Royal FloraHolland is a Dutch cooperative facilitating one of the world’s biggest flower auctions. In 2016, 6.924 million plants and flowers were sold via Royal FloraHolland. The auction area covers 2.398.662 m2 which includes 138.667 m2 of cooling cells. Cut flowers are especially vulnerable and need to be processed quickly. The cooperative recently announced it has bought the majority shares of digital platform FloraXchange with the intent of developing one common digital platform under the name of Floriday.io. This will operationalise the horticultural supply chain network of 100.00 daily transactions and an assortment of 400.000 different flowers and plants at Royal FloraHolland.
The auction area at Royal FloraHolland is more than a warehouse space. Flowers and plants arrive from all over the world to be auctioned in real-time via the auction clock. Next, to facilitate the auction, the cooperative manages money flow, logistics and quality control. When the bid for a certain offer is closed and the transaction completed via online platform Flora Mondo 2.0, flowers then need to be transported internally to the buyer, who ships the flowers either via the multimodal route or if necessary via the nearby Schiphol airport.
Cut flowers usually require cooled trucks and aeroplanes, adding an additional challenge because of the time pressure to ensure ‘vase life’ for the consumer.
Automation of complex logistics:
There is a persistent trend towards the ordering of smaller quantities of flowers which makes the logistics process more complex. Royal FloraHolland is conducting automation tests with Automated Guided Vehicles using trolleys.
“Logistics get more and more fine-meshed, both at the clock and in direct trade”, says Ronald Teerds, Programme Director of the New Auctioning. “People order ever smaller quantities. The floriculture sector has to try to adjust the logistics so it can deal with this challenge. One of the solutions is robotics. This relatively new development could offer huge possibilities.”
The growth in smaller orders is evident from a rise in the total number of customers to 2493 in 2016, while the total number of suppliers is around double that number.
Buyers either have a permanent space or rent the area required to temporarily host the flowers after a bid has been completed. Plants will be transported to the buyer’s area with CC containers. Next to this, the auction trolleys are available for short-range transportation while remaining the property of Royal FloraHolland.
There are some similarities to the rent-a-bike systems which are popping up in big cities: Just like bikes, the trolleys can be picked up and handed back to specific delivery points.
As the Asian interest in flowers is growing, Royal FloraHolland is focusing on innovative cooling methods to secure plants can travel safely from sellers, largely situated in African countries, to buyers in Asia. The digitalization and virtualization of the auction are key to reaching Chinese buyers who are expecting to make purchases online.
Although the main exporting countries are in Europe, with Germany, the UK and France leading, demand from the US is growing fast and the global nature of horticulture is evident from top import countries such as Kenya, Ethiopia and Israel.
Can you guess the number one import product?
You wouldn’t be surprised to hear that the 2016 unit count of the number one import product was 746 million: It’s the rather fragile red rose!
Reusable Transport Items:
The horticulture industry works with a set resource allocation structure of several reusable transport items: Different sizes of boxes in which a number of pots are gathered, which are stacked in pallets which can then be stacked as a truckload or in a container.
Thus, reverse logistics plays an important role in the sector and is relatively optimised.
The interest from other sectors in reverse logistics is growing as well as a result of sustainability considerations. If applied effectively, reverse logistics can save money as well as materials. However, it all depends on the existence of solid infrastructure to enable these flows. In essence, it adds an extra flow of empty Reusable Transport Items next to the full ones.
The Finnish company RePack has taken up packaging for retailers as a service, by offering reusable shipping solutions for e-commerce.
The challenge of perishable products:
Suppliers are experimenting with smart containers which fully control environmental conditions such as temperature and humidity. Another focus area is that of advanced planning methodologies for synchromodal supply chains including near real-time optimisation.
How does the case study relate to you?
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Case, picking truck or trolley, MoyaVox is compatible with all transport items. The advantage of a wearable device is that pickers are able to receive instructions from the headset throughout their journey between locations.
Yearly report of 2016 by Royal Flora Holland.
Rohal Flora Holland announced it will establish Floriday.io together with FloraXchange.
Interview with Ronald Teerds about the testing of robotics.
The World Flower Exchange strategy focusses on the Asian market, especially China.
Reusable packaging service for e-commerce.