Outlook 2016: Fees, limited cargo space increase costs of imported flowers

by Christine Boldt; executive vice president at Association of Floral Importers of Florida in Miami. She can be reached at christine@afifnet.org.

In the fall of 2015 the flower industry finally found some relief in the high cost of flowers from Ecuador when the United States Congress passed the extension of the Generalized System of Preferences. Unfortunately, roses — which are the largest imported flower from Ecuador — are not covered under the GSP. Therefore, roses continue to have a 6.8 percent duty. There is a recommendation to the United States Trade Representatives that roses be added to GSP and hopefully a decision will be made soon.

In 2015 the United States Department of Agriculture and Customs & Border Protection got approval to increase fees for services and several of those increases are impacting imported flowers. The reimbursable overtime charges that occur because of needed inspections will be charged back to the entity that requests the overtime. The overtime rate that we pay CBP is minimal because it provides 24/7 coverage in Miami for all perishables, but there will be an increase in the hourly amount.

The USDA overtime fees for pest identifications and fumigations are also increasing. These increases in fees began on Nov. 2, 2015 and on Dec. 28 there were additional fees on airlines, cargo ships and trucks that enter the U.S. But the biggest impact will be the USDA now charging a fee for fumigations done during regular hours of service. These fees will start out at $47 per fumigation and will increase each year until they reach $273. This particular fee will be costly for farms that have pest interceptions and require fumigation.

Importers are strapped even more than last year with the limited amount of space available on the northbound cargo carriers that haul flowers. The number of flights has been reduced from each of the major flower-producing areas and the charges per kilo continue to increase — with two increases in December and January — thereby increasing the cost of flowers being sold.

Importers are always working on becoming champions of logistics, providing more standards and guidelines for the industry, and having the most efficient processes. Flower importers are looking forward to a great 2016 as they continue to work with the industry to get more U.S. consumers to understand the value of flowers, the benefits of flowers, and ultimately to buy more flowers.