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A barrel of oil for a salmon

Blog post   •   May 12, 2016 11:15 CEST

It made the Norwegian and international headlines in January. For the first time ever, a standard farmed, good quality Norwegian salmon was worth more than a barrel of oil. The price of salmon stood at 70 krones per kilogram, which meant an entire fish weighing 4.5 kg cost 315 krones, while a barrel of Norwegian oil went for just 270 krones.

In fact, it was partly the tumbling oil price that pulled down the Norwegian krone (NOK) – which in turn favored Norway’s strongly export-oriented fishing industry.

Besides traditional fishing, there is a huge seafood industry in Norway, especially for farmed salmon. Norway is the world's leading producer of farmed Atlantic salmon and a leading exporter in the seafood industry. It is a thriving billion dollar industry and global demand continues to grow. According to the Norwegian Seafood Council, seafood exports from Norway have more than doubled in the last 10 years, and salmon exports in particular broke records in 2015, with exports worth NOK 47.7 billion ($5.8bn) overall, which is 1,035,000 tonsof salmon when measured in product weight.

The export boom is all the more surprising when considering Russia’s import stops. As a result of this, the export share of Norwegian salmon to the EU increased last year. In terms of value, exports to Asia increased by 15% and exports to the U.S. by 33%, compared to 2014.

Panalpina’s Perishables and Air Freight teams specialize in the transportation of thousands of tons of fresh Norwegian salmon from Oslo Airport to destinations across the globe. Panalpina is relatively new to the salmon export industry in Norway, but a strong combination of experienced and knowledgeable staff combined with excellent service levels and access to air freight capacity sets us apart from the competition.

While there is just one type of farmed salmon exported from Norway, the Salmo Salar, it comes in several sizes. All of Panalpina’s destinations like different sizes. For example, Taipei is a city that usually does not eat sushi. They normally make chops out of the salmon, so they order the bigger fish. A big fish however, is not as attractive to look at compared to a smaller fish, where the flesh is smoother and more delicate and is preferable for sushi. This is why Japanese customers prefer to order small fish for sushi. Some destinations such as Hong Kong are less specific and prefer a variety of sizes while the U.S. prefers the fillet as opposed to the whole fish.

Knowing what the markets demand, how salmon is farmed in Norway and how it has to be handled, in other words understanding the product, is what we call “product empathy”, and it helps us find the best transport solutions for our customers. Exporting salmon from Norway to Asia or the U.S. requires monitoring and attention from start to finish. The business never really stops. It’s a 24/7 set-up and regardless of when and where it happens, our teams need to be ready at any time to tackle any unexpected events.

Speed is a key objective when transporting fresh salmon. Freshly harvested salmon straight from Norway’s fjord’s can reach its destination within 48 hours and be available to buy in a supermarket or eat at a restaurant in less than three days.

The only cooling element during transport is wet ice which surrounds the fish in their individual boxes and keeps each box at 2-5 degrees. Palettes with approximately 160 boxes each are put onto skids and placed onto the lower deck of the plane. In the days running up to Easter, Norway’s export volumes of freshly harvested salmon peaked again, contributing to what is expected to become another record year for the country’s fishing industry.

Interestingly, it was the fishing industry in Europe that helped the oil industry see the light of day.

In the 18th century, in the French village Pechelbronn of the Alsace region, oil was mined and extracted for commercial use, as a combustible for lanterns and in medicine. During that period, trade with salted herrings was booming too. The fish was sold from the coastal regions to the heartland and transported in barrels. Herring barrels could be acquired inexpensively, so it was not long before they were also used for transporting oil. It was the first time that the term “baril”, French for barrel, was used to describe an oil barrel.

Over one hundred years later in Pennsylvania, during the crude oil boom, the 42-US-gallon barrel (159 litres) became the official standard container and measuring unit for oil.

Given the current oil price, it might be a better idea to fill oil barrels with salmon again.