Less than half of the mangoes that are dispatched from the orchards get eaten.
CSIRO researchers are looking at ways to smooth the bumps in the road to market for Australia’s agrifoods sector.
10 December 2007 | Updated 14 October 2011
Scientists from the Food Futures Flagship are taking the first comprehensive look at Australian food industry logistics, in a bid to gain a clearer picture of current costs and identify potential avenues for efficiency gains
The paddock-to-plate logistics in the food sector are complex, costly and may be eroding the value of Australia’s A$100 billion food industry by as much as 35 per cent.
There was a time when the local produce market was in the town square - a straight cart run from the farm to the centre of town. Today a lot of farm produce has to be freighted hundreds of kilometres and involves vast transport, packaging and storage infrastructure.
Food industry logistics
The Food Futures Flagship project State of Logistics in Australia is the first holistic study of food logistics in Australia.
By providing a more extensive analysis of cost structures and highlighting the interrelationship between quantitative and qualitative logistic drivers, the study has shown that logistics are a major component of the cost of food production and its retail value.
Some studies conducted at an industry or sector level have produced a conservative estimate of the costs and role of logistics in agri-food chains. The State of Logistics project aims to develop and test a methodology that better estimates the true costs of food logistics and to apply this methodology to understand their structure, drivers and challenges.
The project is a significant step to understanding the importance of logistics in Australian food industries. It has already identified many challenges ahead before major improvements can be realised.
The study will provide industry, funding bodies and researchers with an increased capacity to:
identify and act upon logistics opportunities that would provide high returns
better target investment and research to address these opportunities
improve transparency and value chain innovation across Australia’s agri-food sector.
Key drivers of food logistics include:
The project’s four case studies - mangoes, livestock, field crops and wine - each add a different context to these drivers, since each sector has its own unique characteristics.
The results of the case studies suggest that logistics costs are between 20 per cent and 50 per cent of the retail or export value, far more than the 3 per cent to 5 per cent reported in some previous sector-specific studies.
Assuming that these case studies represent the variety of agrifood industries in Australia, logistics costs are conservatively estimated to be between A$2.4 billion and A$6 billion for exported food products alone.
Efficient logistics - adding value
The study also highlights how efficient logistics can be a major value adding process, rather than just a cost to the food chain.
For perishable products - as represented by the mango case study - the State of Logistics study shows that logistics are a major driver of quality and ultimate retail value, which shifts the focus of logistics from a supply chain to a value chain context.
In some industries this may have a larger impact than the actual logistics costs.
Find out more about the work of the Food Futures Flagship.