THE WORLD FLORAL INDUSTRY: LOGISTICS AND TRANSPORTATIN ASPECTS (CASE OF CUT FLOWER SEGMENT)
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INTRODUCTION 5
CHAPTER 1. FLORAL INDUSTRY IN THE WORLD ECONOMY 8
1.1. Major Players in the Floral Industry 8
1.1. Exports 9
1.1.2. Imports 15
1.2 Comparative Advantage in the Flower Industry 17
1.3 Economic Aspects 20
1.3.1 Economic and social impact in exporting countries 20
1.3.2. Quality in the floral industry 22
1.3.3. Trends and changes in the industry 24
CHAPTER 2. LOGISTICS AND TRANSPORTATION ASPECTS 26
2.1. Logistics and Transportation in Economic Growth 26
2.1.1. Governing Trade Logistics 27
2.1.2. Logistic Performance Index 28
2.2. Transport and Logistics 30
2.2.1. Logistics process in the supply chain 30
2.2.2. Logistical challenges and obstacles 31
2.2.3. Metrics for Evaluating Logistics Performance 33
2.2.4. Quality in logistics in exporting countries 36
2.2.5. Logistics performance: competitiveness and profitability 37
CHAPTER 3. FLORAL INDUSTRY: TRANSPORT AND LOGISTICS 40
3.1 Conceptual Framework 40
3.2 Analysis of Data 43
3.3 Results 44
CONCLUSIONS 52
REFERENCES 54
ANNEXES 63
1. Annexes Table 2- Variable Description 63
2. Annexes Table 3- Descriptive statistics 64
3. Annexes:LPI: Ease of arranging competitively priced shipments . 64
4. Annexes:LPI: Quality trade and transport-related infrastructure 65
CHAPTER 1. FLORAL INDUSTRY IN THE WORLD ECONOMY 8
1.1. Major Players in the Floral Industry 8
1.1. Exports 9
1.1.2. Imports 15
1.2 Comparative Advantage in the Flower Industry 17
1.3 Economic Aspects 20
1.3.1 Economic and social impact in exporting countries 20
1.3.2. Quality in the floral industry 22
1.3.3. Trends and changes in the industry 24
CHAPTER 2. LOGISTICS AND TRANSPORTATION ASPECTS 26
2.1. Logistics and Transportation in Economic Growth 26
2.1.1. Governing Trade Logistics 27
2.1.2. Logistic Performance Index 28
2.2. Transport and Logistics 30
2.2.1. Logistics process in the supply chain 30
2.2.2. Logistical challenges and obstacles 31
2.2.3. Metrics for Evaluating Logistics Performance 33
2.2.4. Quality in logistics in exporting countries 36
2.2.5. Logistics performance: competitiveness and profitability 37
CHAPTER 3. FLORAL INDUSTRY: TRANSPORT AND LOGISTICS 40
3.1 Conceptual Framework 40
3.2 Analysis of Data 43
3.3 Results 44
CONCLUSIONS 52
REFERENCES 54
ANNEXES 63
1. Annexes Table 2- Variable Description 63
2. Annexes Table 3- Descriptive statistics 64
3. Annexes:LPI: Ease of arranging competitively priced shipments . 64
4. Annexes:LPI: Quality trade and transport-related infrastructure 65
The global floral industry has experienced significant growth, encompassing various aspects such as production, distribution, design, and retail. In 2021, the industry reached a value of USD 50.50 billion, reflecting its increasing importance in the world economy (MMR, 2019). This growth can be attributed to several factors, including changing consumer styles, the diversification of flower applications, the emergence of new distribution channels, and the integration of technology and automation in the floriculture supply chains (MMR, 2019). Projections indicate that the industry is expected to continue expanding, with an estimated growth rate of 8.1% between 2022 and 2029, reaching a value of USD 94.17 billion (MMR, 2019).
Within the floriculture market, the cut flower segment holds a significant market share of 83% (MMR, 2019). Cut flowers, particularly roses, are preferred by consumers due to their ease of handling, harvesting, and resistance to diseases and pests. Key players in this industry include the Netherlands, Colombia, Ecuador, Kenya, and Ethiopia, which collectively dominate the market (MMR, 2019). In terms of import zones, Europe accounts for 68% of total flower imports, followed by North America (21%), East and Southeast Asia (5.5%), and North Africa and Western Asia (2.3%) (Chavarro, 2022).
Despite favorable conditions, the floral industry faces challenges that can impact its optimal development, such as political tensions and pandemics. In recent years, the balance of power between carriers and suppliers has shifted due to unprecedented increases in transportation prices, capacity constraints, and congestion, particularly in the international segment (Kerriou, 2022). Consequently, there has been a paradigm shift in global logistics, focusing on reconfiguring logistics systems to minimize costs.
To address these challenges, innovation in logistics and transportation is crucial. Advancements such as smart containers, digitized ports, automation of shipping lines, and real-time data sharing aim to minimize costs and ensure optimal transport conditions for delicate products like roses. Maintaining controlled refrigeration levels and time management is crucial, as prolonged transportation can lead to a loss in product quality (Peters, 2022).
Given the importance of logistics in the commercialization of the floral industry, particularly on an international scale, it becomes essential to identify the main challenges and opportunities in logistics performance. The World Bank, through its trade and transport departments, provides valuable insights by measuring performance along the logistics supply chain, both at an international and national level. By examining the relationship between logistics performance and the floral industry, valuable insights can be gained to enhance the efficiency and success of the global floral supply chain.
This research has the general objective of determining the impact of logistics performance in the floral industry, with a specific focus on cut flowers. It seeks to answer research questions about the importance of the floral industry in the world economy, the main variables that influence exports of cut flowers and finally determine the level of the relationship that exists between logistics performance and the floral industry...
Within the floriculture market, the cut flower segment holds a significant market share of 83% (MMR, 2019). Cut flowers, particularly roses, are preferred by consumers due to their ease of handling, harvesting, and resistance to diseases and pests. Key players in this industry include the Netherlands, Colombia, Ecuador, Kenya, and Ethiopia, which collectively dominate the market (MMR, 2019). In terms of import zones, Europe accounts for 68% of total flower imports, followed by North America (21%), East and Southeast Asia (5.5%), and North Africa and Western Asia (2.3%) (Chavarro, 2022).
Despite favorable conditions, the floral industry faces challenges that can impact its optimal development, such as political tensions and pandemics. In recent years, the balance of power between carriers and suppliers has shifted due to unprecedented increases in transportation prices, capacity constraints, and congestion, particularly in the international segment (Kerriou, 2022). Consequently, there has been a paradigm shift in global logistics, focusing on reconfiguring logistics systems to minimize costs.
To address these challenges, innovation in logistics and transportation is crucial. Advancements such as smart containers, digitized ports, automation of shipping lines, and real-time data sharing aim to minimize costs and ensure optimal transport conditions for delicate products like roses. Maintaining controlled refrigeration levels and time management is crucial, as prolonged transportation can lead to a loss in product quality (Peters, 2022).
Given the importance of logistics in the commercialization of the floral industry, particularly on an international scale, it becomes essential to identify the main challenges and opportunities in logistics performance. The World Bank, through its trade and transport departments, provides valuable insights by measuring performance along the logistics supply chain, both at an international and national level. By examining the relationship between logistics performance and the floral industry, valuable insights can be gained to enhance the efficiency and success of the global floral supply chain.
This research has the general objective of determining the impact of logistics performance in the floral industry, with a specific focus on cut flowers. It seeks to answer research questions about the importance of the floral industry in the world economy, the main variables that influence exports of cut flowers and finally determine the level of the relationship that exists between logistics performance and the floral industry...
The global flower industry has undergone significant expansion, driven by a confluence of factors including increased demand for flowers on special occasions, advances in logistics infrastructure, international trade and technological innovation. This growth has led to the emergence of major players in both production and export, with countries such as the Netherlands, Colombia, Ecuador, Kenya and Ethiopia at the forefront of the global cut flower trade.
A country's international trade is influenced by a combination of economic factors, where employment, logistical efficiency, exchange rate and prices play significant roles. Employment and Exports: There is a negative relationship between employment and exports, suggesting that an increase in employment can lead to a decrease in exports. This could indicate that a competitive and growing labor market can affect a country's international competitiveness. Logistics Efficiency and Transportation Efficiency: Better logistics performance is associated with an increase in exports. This highlights the importance of an efficient logistics infrastructure to facilitate international trade and improve a country's competitiveness in global markets. Exchange Rate and Prices: Both the exchange rate and prices have significant impacts on exports. A depreciation in the exchange rate can increase exports by making products more competitive in international markets. On the other hand, an increase in prices can have a negative effect on exports by reducing the competitiveness of products.
The research examined the effects of logistics performance in the flower industry, specifically cut flowers. The findings revealed a statistically significant positive correlation between overall logistics performance and exports. The study also extended the analysis by examining six measures of logistical specificities in exports, of which two of the six logistical measures (quality of infrastructure related to trade and transportation; ease of arranging shipments at competitive prices) were positive and statistically significant.
The global flower industry has experienced substantial growth driven by factors such as increasing demand for flowers on special occasions, advances in logistics infrastructure, international trade and technological innovations, resulting in the emergence of major players such as the Netherlands, Colombia, Ecuador, Kenya, and Ethiopia. Economic factors such as employment, logistics efficiency, exchange rates and prices significantly influence a country's international trade dynamics. While there is a negative correlation between employment and exports, indicating a complex interaction between labor market competitiveness and international trade, improved logistics performance, particularly in infrastructure and competitively priced shipping arrangements, demonstrates a positive impact on exports. In addition, the study highlights the importance of exchange rates and prices in shaping export competitiveness: a depreciation of exchange rates generally boosts exports, while price increases can decrease competitiveness. Overall, the research emphasizes the critical role of logistics performance in facilitating international trade within the floral industry, particularly in terms of improving export capabilities and market competitiveness.
A country's international trade is influenced by a combination of economic factors, where employment, logistical efficiency, exchange rate and prices play significant roles. Employment and Exports: There is a negative relationship between employment and exports, suggesting that an increase in employment can lead to a decrease in exports. This could indicate that a competitive and growing labor market can affect a country's international competitiveness. Logistics Efficiency and Transportation Efficiency: Better logistics performance is associated with an increase in exports. This highlights the importance of an efficient logistics infrastructure to facilitate international trade and improve a country's competitiveness in global markets. Exchange Rate and Prices: Both the exchange rate and prices have significant impacts on exports. A depreciation in the exchange rate can increase exports by making products more competitive in international markets. On the other hand, an increase in prices can have a negative effect on exports by reducing the competitiveness of products.
The research examined the effects of logistics performance in the flower industry, specifically cut flowers. The findings revealed a statistically significant positive correlation between overall logistics performance and exports. The study also extended the analysis by examining six measures of logistical specificities in exports, of which two of the six logistical measures (quality of infrastructure related to trade and transportation; ease of arranging shipments at competitive prices) were positive and statistically significant.
The global flower industry has experienced substantial growth driven by factors such as increasing demand for flowers on special occasions, advances in logistics infrastructure, international trade and technological innovations, resulting in the emergence of major players such as the Netherlands, Colombia, Ecuador, Kenya, and Ethiopia. Economic factors such as employment, logistics efficiency, exchange rates and prices significantly influence a country's international trade dynamics. While there is a negative correlation between employment and exports, indicating a complex interaction between labor market competitiveness and international trade, improved logistics performance, particularly in infrastructure and competitively priced shipping arrangements, demonstrates a positive impact on exports. In addition, the study highlights the importance of exchange rates and prices in shaping export competitiveness: a depreciation of exchange rates generally boosts exports, while price increases can decrease competitiveness. Overall, the research emphasizes the critical role of logistics performance in facilitating international trade within the floral industry, particularly in terms of improving export capabilities and market competitiveness.
