Too high air freight costs challenge American-Canadian food trade company because it is too expensive to supply reopened Asian markets with seafood.
85% of the salmon that the multinational company Smokey Bay Seafood Group trade is to Vietnam. But being located in Canada and the US limits all transportation routes of fresh salmon to Asia at the moment. It is simply unaffordable due to the price increase on airfreight and cancellation of passenger flights to market. The company is therefore not able to supply the growing demand from their main market Vietnam.
“We have orders in Vietnam, but we just can’t deliver anything to them. It’s just lost money,” says Pattrick Warren, president of Smokey Bay Seafood Group to SalmonBusiness and underlines:
“The market has come back in Asia, but we are not able to supply them with products.”
The company was first hit four weeks before the US market when the pandemic hit the Asian market. Now Smokey Bay sees that the market is opening up again, but they can not supply it, as Norwegian salmon is much more competitive, than the Canadian they sell, and provides salmon to a cheaper price.
“We can’t compete with Norway at the moment, as airfreight is too expensive, so it is not worth it,” says Patrick Warren.
All the company can do right now is wait for passenger flights to be welcomed back into Vietnam, and that online sale will be boosted.
“Asia is going to come back online and it is going to come back huge. Hopefully, the governments will soon allow flights back in,” says Patrick Warren.
The shipments that should have gone abroad are at the moment being sold cheaper.
“We are selling chumps of salmon cheap, so it does not go to waste.”
The company usually sells salmon from True North, Cooke Aquaculture or Ocean Quality. They mark themselves as a company that sells high-end products, and also sell farmed shellfish, clams, wild salmon and oysters. In regards to the market in Canada and America the company does not have high expectations for a prompt improvement.
“Here in North America, it is going to be pretty beat the next couple of months.”