They are also suggesting the wet leasing of cargo airlines to address this urgent need.

Agayo Ogambi, CEO of SCEA, stated, “We are over 800 tonnes less than the same week last year. This results in delayed delivery, loss of markets, and affects the shelf life of the products, leading to huge losses.” He emphasized the need for the government to approve temporary freighters to help alleviate the situation.

Decline in Cargo Capacity

Key international cargo airlines, including Qatar Airways and Turkish Airlines, have already cut back their freight services, leading to a notable reduction in cargo capacity. For instance, Qatar Airways removed two freighters that transported flowers from Nairobi to Liege, Belgium, resulting in a 200-tonne capacity drop. Similarly, Turkish Airlines has reduced one freighter per week from Nairobi to Maastricht, Netherlands, further impacting flower exports by a 100-tonne decline.

This decrease in capacity has caused airfreight costs to rise significantly, jumping from $2.3 per kilogram to between $3.57 and $3.6 per kilogram.

An anonymous clearing agent at JKIA confirmed, “Yes, it is true Qatar and Turkish Airlines have withdrawn freight services on some routes. I think it has to do with pricing. We are entering the peak season, and some alternative routes could be paying better than us (Kenya).”

Market Dynamics

Despite attempts to contact the management of Qatar and Turkish cargo airlines for comments, no responses were received. According to SCEA, foreign cargo airlines are enticed by better compensation in other global markets, especially with the upcoming festive season. For example, airlines transporting goods from Asia to the US can earn up to $8 per kilogram, compared to the $2.5 to $2.8 per kilogram they receive for services in Kenya.

Moreover, the lack of binding agreements means that these airlines are not contractually obligated to serve Kenya, making it easy for them to withdraw when they find more profitable opportunities elsewhere.

Impact on Kenya’s Economy

The logistics crisis affecting fresh produce exports from Kenya has increased cargo rollovers by 200-300 tonnes, according to SCEA. Agriculture, particularly horticulture, is a crucial pillar of Kenya’s economy, contributing significantly to the country’s foreign income by exporting flowers to over 60 countries.

In 2023, Kenya held a 12% global share in fruit exports and a 6% share in vegetable exports. The country produced a variety of fruits, with bananas, avocados, and mangoes being the most significant contributors.

The government’s swift action will be vital to mitigate the impacts of this crisis and safeguard the future of Kenya’s horticultural sector.