Food Logistics March 2018 by Supply+Demand Chain/Food Logistics

TRACK AND TRACE GETS AN UPGRADE

PORT WILMINGTON PILOTS USDA PROGRAM

Food Logistics

CONSUMER DEMAND

STRENGTHENS

COLD STORAGE SECTOR

Â®

Global Supply Chain Solutions for the Food and Beverage Industry

CHECK OUT THE FOOD LOGISTICS 2018 CHAMPIONS

IoT GAINS A FOOTHOLD

IN THE FOOD SUPPLY CHAIN Issue No. 194 March 2018 FoodLogistics.com

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ROCK STARS OF THE SUPPLY CHAIN

Gene Averill Founder and CEO

Avercast

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Partner

Port Logistics Refrigerated Services

Jason Dick

Frank Dreischarf

W. Michael Jarrett

Stanton Kaye

Eduardo Kerbel

President

Vice President of Supply Chain Solutions

President

R2 Logistics

Jarrett Logistics Systems

President

Postharvest Technologies Senior Director, Business Manager Integrated Solutions

Roland Ornelas

Dave Reba

Peter Shin

Bernard Tremblay J.P. Wiggins

Steven Williams

Chief Commercial Officer

Director of Consumables Sales

Director of Pre-sales for North America

Director

Director of Operations

Dick Cold Storage

The Food Logistics Champions: Rock Stars of the Supply Chain award profiles people in our industry whose hard work and vision are driving the global food and beverage supply chain forward. Represented on the list are industry veterans and newcomers; corporate executives and entrepreneurs; and those with backgrounds in academia, agriculture and related industries. Congratulations to these deserving champions!

Richard â&#x20AC;&#x153;Dickâ&#x20AC;? Corbett

National DCP LLC Barcoding Inc.

Quintiq

Infratab Inc.

Miebach Consulting, North America

Bill Loftis

Carrier Transicold Transportation Insight

Co-founder and Vice President of Logistics

3Gtms

Universal Lumpers Inc.

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ROCK STARS OF THE SUPPLY CHAIN

Gene Averill Founder and CEO

Avercast

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Partner

Port Logistics Refrigerated Services

Jason Dick

Frank Dreischarf

W. Michael Jarrett

Stanton Kaye

Eduardo Kerbel

President

Vice President of Supply Chain Solutions

President

R2 Logistics

Jarrett Logistics Systems

President

Postharvest Technologies Senior Director, Business Manager Integrated Solutions

Roland Ornelas

Dave Reba

Peter Shin

Bernard Tremblay J.P. Wiggins

Steven Williams

Chief Commercial Officer

Director of Consumables Sales

Director of Pre-sales for North America

Director

Director of Operations

Dick Cold Storage

Richard â&#x20AC;&#x153;Dickâ&#x20AC;? Corbett

National DCP LLC Barcoding Inc.

Quintiq

Infratab Inc.

Miebach Consulting, North America

Bill Loftis

Carrier Transicold Transportation Insight

Co-founder and Vice President of Logistics

3Gtms

Universal Lumpers Inc.

3/8/18 8:46 AM

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ON THE MENU

OCTOBER 2015 ISSUE NO. 171

ON THE MENU

March 2018 ISSUE NO. 194

18 IoT Gains a Foothold in Food Supply Chains

FEATURE

TRANSPORTATION

THIRD-PARTY & REFRIGERATED LOGISTICS

he Latest in T Track and Trace

Advancements in sensors, wireless data and cloud computing provide food and beverage companies unprecedented levels of visibility.

SOFTWARE & TECHNOLOGY

48 ARTIFICIAL INTELLIGENCE

This annual list recognizes the industry’s most influential for their hard work, vision and leadership in shaping the global food supply chain.

SECTOR REPORTS WAREHOUSING

C old Storage Sector Stays Hot

A ddressing the Challenges and Opportunities in Last-Mile Delivery

The final leg of transportation represents a chance for organizations to win over customer perception as well as achieve cost savings in order fulfillment.

SPECIAL REPORT

Food Logistics’ Champions: Rockstars of the Supply Chain

W hat Do Grocery Shoppers Want? Technology

COOL INSIGHTS

From farm to fork, the Internet of Things has quickly integrated into every link of the food supply chain.

FOR STARTERS

As e-commerce innovation continues to disrupt brickand-mortar operations, traditional retailers must adapt to stay relevant.

COVER STORY

COLUMNS

Consumer demand for healthy foods and greater convenience are contributing to continued strong growth.

A I & the Supply Chain of Today and Tomorrow

Artificial intelligence is a reality, but many industries are slow to adapt. Here’s how to do it. OCEAN PORTS & CARRIERS

C hillin’ in North Carolina

New facility and USDA program at Port of Wilmington keeps produce safer and healthier for consumers, while increasing bottom line for shippers.

T op 3 Trends Facing the Cold Chain Industry

What innovations and trends are poised to have the greatest impact on the industry in the next three to five years? Lineage Logistics outlines their top three. FOOD (AND MORE) FOR THOUGHT

G etting Inventory Management Right

It is vital that grocers balance not just inventory productivity and waste, but the customer experience.

DEPARTMENTS

Supply Scan 12 Food on the Move 58 Ad Index 8

WEB EXCLUSIVES • Food Demos Can Create Lifetime Buyers foodlogistics.com/20991852

• An Unprecedented Risk: Today’s Corporate Debt foodlogistics.com/20994515

• Food Logistics’ Educational Webinar Series foodlogistics.com/webinars

Published and copyrighted 2018 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher. Food Logistics (USPS 015-667; ISSN 1094-7450 print; ISSN 1930-7527 online) is published 10 times per year in January/February, March, April, May, June, July, August, September, October and November/December by AC Business Media Inc., 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices. POSTMASTER: Send address changes to Food Logistics, P.O. Box 3605, Northbrook, IL 60065-3605. Canada Post PM40612608. Return undeliverable Canadian addresses to: Food Logistics, Station A, P. O. Box 25542, London, ON N6C 6B2. Subscriptions: U.S., one year, $45; two years, $85; Canada & Mexico, one year, $65; two years, $120; international, one year, $95; two years, $180. All subscriptions must be paid in U.S. funds, drawn from a U.S. bank. Printed in the USA.

FOOD LOGISTICS | MARCH 2018

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www.foodlogistics.com

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Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners. ©2018 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved. Major League Baseball trademarks and copyrights are used with the permission of Major League Baseball Properties. Visit MLB.com.

For more information, visit odfl.com or call 1-800-235-5569.

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3/8/18 8:56 AM

FOR STARTERS

FROM THE EDITOR’S DESK

DETAILS

WHAT DO GROCERY SHOPPERS WANT?

TECHNOLOGY

SOWINSKI

new survey by Phononic shows that when it comes to grocery stores, what shoppers are really hungry for is technology. Half of the 1,000 shoppers across the United States surveyed say grocery stores haven’t yet figured out how to use technology compared to other retailers, which underscores the disadvantage the sector finds itself in as e-commerce continues to boom. According to Tony Atti, founder and CEO of Phononic, a global leader in solid-state cooling technology, “As e-commerce innovation continues to disrupt brick-and-mortar retail in response to consumers’ desire for a more convenient and personalized shopping experience, traditional retailers are adapting to stay relevant.” One technology that grocery stores are starting to roll out to keep pace with shoppers’ demands is scan-and-go technology. The January opening of Amazon Go in Seattle—the cashier-less convenience store that tracks shoppers’ purchases with sensors then charges their Amazon account as they exit the store—is one such example. Analysts expect that scan-andgo technology will take off this year, with Kroger, Walmart and B.J.’s Wholesale Club among those leading the charge. The technology has improved significantly in the past few years and so too have the features, which can keep a running tally of what shoppers have in their basket and provide detailed information on products, then allow shoppers to bypass the check-out lane, and pay from their phone or stop at a

FOOD LOGISTICS | MARCH 2018

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self-checkout lane or kiosk to complete the transaction. The benefit for the grocery retailer is two-fold: it frees up employees from manning cash registers so they can concentrate on more value-added work, and it saves sizeable investments in hardware because all that’s needed is a downloadable app. Phononic’s survey revealed other insights, especially around convenience. For example, most shoppers (89 percent) want to shop in a grocery store that understands how to make buying groceries an easier and/or more efficient experience, and 92 percent say it’s important that the layout of the grocery store makes it easy to find items. The survey also queried those polled about temperature control and safety. Ninety-two percent say it’s important that there is consistent temperature control for all cold products, and 74 percent say grocery stores should do a better job of letting shoppers know that the refrigerated and/or frozen foods have been kept at a consistent temperature. Indeed, 63 percent polled say they sometimes worry that the food they buy may not be safe and/or clean. While the grocery sector has some catching up to do on the technology front, the rewards for those that are determined to rise to the challenge are worth it when you consider how loyal shoppers are to the retailers that get it right. Enjoy the read.

LARA L. SOWINSKI, EDITORIAL DIRECTOR LSOWINSKI@ACBUSINESSMEDIA.COM

Published by AC BUSINESS MEDIA INC. 201 N. Main Street, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com

WWW.FOODLOGISTICS.COM PRINT AND DIGITAL STAFF Group Publisher Jolene Gulley Associate Publisher Judy Welp Editorial Director Lara L. Sowinski lsowinski@ACBusinessMedia.com Editor John Yuva jyuva@ACBusinessMedia.com Assistant Editor Amy Wunderlin awunderlin@ACBusinessMedia.com Web & Copy Editor Mackenna Moralez mmoralez@ACBusinessMedia.com Contributing Editor Barry Hochfelder Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com Creative Director Kirsten Wiskus Audience Development Director Wendy Chady Audience Development Manager Angela Franks ADVERTISING SALES (800) 538-5544 Associate Publisher (East Coast) Judy Welp (480) 821-1093 jwelp@ACBusinessMedia.com Sales Manager (Midwest and West Coast) Carrie Konopacki (920) 542-1236 ckonopacki@ACBusinessMedia.com National Automotive Sales Tom Lutzke (630) 484-8040, tlutzke@ACBusinessMedia.com EDITORIAL ADVISORY BOARD Jaymie Forrest, Chief Supply Chain and Commercial Officer, ScanTech Sciences Inc. John Haggerty, Vice President of Business Development, Burris Logistics Robert A. Norton, Ph.D., Professor of Veterinary Microbiology, Public Health and Biosecurity, Auburn University; Coordinator of National Security Initiatives, The Futures Laboratory Jon Shaw, Director of Sustainability and Global Marketing Communications, UTC Climate, Controls & Security Smitha G. Stansbury, Partner, FDA & Life Sciences Practice, King & Spalding CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (847)-291-4816 circ.FoodLogistics@omeda.com LIST RENTAL Jeff Moriarty, InfoGroup (518) 339-4511 jeff.moriarty@infogroup.com REPRINT SERVICES Carrie Konopacki (920) 542-1236 Fax: (920) 542-1133 ckonopacki@ACBusinessMedia.com AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich CFO JoAnn Breuchel Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas Published and copyrighted 2018 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without written permission from the publisher.

www.foodlogistics.com

3/9/18 8:16 AM

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11.01.2018 3/9/1806:29:48 8:16 AM

SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN Daily Updates at FoodLogistics.com

CARGILL INVESTS IN FACIAL RECOGNITION DRISCOLL’S NEW TECHNOLOGY IMPROVES FLAVOR AND FOOD SAFETY

Driscoll is turning to emerging technologies to produce hardier plants and fortify its supply chain. The company receives, cools and ships as much as 30 million pounds of berries a week during peak season. Artificial intelligence- and machine learning-based analytics will be able to help Driscoll find patterns in the data it collects, cutting its discovery and development time. Driscoll is considering public cloud services as foundation technology for the analytics solutions. Whichever platform they use must be able to manage data from Driscoll’s supply chain. The company collects location, time, temperature and humidity from hundreds of Bluetooth-enabled GPS sensors in coolers that they company uses to haul fruit by truck. If the temperature gets too warm, Driscoll will get an alert and contact the driver to take action before a problem occurs.

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Cargill Inc. is investing in an Irish start up that uses facial recognition software to help increase the productivity of dairy cows. Cainthus, which harnesses machine-learning and imaging techniques to identify cows, chose Cargill as an investor because of their foot print in agriculture. In the last few years, Cargill has built a stronger presence in the farming industry by finding ways to advance technology.

FDA, USDA ANNOUNCED PARTNERSHIP TO IMPROVE FOOD SAFETY

FDA, USDA announced a collaboration to improve food safety. The formal agreement outlines efforts to increase effectiveness and efficiency in produce safety and bio-technology. Over the years, the agencies have worked closely together to oversee the nation’s food supply. The USDA oversees meat, eggs, poultry and catfish. The FDA oversees all other food like dairy, seafood, produce and packaged goods. The agreement is the agencies’ newest initiative to take new steps to streamline regulatory responses and use government resources to protect public health. The agreement also calls for the FDA and the USDA to enhance their collaboration and cooperation on produce safety activities. The FDA is implementing the FDA Food Safety Modernization Act (FSMA), which shifts the food safety paradigm from one of reaction to prevention of foodborne illness. Under FSMA, the FDA coordinates with state and/or territorial government agencies, which will conduct most farm inspections under FSMA’s Produce Safety rule.

HOUSE VOTES TO LOOSEN MENU LABELING RULES

The House voted to loosen Obamacare rules that mandated calorie counts and other nutritional information be available to customers in restaurants and super markets on Feb. 6. Under the Common Sense Nutrition Disclosure Act food retailers will no longer have to disclose the calories or nutritional information for every combination of food. The Food and Drug Administration first created rules that stated that menus should have the calories available for people to see. Retailers against the rule said it was unnecessary and expensive to show nutritional information for made to order meals. The new bill passed 266157 and allows food retailers to provide nutritional informational online as long as people are ordering for delivery. The bill also guts criminal penalties against companies for failing to comply.

DORITOS RECEIVES SOCIAL MEDIA BACKLASH AFTER ‘LADY-FRIENDLY’ CHIPS ANNOUNCEMENT

In a podcast interview with Freakonomics, PepsiCo. CEO Indra Nooyi commented on the way gender differences are helping develop future products of Doritos. Nooyi suggested in the interview that women don’t like to crunch the chips that they’re eating too loudly or lick seasoning off of their fingers. Nooyi continued to explain that the chip brand wants to change its packaging for women because “women love to carry a snack in their purse.” The news of the gender-specific chips went viral and created a sea of backlash against the company on social media. Various users wondered if the announcement was satirical, while others criticized the company for conforming to gender norms. www.foodlogistics.com

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SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN Daily Updates at FoodLogistics.com

TAYLOR FARMS COLLABORATES WITH SUPPLIERS TO DELIVER GREATER VALUE TO CUSTOMERS

ASIA HELPS FILL THE MAINE LOBSTER SALES GAP

The 36 percent increase offsets the Maine Lobster losses in Europe, which spent $40.3 million less on live lobster last year. A trade deal with Canada makes it cheaper for Europeans to buy from them. Current lobster dealers in the U.S. are concerned that Asia could see the low prices that Europe is paying from Canada and either start buying from them or negotiate lower prices from America. Asia cannot absorb the amount of lobster that was once bought by Europe. Asian customers prefer larger crustaceans than what was previously bought by Europe. It is also unlikely that the live lobsters are hardy enough to continue surviving the trip to Asia.

Over the next year, Taylor Farms will be leveraging the rapid expansion of more than 150,000 square feet of refrigerated space in Laredo, Texas. This additional space gives the company the ability to store and refrigerate a more diversified product mix from a variety of industry leading growers and shippers. “Providing solutions to increase efficiencies and lower costs for our customers is one of our top priorities. The ability to consolidate Taylor Farms’ products with fresh produce from other suppliers in a centrally located region in the middle of the U.S. creates a unique opportunity to save time and money,” said Luis Amaral, Mexico Business Manager, Taylor Farms. Through collaboration with other best in class suppliers, Taylor Farms continues to develop a platform that creates substantial value for the company’s customer partners. This new consolidation program, not only adds convenience and freshness but it also mitigates some of the impacts of the newly implemented electronic logging devices (ELD) law that will be 100 percent enforced on April 1, 2018. Given the perishability of fresh produce, every second counts. The benefit of the consolidation program will reduce time and increase efficiencies by eliminating the need for trucks to conduct multiple pick-ups. Ultimately, this will maximize the utilization of the carriers legal driving hours by reducing wait times.

U.K. KFCS RUN OUT OF CHICKEN

United Kingdom’s KFCs are currently in the middle of a chicken shortage, causing twothirds of its restaurants to temporarily close down. The remaining operating stores having a limited menu and are open for fewer hours. An exact cause for the delivery problems haven’t been released, but reports in the U.K. are blaming the delivery service DHL. “Due to operational issues, a number of deliveries in recent days have been incomplete or delayed. We are working with KFC and our partners to rectify the situation as a priority and apologize for any inconvenience this may have caused,” DHL said in a statement. www.foodlogistics.com

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MARCH 2018 | FOOD LOGISTICS

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SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN Daily Updates at FoodLogistics.com

50,000 MEALS WERE DELIVERED TO PUERTO RICO THROUGH FEMA CONTRACT

MAXWELL CHASE INTRODUCE PACKAGING SOLUTION FOR EXTENDING SEAFOOD SHELF LIFE AT SEAFOOD EXPO

Hurricane Maria had Puerto Ricans struggling with access for food and water in the aftermath. Nearly 85 percent of Puerto Rico’s food is imported and ports were shut down, and citizens relied heavily on emergency aid. For this task, the Federal Emergency Management Agency (FEMA) called on Tiffany Brown, who had no experience in large disaster relief, for help. Tribute had only delivered 50,000 meals to Puerto Rico by Oct. 23 when 18. 5 million were due. FEMA solicitation required self-heating meals, and the ones that Tribute had delivered were packaged separately from the pouches used to heat them. This error caused Brown’s contract to be terminated for late delivery of approved meals.

3M FOOD SAFETY’S TWO-IN-ONE 3M PETRIFILM PLATE REVEALS NEXT-DAY RESULTS FOR E. COLI AND COLIFORMS

3M Food Safety introduced the 3M™ Petrifilm™ Rapid E. coli/Coliform Count Plate, a two-in-one indicator test that gives the customer both an E. coli and total coliform count in 18-24 hours, allowing processors to operate more efficiently and ship their products sooner. “Our aim, always, is to develop highly accurate tests and technologies that result in less waiting and increased efficiency for our customers,” said Chris Somero, 3M Food Safety marketing manager. “This new plate is an allin-one, easy-to-use chromogenic solution that can immediately boost productivity and accelerate their products’ time to market.”

CHEP LAUNCHES NEW ADVANCED CONTAINER MANAGEMENT FACILITY

CHEP recently opened its newest container service center just outside Los Angeles. The larger space, optimized layout and investment in state of the art semi-automated cleaning equipment are key enablers to support CHEP’s growing west coast customer base and ensure just-in-time availability of high-quality sanitized containers. With consumers driving industry improvements in food safety and sustainable business practices, CHEP has implemented key innovations to better align with their customers’ values and goals. The new CHEP facility in Redlands boasts a high-efficiency hot water pressure washing system in combination with organic drain-safe cleaning chemicals to reduce the environmental impact and ensure consistent quality.

WALMART SWIPES RIGHT ON GROCERIES

Walmart filed a patent for a grocery shopping service that functions like the popular dating app Tinder. Like Tinder, shoppers would be able to swipe right or left to accept or reject produce picked by Walmart employees. Solving a problem that most consumers have when it comes to grocery delivery services, they aren’t able to see the product they’re purchasing.

FOOD LOGISTICS | MARCH 2018

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Maxwell Chase debuted SeaWell™ Seafood Trays, a first-of-its-kind active packaging solution that significantly extends the shelf life of seafood, at Seafood Expo North America in Boston. The SeaWell™ seafood trays feature integrated absorbent technology incorporated into wells at the bottom of trays to absorb excess fluids. This technology reduces exposure to fluids and lessens potential damage to seafood products. The packaging system increases freshness and visual appeal, absorbs odors and enhances safety. “Quite simply, the new SeaWell seafood trays have the potential to revolutionize the seafood industry,” said Neal Watson, General Manager for Maxwell Chase. “They represent a game-changing technological breakthrough offering superior product protection for customers’ high-value seafood products. The result is extended market reach, enhanced brand recognition and improved consumer experiences.”

C.H. ROBINSON SUPPORTS FOOD DESSERTS

North Market, a grocery store that unites three elements of community health: nutritious food, health care services, and wellness events and education, opened its doors in Minneapolis. The C.H. Robinson Foundation is a founding partner of the market, and will hold a seat on its advisory board. “Myself and the grants committee felt strongly about supporting this new kind of grocery store,” Noah Hoffman, general manager at Robinson Fresh said. “North Market provides access to healthy food and food assistance to its community, something we’re very passionate about supporting.” www.foodlogistics.com

3/8/18 8:23 AM

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3/8/18 8:23 AM

FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

GROCERY STORES LOOK FOR NEW IDEAS AS AMAZON PRIME EXPANDS

Amazon recently expanded Prime Now so that customers can have their groceries delivered to them in less than two hours. Grocery stores are turning to new digital efforts to try and compete with the e-commerce giant. Walmart is in the developmental stage of an app that will let users swipe left or right on their device to find their groceries and Target has recently launched same day shipping with Shipt. Instacart is particularly threatened by Amazon’s expansion, and recently announced another wave of financing. The delivery service signed a five-year deal with Amazon back in 2016, but now finds itself competing with Amazon couriers.

FOOD AND BEVERAGE COMPANIES INTERESTED IN NEW ELECTRIC TESLA TRUCK Since its unveiling in November, a growing number of food and beverage companies have pre-ordered Tesla’s new electric semi-truck. PepsiCo put in an order for 100, Anheuser-Busch ordered 40 and Sysco has taken 50. Most food suppliers organize deliveries on a hub and spoke model. Product travels shorter distances, so long-distance hauls in diesel powered vehicles is not an issue. The Tesla semis will have dedicated infrastructures where they would be able to charge.

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PORT TAMPA BAY AND PORT LOGISTICS REFRIGERATED SERVICES WELCOME FIRST SHIPMENT OF PERISHABLES

Port Logistics Refrigerated Services (PLRS), Port Tampa Bay’s newest tenant and the operator of a new state-of-the-art cold storage facility, confirmed that it received its first shipment of perishable products. More than 3,900 pallets of bananas from Ecuador were delivered from the MV Wild Lotus and were unloaded at Berth 219 adjacent to the new PLRS 135,000-squarefoot refrigerated warehouse. “Port Logistics Refrigerated Services is proud of its ability to handle the first delivery of bananas through the Port in almost two decades. Our brand new refrigerated terminal efficiently handled the transfer of the 3,900 pallets of bananas. I expect this will be the first of a long line of diverse frozen and refrigerated food products to move through our terminal with destinations to central Florida and the southeast U.S. It also validates the public-private partnership in bringing this terminal to reality,” Richard Corbett, financer of the PLRS terminal said. www.foodlogistics.com

3/6/18 8:50 AM

FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Signs that Rates May Rise Again By Mark Montague Mark Montague is senior industry pricing analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates, and routing for more than 30 years. Mark is based in Portland, Ore. For information, visit www.dat.com.

Spot truckload rates for van and refrigerated freight started the year at record highs. The national average van rate was $2.26 per mile in January, up 15 cents compared to December and 59 cents higher than January 2017. January’s spot rate also exceeded the average contract rate by 14 cents, meaning that carriers earned more for one-time loads from freight brokers than for longer-term contracts with shippers. On the reefer side, the national average rate of $2.66 per mile was 18 cents higher month over month and 71 cents higher compared to January 2017. The spot rate was 31 cents higher than the average contract rate, an extraordinary gap. Rates have fallen steadily away from those highs in recent weeks. But there are signs they could rise again soon: • February is always a slow month for

truckload freight. But rates remain elevated and volumes on many lanes are higher than they were at this time a year ago. • The “phase-in” period for the electronic logging device mandate ends on April 1. This means that truckers will actually be placed out-of-service if they don’t have a compliant ELD in their truck, instead of just a fine. • The April 1 ELD enforcement date coincides with the end of the first quarter of 2018 on March 31. If capacity tightens like it did when the mandate started in December, prices could spike again just when shippers are in a rush to move freight before they close their books.

March is a transitional month as we move from the short days and short month of February into the better weather and busier retail environment of April and May. The question is whether truckers who don’t have ELDs will make the transition, too, or take their capacity out of the market.

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MARCH 2018 | FOOD LOGISTICS

3/6/18 8:50 AM

FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

FOOD COMPANIES EXPERIENCE HIGH COST OF MOVING PRODUCT

A chronic driver shortage, the impact of the ELD mandate, and rising fuel costs are all contributing to U.S. food companies’ lowering profits. Moreover, these factors are making it increasingly more difficult and expensive to transport products to stores. An increase in truck rates implies a 15 basis point gross margin for U.S. food companies. Freight usually accounts for 5 percent of cost of goods sold. J.M. Smucker and Campbell both warned that freight issues would hit margins. Shippers are starting to have limited flexibility to move shipments based on truck availability, creating an increase on market rates.

TRUMP ADMINISTRATION WANTS TO DELIVER FOOD TO SNAP RECIPIENTS

The Trump administration is looking to change the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. Under the new proposal, SNAP recipients would lose the ability to choose the food they buy. Under the proposal, low-income Americans who receive at least $90 a month would get half of their benefits in the form of a “USDA Foods Package” consisting of shelf-stable milk, cereal, pasta, peanut butter, beans and canned fruits. The boxes would not include fresh fruits or vegetables. It is also unclear if recipients who receive the boxes will get instructions on how to prepare certain foods. The proposal has been mocked by people who believe the government will struggle handling the logistical task of keeping track of the millions of people in the program and the shipping side of the boxes. Critics also claim that it would take twice the amount of government to deliver food boxes and EBT cards.

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LARGEST VESSEL TO CALL PHILAPORT ARRIVES FROM THE WEST COAST OF SOUTH AMERICA LADEN WITH PERISHABLES

The largest container vessel to ever call PhilaPort arrived at the Packer Avenue Marine Terminal in mid-February. The M/V MSC Shuba B arrived from the West Coast of South America with a cargo of predominately perishable fruit. The origin of most of the cargo was from Chile and Peru, which included table grapes, peaches, plums, pears and blueberries. “Being able to handle a 12,200 TEU container capacity vessel is a game changer,” said Jeff Theobald, executive director and CEO of PhilaPort. “This size of vessel is increasingly being used as the workhorse for shipping lines around the world. It’s the reason why we are working so hard to make the necessary capital improvements, which we have planned as quickly as possible.” PhilaPort is currently implementing a $300 million infrastructure improvement plan, which includes wharf strengthening, new cranes, paving and many other terminal improvements. “It’s great to see this new class of vessel here before we have our new cranes and the official opening of the new deeper channel,” added Tom Holt, President of Holt Logistics.

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3/6/18 8:50 AM

COOL INSIGHTS

BY GREG LEHMKUHL

TOP 3 TRENDS FACING THE COLD CHAIN INDUSTRY I LEHMKUHL

Greg Lehmkuhl is CEO of Lineage Logistics, a leading international warehousing and logistics company.

n recent years, the food industry has faced a number of exciting and dramatic changes to its supply chain, fueled mostly by rapidly shifting consumer demands. Consumers are increasingly focused on the food retailers’ “perimeter” real estate, which includes foods that generally require temperature-controlled storage throughout the supply chain. The opportunity for those bold enough to disrupt the industry has not gone unnoticed, with e-commerce giants like Amazon entering the space and a rapid ascension of deep discount food marketers. From the deployment of automation and robotics in warehouses to new innovative ways to manage energy, ideas that were once confined to brainstorming sessions and office whiteboards are now getting the significant investment they need to be deployed in the supply chain. So, what innovations and trends are poised to have the greatest impact on our industry in the next three to five years? Lineage Logistics has built up a healthy obsession for discussing this topic, so I will outline our current top three.

Turning Data Into Actionable Insights TREND #1:

By leveraging the significant work to date within Silicon Valley, the cold chain is already greatly benefiting from the power of data

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analytics, artificial intellioutbound, and ensure we Ideas once gence and deep learning, leave a customer’s product confined to which quickly and accubrainstorming in the same condition we rately collect data from received it. sessions multiple sources and then At Lineage, we are are now convert that information deploying enterprise getting the into actionable knowledge. technology that helps us investment Utilizing applications from collaborate with both our needed to be the Internet of Things shipper customers and our deployed in the revolution, we can give third-party logistics (3PL) supply chain. managers a more complete partners to ensure that view of operations and the every product moves from extended logistics chain, enabling the point of production to the point more precise control over the enviof purchase efficiently and with its ronment in their buildings. integrity intact. For example, Lineage deployed TREND #3: Complete and hundreds of temperature senSeamless Outsourcing sors throughout our Mira Loma, California facility to give our team Food suppliers are increasingly constant visibility into the operarealigning their operations to focus tions of the refrigerated systems. on what’s really core to their busiWe can maintain a level of tempera- ness: growing and producing food. ture control and efficiency that is As a result, they are increasingly unmatched in the industry—utilooking for high-quality partners to lizing energy to cool the facility take over their supply chain needs during non-peak periods, such as at and become seamless extensions night, and not doing so during more of their internal teams. Partnering expensive daytime energy periods. with supply chain solutions providThis allows us to lower energy costs ers gives customers the ability to and place less stress on the local leverage progressive technologies. energy grid. Temperature-controlled supply chain providers can better focus on TREND #2: Improving the logistical challenges of shippers Speed and Visibility and receivers across the modes The market continues to demand of transportation, incorporating faster velocity, better service and NVOCC services, expanding teams greater efficiency. Leading supply with experienced professionals, chain providers must deploy syssharing productivity enhancetems that can provide clients with ments, and incorporating the latest product visibility and control in technology. near real time. With so much change underway The saying, “A chain is only in all facets of the cold chain indusas strong as its weakest link,” is try, one cannot help but be excited especially appropriate in the supply for what lies ahead. We should all chain industry. We must keep be committed to doing our part precise delivery windows with our to bring these exciting changes to carrier partners, both inbound and reality. www.foodlogistics.com

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COVER STORY

BY MARY SHACKLETT

IoT GAINS A FOOTHOLD

IN FOOD SUPPLY CHAINS From farm to fork, the Internet of Things has quickly integrated into every link of the food supply chain.

 A ZIPR Iot monitoring tag is attached to a pallet of strawberries.

s Internet of Things (IoT) enabled sensors, barcodes, scanners, automation and analytics first made their way into the industry, the vision for the food supply chain was that IoT technology would integrate into virtually every aspect of food operations from farm to fork. Now, it is finally happening.

On the Farm To avoid waste in the field, agricultural producers have been focusing on ways to improve crop yields. Part of this effort is being devoted to a relatively new practice: precision agriculture (PA). Precision agriculture is a farming method that takes into account the variability of soils, pests and crop yields depending on which portion of a field you are working. Because fields vary in terms of soil types, moisture content, contour

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and crop yield, how you plant corn over an entire area will also have to vary depending on your location The next step is to translate in the field. these results into ways that a “To improve yields, producers producer can variably spread use grid soil sampling to assist them different proportions of fertilizers in dealing with soil variability,” on different areas of a field based explains Carl Crozier, professor of on the variability of soil, moisture, crop and soil science topography and so on. We are still and extension specialist To do this efficiently, at North Carolina State seeing 30 to 40 spreaders and other University (NCSU). percent food types of farm equipment “They take various soil waste levels now come with software samples from different and IoT sensors that can post harvest. And areas of a field, mark link into the geospatial half of this waste these samples to the coordinations of the is occuring before locations they were different locations in food even gets to taken from, and then the field and adjust the consumers.” send the samples into fertilizer mix to fit the Peter Mehring, the lab for fertilizer and individual prescriptions CEO, Zest Labs lime recommendations. for these locations. Once these are available, a map “In the future, we will expand the of the field showing their spatial use of mounted cameras and view variability must be created to guide fields from above with UAVs (unprecision management.” manned aerial vehicle),” adds NCSU associate professor of crop and soil sciences Jeff White. “This will aid farmers in detecting anomalies in the fields, such as variances in moisture or color—like when they see a yellow spot in an otherwise green field. Spectral analysis of blue, green, red and near infrared bands can be employed for the detection of nitrogen content and fertilizer need. This will help farmers achieve more granular levels of precision agriculture, so they can begin asking themselves whether they should add more nitrogen to certain areas of their fields.” www.foodlogistics.com

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Food on the Move Once the food leaves the farm, it enters into a stream of logistics, which can include warehousing, distribution and delivery to retailers. “There is much to do in this area, because we’re still seeing 30 percent to 40 percent food waste levels post harvest, and half of this waste is occurring before food even gets to consumers,” says Peter Mehring, CEO of Zest Labs, an AgTech company introducing IoT technology into the post-harvest fresh food supply chain to improve food safety and reduce food waste. Mehring believes that food wholesalers and retailers can improve their profit margins and reduce food waste by 50 pecent or more by using more IoT sensors and real-time analytics for food tracking and monitoring. “Often, companies will attach sensors for tracking and monitoring to pallets, but not to the products themselves,” says Mehring. “What we really want to know is what the temperature and humidity conditions are with respect to the products, not to the ambient conditions of the environment a pallet is in.” Karl Deily, president of food care at Sealed Air, which provides packaging solutions for foods and other industries, explains how more product-specific monitoring for spoilage prevention in food processing plants can be put into product packaging. www.foodlogistics.com

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“A load of strawberries might come into a processing plant on the same date from the same field. You would assume that these strawberries would all carry the same expiration date, but there is a big freshness difference between strawberries that are picked in the cool of the early morning and those that are picked later in the day,” explains Deily. Strawberries picked during cool early morning hours are likely to respirate less than the strawberries picked in the afternoon. “The less the strawberries respirate, the longer they will be fresh,” he adds. In the processing plant, IoT sensors can monitor fruit respiration rates and freshness so that packaging with more respiratory perforations is prepared for the fruit that is respirating at a higher rate, while fresher fruit that is respirating at a lower rate is wrapped

with packaging that contains fewer respiratory perforations. “This is a way that we can adjust packaging to the conditions of particular products to preserve freshness and reduce spoilage,” says Deily.

 The Zest Intelligent Pallet Routing Code or ZIPR Code provides realtime data about the condition of produce.

From Farm to Fork Once food arrives at distribution points, it is transported to retailers via truck, rail or plane. IoT plays two major roles in this process: • First, it geographically tracks progress of goods to market, while feeding analytics systems that help determine the safest and speediest routes. • Additionnally, it continuously measures the environmentals of the interiors of refrigerated trailers and the interiors of packages and containers that store meats and produce. If the seal of a container is broken, or MARCH 2018 | FOOD LOGISTICS

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COVER STORY

If the sensors are attached inside the cases with the product, you have a much more

accurate picture of the state your cargo is in.” Peter Mehring, CEO, Zest Labs

continued

temperature and humidity controls within the container fail, the sensors issue immediate alerts to supply chain managers so the situation can be mitigated. Together, these food track, trace and control mechanisms reduce spoilage and maintain the traceability of foods from farm to table. “You want to be able to collect sensor data at the level of the product,” says Mehring. “If a pallet of fruit is not pre-cooled and it is placed into a 34-degree Fahrenheit trailer, all of that fruit will be respirating at a higher rate and generating heat, which creates a situation where the fruit will spoil sooner. But if the sensors are actually attached inside the cases with the product, the true temperatures that the products are maintained at can be measured, and you have a much more accurate picture of the state that your cargo is in and how much time you have to get it to market.” Mehring says that Zest has developed a “ZIPR” (Zest Intelligent Pallet Routing) Code that dynamically calculates the freshness of each pallet tracked. “We use a patented methodology and sensors for this purpose, and the goal is to ensure that the inventory and shipping decisions that supply chain managers make are based on actual food freshness for each and every pallet.” The ZIPR Code can tell a California producer in an eyeshot whether a product is fresh enough to be shipped across country to Boston, or whether freshness is already reduced and the manager needs to seek out a local market. By working with these predictive analytics, the producer can ship product expediently and effectively—and reduce food waste. “Food waste is an important part of the food supply chain discussion—not only for producers, transporters and distributors, but

FOOD LOGISTICS | MARCH 2018

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HOW BLOCKCHAIN WILL REDUCE FRAUD IN THE SUPPLY CHAIN By TranSolutions Inc.

WHAT IS BLOCKCHAIN? A blockchain is a list of transactions—an electronic ledger tracking the movement of assets from one person or place to another. What makes the blockchain unique is that this ledger isn’t stored by one central authority; it’s stored and maintained by a network of people, each with an identical copy of the ledger. This distributed nature means that the blockchain cannot be changed, altered or destroyed. It also means that all transactions are fully transparent and can be viewed by anyone. These traits make it an excellent tool to tackle fraud. While blockchain has gotten attention due to its connection to the cryptocurrency Bitcoin, the technology isn’t limited to financial transactions. The ledger can be used to track the movement of any asset, such as products throughout the supply chain.

TRACKING UNETHICALLY CAPTURED SEAFOOD Tracking the source of fish in the supply chain is a huge issue. There have been numerous reports of slave labor being used to catch and process seafood, which has gone undetected and then ended up in major grocery stores. The issue of sustainably-sourced fish, versus fish caught with cheap but environmentally destructive methods, also is of concern. Using the blockchain, fishermen could send a text message to enter their catch into the ledger. Then, anytime the fish was transferred, such as for cleaning or canning, that move would also be recorded on the blockchain. Currently a company called Provenance is working on a pilot project, which would even allow consumers to check the source of their meal on their smart phones.

FICTITIOUS PICKUPS Fictitious pickups is another source of fraud that could be made obsolete by blockchain. In a fictitious pickup, a freight thief uses false documents to impersonate a legitimate driver, and then leaves with the freight. Blockchain technology could combat this by making documentation easily verifiable and impossible to fake. In fact, there are already dozens of companies using blockchain for identity management. The blockchain would also show a clear history of the carrier’s deliveries—again information which could not be faked.

REDUCING BUYERS FOR STOLEN FREIGHT While it’s a long way away, one day we could see all products tracked on the blockchain. One of the ways to cut down on freight theft is to make it more difficult for thieves to find buyers. If all products could be accessed in a transparent database using barcodes or RFID, then it would be simple to audit any vendor for selling stolen goods. If the ID didn’t pull up a record on the blockchain, police would start asking questions. Or, it could even pull up a record that was reported as stolen. Wholesalers and distributers would, in turn, require authentication of the source of goods on the blockchain before purchasing. The transparency would eventually make it very difficult for freight thieves to find buyers for their goods.

for the retailers and consumers themselves,” adds Mehring. “Many of the retailers we work with, for example, expect a 30 percent waste level with lettuce of all different types. They see a harvest date on

the lettuce and expect a 10-day shelf life based on this date, but only one-third of the lettuce they source makes this date. Most of these retailers tell us that they get an average of 6 1/2 days shelf life www.foodlogistics.com

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COVER STORY

continued

 IoT condition monitoring tags collect information about a product to determine freshness and enable intelligent pallet routing.

for lettuce, regardless of what the expiration date says. This is where understanding the true ZIPR Code (or remaining freshness of products at harvest) and determining the best destinations to avoid spoilage can make an impact.” The food freshness journey doesn’t stop at the retailer, however. Today’s smart refrigerators also aid consumers in managing their food freshness and avoiding spoilage. These smart refrigerators can Product quality read everything checks must from a single lago beyond bel on a product, simply obtaining a including where certificate of quality the product analysis at the point came from, what of loading.” ingredients it Stefan Reidy, CEO, contains, and Arviem Switzerland what its current freshness is. The refrigerated appliance can even recommend to consumers which foods to eat first in order to avoid waste. But just how important is this to today’s consumers? In a 2016 Trace One survey, 68 percent of consumer respondents said they wanted to know more about what was in their food and where it came from. Food tags and IoT readers and sensors in smart refrigerators help them obtain that information.

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analysis at the point of loading,” says Stefan Reidy, CEO of Arviem Switzerland, which provides real-time cargo monitoring and tracking solutions. “When food spoilage and contamination are some of the biggest concerns in food supply chains, visibility should not end with suppliers of raw materials or intermediate goods. Food manufacturers must be able to monitor what’s happening to their shipment while in transit to see whether the goods were transported and stored under proper temperature conditions.” Unfortunately, not all food manufacturers have adopted IoT to help with this problem, and many small producers and manufacturers lack funds to pursue IoT aggressively. This helped contribute to more than 20 million pounds of food being recalled in the United States in 2017, according to USDA statistics. Industry executives like Reidy maintain that monitoring goods with IoT sensors during transportation “enables food manufacturers to verify the quality of ingredients before they are incorporated

Product Recalls IoT technology also can be a major deterrent to food recalls. A food recall, whether due to spoilage, contamination or other factors, can have a multi-year or even a permanent effect on a company’s brand and reputation. More importantly, it is a threat to public health. “Today, when food safety risks could be reduced via end-to-end supply chain visibility, product quality checks must go beyond simply obtaining a certificate of quality

IoT FAST FACTS THE FOOD INDUSTRY LOSES ABOUT

APRIL 2016

$11.1 trillion

ESTIMATED ECONOMIC IMPACT THAT THE IOT COULD REACH

by 2025. MCKINSEY

$160 billion AUGUST 2017 SURVEY OF 84 FOOD AND GROCERY COMPANIES FOUND THAT

A YEAR IN WASTED FOOD.

IN 2018

IoT=

37% 15% are trying increase out IoT OR HAD ALREADY SUCCESSFULLY IMPLEMENTED IT. IDG

PREDICTION IN MANUFACTURING PRODUCTIVITY IN TERMS OF INNOVATION AND SUPPLY CHAIN PERFORMANCE. IDC

www.foodlogistics.com

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into a product. Moreover, during a of what others in your situation are it total visibility for food tracking recall event, traceability of prodor have done with it successfully. If and tracing. If you’ve got IoT at your ucts accelerates the investigation you don’t have the expertise, you processing plant and in your logisprocess, enabling professionals to can also benefit by looking for a tics operations, but you don’t have identify the reasons for spoilage or vendor that has the right technolit at some of your smaller farmcontamination.” er-producers, the A combination With the growth of IoT and other technologies in the supply chain, links of the supply of barcoding and there is every reason to aim for better results.” chain are broken smart labeling and you don’t Peter Mehring, CEO, Zest Labs technologies; have uninterIoT sensors for rupted visibility. environmental and food safety ogy and the expertise, and that can This is an area where you might be factors during transport, yarding be a good business partner,” says able assist your suppliers with IoT and warehousing; and use of cloud- Sealed Air’s Deily. implementation, or possibly even based technology to store and Second, when you find an IoT with financing. process the results from continsolution that you feel can assist Fourth, if you are a retailer, don’t uous track and trace of foods can you with food freshness and supply assume that you have to accept reduce the risk of food spoilage and chain issues, trial it first. “The good food waste at previous levels. “We contamination, improve consumer news about much of this technology get called in when a retailer has an health, and protect companies from is that you can start with a relativeacute problem. They already expect brand and reputation damage—not ly modest investment, and see if to lose points on their margin from to mention lawsuits. it proves out your business case,” food waste,” says Mehring. “But explains Mehring. with the growth of IoT and other Next Steps Third, talk with your suppliers. technologies in the food supply “One of the best ways to expand The end goal of the food supply chain, there’s every reason to aim your use of IoT is to become aware chain is to give everyone vested in for better results.”

www.foodlogistics.com

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Mary Shacklett is the president of Transworld Data, a technology analytics, market research and consulting firm. Prior to founding the company, she was vice president of product research and software development at Summit Information Systems. She may be reached at mshacklett@ twdtransworld.com.

MARCH 2018 | FOOD LOGISTICS

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3PL/REFRIGERATED LOGISTICS

BY AMY WUNDERLIN

TRACK AND TRACE GETS A TECHNOLOGICAL UPGRADE “L

Advancements in sensors, wireless data and cloud computing provide unprecedented levels of visibility as consumers continue to demand more.

ife is about the journey, not the destination,” the saying goes. The same principle can be applied to the food and beverage industry. While the destination—whether it’s a grocery store, restaurant or convenience store—is obviously the goal, what happens on the journey from beginning to end has become increasingly more important. Consumers want more transparency into where the food they’re eating comes from, while at the same time regulations such as the Food Safety Modernization Act (FSMA) are requiring it. Luckily, advancements in technology are making it easier for producers, distributors and consumers—and everyone in between—to track and trace food along each step of its journey. Below, Food Logistics looks at some of the technologies influencing the industry in 2018.

Real-Time Visibility into Trailers and Assets Samsara, a provider of Internet-connected sensor systems, recently expanded its offerings to include solutions for trailer tracking

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and industrial asset monitoring. Their AG24 IoT Gateway, a solar-powered wireless device, brings the benefits of the Internet of Things (IoT) to mobile and distributed assets, such as semi-trailers, heavy equipment, rail cars and generators. Midwest food distributor CashWa Distributing, a Samsara customer that was provided early access to the AG24, sought a track and trace solution at the request of customers who wanted more information on product temperature and integrity throughout the delivery process. “We wanted to assure our customers that when (their product) leaves our temperature-controlled and monitored cooler or freezer, it goes into a precooled trailer, which has temperature monitoring in the freezer and in the cooler compartment at the same time, and we are alerted if that temperature gets out of the range that is safe or wholesome,” explains Jim Hoss, vice president of operations and transportation at Nebraska-based Cash-Wa Distributing. “(With Samsara) we are assuring our customer that product is at the optimal integrity that they can serve to their customers.”

 Samsara’s AG24 IoT Gateway brings the benefits of IoT to mobile and distributed assets such as semi-trailers.

An investment in a temperature monitoring solution is a large and substantial decision for any trucking company. And while Cash-Wa’s customers were already asking for it, regulations like FSMA pushed them further in Samsara’s direction. “(FSMA) definitely helped us make the decision to pull the trigger… we were already investigating this direction, but it made us react probably six to 12 months sooner than we would have normally,” adds Hoss.

Synchronization of Data Traceability is only as good as the data that goes into it. FoodLogiQ is making it easier for companies throughout the food supply chain to share, exchange and analyze data with a software platform rooted in the GS1 Standards. GS1 is a global set of standards that provides the foundation for clearer business communication in an increasingly complex food supply chain. By using GS1 Standards, FoodLogiQ ensures www.foodlogistics.com

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“that everyone is speaking the same language across the platform,” says Katy Jones, chief marketing officer at FoodLogiQ. FoodLogiQ’s community-based platform enables accurate data from a cost synchronization by allowing their efficiency customers to onboard all of their suppliers and supply chain partners, standpoint ensuring all data is consistent and for a food based on the standards. “They business is really send them an invitation; they get a important.” log-in. And so, everyone across the Katy Jones, chief supply chain can get access to the marketing officer, FoodLogiQ platform for free, with the customer paying for the annual subscription,” explains Jones. She adds: “We stitch that data together and offer a node-based visualization of the supply chain, so every critical tracking event that is gathered is logged as a node.” From a food safety standpoint, the ability to view the significant tracking events of each of your supply chain partners has huge implications for responding to recall events—something that can cripple a brand if handled poorly. “The ability to execute a recall in a very precise manner is certainly something that from a cost efficiency standpoint for a food business is really important,” The ability to execute a recall in a very precise manner is certainly something that

FOOD LOGISTICS | MARCH 2018

Jones notes. “We’ve seen in some of these major recalls that these events can be catastrophic. They can put companies out of business. And so, from a brand protection standpoint it’s critical to be able to know with a great deal of accuracy which product needs to be extracted, as opposed to just having to pull everything.” But traceability is about more than food safety. There also is potential for brand marketing in being able to offer a reliable view of the supply chain from farm to fork. “Consumers are becoming much wiser now in that they’re wanting to really understand and know exactly where that food is coming from. Traceability can help you achieve all of those things, from brand protection to proactively engaging with your consumers in a really authentic way,” says Jones. The empowered consumer has made way for significant growth and interest in traceability as a whole. Across the supply chain, Jones says they are no longer hearing, “Why do I need to do this?” But instead, “How can we work together to get this done? “Traceability is not a new concept in the industry, but I think we’re seeing a lot more excitement and understanding for its value,” Jones adds. “Companies are recognizing it,

and again, taking advantage of that in a very transparent way. The ones that are able to do that are the ones that are succeeding.”

The Internet of Packaging The likes of Coca-Cola, Mondelez and General Mills, to name a few, have already jumped on the SmartLabel bandwagon. The initiative is a program created by manufacturers and retailers that enables consumers to get additional details about a wide range of food, beverages, pet care, household and personal care products, simply by scanning a barcode. In October 2017, a provider of SmartLabel QR Codes, Scanbuy, partnered with Kezzler, a technology company specializing in the serialization of products or packages, to bring the Internet of Packaging (IoP) to the SmartLabel program. By combining the SmartLabel with Kezzler’s unique digitization of products or packaging, companies are able to provide product traceability, supply chain optimization and robust marketing insights. Working together, a Scanbuy QR Code placed on a product package links the consumer to the respective SmartLabel landing page via a scan with their mobile device. When the same QR Code is scanned for a business operation,

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and a level of transparency that is simply not possible just printing on a pack,” says Thomas Kormendi, former CEO of Kezzler. Kormendi was replaced by Christine Charlotte Akselsen in February after taking on the position as global CEO of the Elopak Group. “If you combine the value of Scanbuy and the value that we can then provide, i.e., you can make that QR Code on the pack unique, you would on one hand get all the SmartLabel

companies gain full distribution visibility and insights to all stages of the product lifecycle through the Kezzler platform. “Scanbuy is instrumental in helping U.S. brands implement SmartLabel, a system which gives the consumers a far better understanding of what products contain

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information and the transparency around the product features and content, but on the other side, you will also be getting much more, meaning you will be able to get data to say this product was produced when,” Kormendi explains. The ability to access and analyze this information is especially important in a growing counterfeit industry, which has significant impacts not only on revenue and brand reputation, but food safety as well. While most picture knock-off designer handbags when they think counterfeit goods, fake foods are a growing reality too. Items such as milk, olive oil, fish, honey and wine are especially susceptible. According to John Spink, Ph.D., director of the Food Fraud Initiative at Michigan State University, “it could be 10 percent of the entire U.S. food supply is fraudulent one way or another.” For the brand owner, digitalized products give them distribution visibility and immediate control to remedy any problems that Digitalization may arise. For the of products consumer, it procreates vides a new level transparency, of brand trust. creates “In a time where accuracy, and (consumers) have enables us a stronger desire to act in to understand ways that where things are we could produced, under not do which conditions things are before.” produced and Thomas Kormendi, former CEO, Kezzler what they contain, there’s a level of truth that comes out of (serialization), which I think is of great value to a consumer,” Kormendi notes. He adds: “The digitalization of products gives you a far better, more accurate picture and gives you the ability to act in a more qualified, competent way. I strongly believe in digitalization of products because it creates transparency, it creates accuracy, and it enables us to act in ways that we could not do before.” www.foodlogistics.com

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Transportation Management When people typically think about Transportation Management Systems (TMS), it’s from the perspective of freight rating, saving freight spend and so forth. The byproduct of actually managing your transportation through a TMS, however, is ultimately visibility. “While TMSs traditionally have done a fantastic job of capturing the hard facts of a shipment, probably 80 percent of the information that’s flowing about a shipment actually occurs outside of that,” explains David Landau, executive vice president at Cloud Logistics. “So much of a transportation planner’s time is spent on the phone or having emails back and forth with the carrier to try and figure out what’s going on. There’s always color around the shipment. Why is this late? What’s going on? What should I do once I get there? Who should I talk to? “That’s where we at Cloud Logistics introduced (the ability to leverage) social technologies within transportation,” he adds. The TMS provider’s Logistics Activity Stream is essentially a social network between the distributor, the shipper and their carriers. In addition to receiving the so-called hard facts through your TMS, the stream allows for messaging back and forth between you and your carriers, as well as the posting of photos, the attachment of documents and more. “Whether it is understanding what’s going on with a shipment or resolution of a dispute over an invoice, this allows (our customer) to capture that conversation as well as provide one complete, comprehensive view, complete visibility, to the lifecycle of a shipment while it’s happening and after the fact for historical purposes,” Landau notes. The executive adds that unlike most TMSs, this added visibility provides a single version of truth that’s always accessible and available to both the shippers and the carriers. This is especially important in today’s demand-driven economy, where investments in technology www.foodlogistics.com

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are a must. Landau says while FSMA is one contributing factor to the wider adoption of technologies such as TMS, as well as increased competition, more than anything else the current climate means much smaller margins of error. “If you think about Walmart’s recent push with on-time, in-full (OTIF), they are now saying basically that if you don’t ship it in-full and it doesn’t arrive in the exact

time window that’s specified for you, they are going to charge you back 3 percent of the value of the shipment,” he explains. That means shippers need to have better visibility into the flow of their inventory (or the ability to track and trace their inventory from beginning to end) to ensure that each shipment is moving on time. “Otherwise it’s going to really be costly,” Landau adds.

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MARCH 2018 | FOOD LOGISTICS

3/6/18 8:45 AM

2018 CHAMPIONS

BY FOOD LOGISTICS EDITORS

ROCK STARS The fourth annual Food Logistics’ Champions: Rock Stars of the Supply Chain award recognizes the industry’s most influential for their hard work, vision and leadership in shaping the global food supply chain. Those who made notable contributions in 2017 are listed below.

Richard “Dick” Corbett Partner, Port Logistics Refrigerated Services

Gene Averill Founder and CEO, Avercast Gene Averill gained invaluable experience in the logistics and supply chain industry while managing the operations of 150 warehouses for the Defense Logistics Agency as a lieutenant colonel for the United States Marine Corps. While in the Marine Corps, Averill studied under IBM, where he developed a supply chain software tool for the military. In his success, Averill was then able to write a new software and create Demand Solutions, a company that was recognized world-wide. After leaving Demand Solutions, Averill founded Avercast, revolutionizing the industry with an upgraded forecasting engine containing 205 forecasting algorithms. Averill’s forecasting and demand planning solutions are currently used by more than 10,000 supply chain professionals. Household name brands have relied on Averill’s methodologies for inventory planning and seek out his expertise for supply chain optimization.

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Over the course of his career, Dick Corbett has worked for the Kennedy administration, as a real estate investor and developer in New York City, and helped contribute to Florida’s economic development, agriculture and K-12 education systems. Through these various employment changes, he has continued to demonstrate his leadership and has been recognized as a strategic thinker. Today, Corbett is committed to improving the quality of life and the economic vitality for Florida citizens by helping finance a new on-dock, cold storage facility at Port Tampa Bay. Exporters and importers will be able to take advantage of a faster, fresher and more economical supply chain by not having to route their cargo to more distant ports, saving them from costly truck hauls and delays. The flexibility, cost-savings and services provided are game changing in for Flordia’s food logistics network, proving Corbett to be a Food Logistics Champion.

www.foodlogistics.com

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OF THE SUPPLY CHAIN Jason Dick President, Dick Cold Storage Dick Cold Storage is a family business spanning four generations. Since growing up with the business, Jason Dick has worked in every single position within the company. This experience has allowed him to adapt to changing market conditions and position Dick Cold Storage as a major player in the Columbus cold storage landscape. His experience in the cold storage and warehousing fields has been critical for the Canadian-based English Bay’s success in America. Thanks to Dick’s takeover of order processing, storage and shipping to English Bay customers, the company was able to expand in the United States. Currently, Dick is setting up expanding Dick Cold Storage’s raw material and pastry expansion divisions.

Frank Dreischarf Vice President of Supply Chain Solutions, R2 Logistics Frank Dreischarf started with R2 Logistics in 2017 when he filled the role of vice president of supply chain solutions, bringing with him 20-plus years of distribution and supply chain experience. He has held high-level positions with companies such as The Scotts Company, where he was responsible for logistics strategy and execution supporting $2.8 billion in annual revenues and a $200 million transportation budget across four business units. In his current role, Dreischarf is responsible for developing and managing R2’s multi-modal and supply chain service offerings. His expertise is fundamental in assisting customers such as Anheuser Busch, U.S. Foods and North Bay Produce. Dreischarf believes logistics is a relationship based business and the foundation for any successful relationship is integrity and trust. In his own words, “that means doing what you say you will do, always seeking to find and add value, and to treat others as you want to be treated.”

Co trem

W. Michael Jarrett President, Jarrett Logistics Systems W. Michael Jarrett is known for his entrepreneurial achievements as the co-founder of six highly successful companies in Ohio. His latest venture Jarrett Logistics Systems was founded in 1999 based on Jarrett’s extensive background in transportation management. Jarrett brings 30 years of experience in designing and implementing transportation services in the 3PL industry, making operations better, faster and more efficient. Of note, he led the implementation of a solution for a large food company that desired to manage their LTL carrier on-time delivery performance to the same delivery standards they held for their Full TL carriers. Jarrett developed a plan that his team executed, along with the carrier partners, that the company has been able to maintain for nearly eight years. Jarrett views business ethics, employee character and operational efficiency as the keys to success for Jarrett Logistics Systems.

www.foodlogistics.com

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MARCH 2018 | FOOD LOGISTICS

If eli ov

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Stanton Kaye President, Infratab Inc. Stanton Kaye has created a system by which items of varying spoilage rate can be monitored for freshness, yielding item-specific freshness information at a very low cost. With more than 30 years of experience in the space, he holds four patents in perishable shelf life, using crystal and gel chemical diffusion and controlled electronic corrosion to emulate a perishable’s spoilage characteristics. The concepts in these patents provided the foundation for the future innovations that form the basis of the freshness technology of Infratab’s Freshtime tags. Infratab’s Freshtime tags provide uninterrupted shelf time temperature and freshness monitoring for pennies per item, allowing full value compensation to the seller and maximum enjoyment by the buyer. The consequences of this level of monitoring are subtle but meaningful to small and large businesses and innovative farmers. Kaye believes that if he is able to grade food more accurately, there is an ability to feed the world. Prior to Infratab, Stanton, as vice president of marketing/international at Quarterdeck, is credited with taking a system utility and turning it into the highest volume retail software product next to Windows. Stanton’s unique approach to European sales and support using T-1 communications between Ireland, Quarterdeck’s European offices and its Santa Monica headquarters resulted in special recognition to Quarterdeck from the Irish government for having created the foundation of the customer telephone support industry in Ireland. In addition, Kaye is an independent filmmaker and winner of numerous awards including the United Nations Award for New Ways and Means of Communication and Director’s Fortnight, Cannes Film Festival. Stanton is an American Film Institute Fellow.

Eduardo Kerbel Postharvest Technologies Business Manager, Carrier Transicold Eduardo Kerbel has 31 experienced years in the produce industry, with expert world-wide knowledge in consulting and educational services. He has contributed in disseminating awareness, knowledge and know-how through presentations, seminars and lectures. Kerbel’s knowledge covers various areas of postharvest handling and technology to various groups like growers, shipping lines, logistics personnel, supply chain personnel, warehouse and cold storage personnel, agro-chemical personnel, and store/supermarket operators. Eduardo spends a lot of time trying to bring awareness and improve communications among all players of the cold and supply chains on the importance of following proper handling practices, maintaining proper temperature, humidity and ethylene control practices. Kerbel knows that communication is important to maintain fresh produce quality and condition, as well as keeping postharvest losses to a minimum.

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Bill Loftis Senior Director, Integrated Solutions, Transportation Insight Bill Loftis brings a holistic approach to supply chain assessment for grocery, food and beverage and consumer packaged goods companies. He is driven by efforts to align client supply chain capabilities with their business objectives. By authoring Transportation Insight’s supply chain for grocery retail, he has managed to cost effectively maintain inventory and serve individual consumer unit demand, all while buying large truckload quantities. Loftis designs solutions that help clients gain control of inbound logistics by focusing on three key elements: achieving inbound control, enabling vendor compliance and providing actionable business intelligence. He leverages his expertise in solution design to help clients’ business performance through a method that covers all supply chain processes. Because of this, Loftis helped a $3 billion regional supermarket chain implement a Transportation Insight fleet optimization project, saving them millions of dollars without compromising service. Loftis has consulted many companies on network design, transportation procurement and analytic supported improvement solutions, becoming an industry thought leader and advocate of the value of shared networks.

www.foodlogistics.com

3/8/18 8:44 AM

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2018 CHAMPIONS continued

MORE 2018 CHAMPS AWARD WINNERS Vinicius Anselmo, director product and solution architecture, Neogrid North America Jim Byrnes, CEO, Blue Ridge Raquel Cano, port operations manager, Chiquita Brands International at the Port of Hueneme Chalmers Carr, president, Titan Farms LLC Jose Luis Crespo, vice president of global sales, Plug Power Inc. Ira Dannenberg, vice president of research and development, food division, VAI Christopher Eddy, vice president of investor relations, Flux Power Holding Inc. Sean Elliott, chief technology officer, HighJump Sam Freni, regional vice president, Echo Global Logistics Dan Gorsky, executive vice president, food sector, SCA Technologies

Roland Ornelas Chief Commercial Officer, National DCP LLC Serving as the chief commercial officer, Roland Ornelas has the strategic oversight of the relationship with NDCP’s customers, partners and supplies to effectively support the company’s supply chain and program management functions. With more than 25 years in the industry, Ornelas has played an integral role in transforming NDCP’s supply chain capabilities and maximizing cost savings. His keen ability to connect ideas and diverse, multi-functional groups has transformed the strategic sourcing, procurement and supply chain capabilities of major brands including, Dunkin’ Donuts, Wyndham Worldwide, O’Charley’s Inc., Carlson Companies, McDonalds, Taco Bell, Pizza Hut and KFC. Ornelas is passionate about sharing his knowledge and has delivered popular presentations at industry events. From his humble beginnings as a first-generation immigrant, Ornelas believes in giving back. He aims to bring out the best in his teams through on-going coaching, mentorship, recognition and education. A strong proponent of culture, team building activities include community service activities at the Atlanta Community Food Bank and fundraising for the Jimmy Fund (Dana-Farber Cancer Institute). In 2017, his team raised $800,000 for cancer research, bringing the cumulative total to $13 million.

Bill Harrison, president, Demand Management Inc. Adam Higgins, robotic systems planner, Cimcorp Automation Ltd. Mike Joseph, director of sales, BluJay Solutions Daniel Kelly, CEO and founder, Polymer Solutions International Inc. Jared Kreiter, senior account manager, Becker Logistics Robert Lewis, director of nutrition services, El Monte City School District Ken Lund, vice president of support divisions and logistics, Allen Lund Company, ALC Logistics Joe Marcaurelle, senior manager, operations strategy and continuous improvement, Inmar John McCabe, director of business development, ExtenData Jett McCandless, founder and CEO, project44 Peter Mehring, president and CEO, Zest Labs Inc.

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Dave Reba Director of Consumables Sales, Barcoding Inc. Dave Reba has a proven track record in developing and executing strategies that result in significant market share growth, enhanced profitability and improved customer satisfaction over his 25 year career. He uses his knowledge and industry experience to create a more accurate, efficient and connected supply chain. At Barcoding Inc., Reba leads a team of experts in helping customers overcome challenges and gain competitive edges with the latest technologies. He is able to provide the expertise, materials and label design solutions that enable the food and beverage industry to provide better and fresher products to consumers. Reba continues to strive in assisting food sector companies in designing labels that not only meet regulations, but also communicate vital safety, health and nutritional information to consumers. His extensive RFID experience enables him to support customers in adopting and optimizing evolving track-andtrace technology. By helping his customers embrace new labelling and tagging technology, they will be able to track and monitor an item throughout its entire lifecycle, ensuring the consumer is provided with a safe and fresh product.

www.foodlogistics.com

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Peter Shin Director of Pre-sales for North America, Quintiq Peter Shin has over 10 years of experience in operations research, with a focus on delivering value through technology, business process and change management. Industry leaders in freight, postal, energy, manufacturing, consumables, and finance have all benefited from the initiatives managed under Shin’s guidance. The wide variety of industries, business drivers and challenges tackled by Shin make him the right fit. He believes that technological advancements are just around the corner and that they will elevate the industry to be faster and more efficient. Shin says the companies who will succeed through this evolution of technology will be those who adequately address all three pillars equally: fast, efficient and safe. In terms of food and beverage, Shin has worked with the largest wine producer in the United States, advising long term strategic capacity planning and short-term resource scheduling, as well as a major private label snack foods supplier to run sequencing of production lines.

Bernard Tremblay Director, Miebach Consulting, North America With over 20 years in the industry, Tremblay says he has learned that “working in the supply chain is never finished; there is continuously something to be improved.” His extensive experience with international food and beverage supply chains include clients such as Walmart, Makro Wholesalers, Brazil Foods, Danone, Coca Cola, Givaudan, PepsiCo, P&G, Unilever, McCain, ABI InBev and Mondelez. Tremblay has been working with supply chains before they were a concept to many companies. He has pushed numerous companies over the years to become proactively oriented in their approach to their supply chain. He has been effective in leading executives to understand how establishing supply chains as a key concept within their operation has the ability to make a positive impact on multiple functional areas within the company. Tremblay’s consumer goods expertise spans local, regional and now even global supply chains.

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3/8/18 8:44 AM

2018 CHAMPIONS continued

MORE 2018 CHAMPS AWARD WINNERS Geoffrey Milsom, senior director of transportation solutions, enVista Arif Mohammed, senior director, presales, JDA Software Michael Moorhem, senior director of engineered solutions, Unyson David Myers, senior vice president of operations, The SYGMA Network Daniel Padilla, director of supply chain operations, Kuebix Adrian Parkhideh, director of customer strategy, 10-4 Systems Mitch Plesha, director of distribution, Raising Cane’s Tom Pollard, applications engineer, Cimcorp Automation Ltd.

J.P. Wiggins Co-founder and Vice President of Logistics, 3Gtms J.P. Wiggins has been instrumental in driving transportation management innovations throughout his entire career. Prior to his role at 3Gtms, Wiggins was the solution principal at SAP, focusing on transportation, warehouse and event management offerings in North America. He also directed industry marketing for the company’s transportation and logistics business unit. This experience provided him a deep understanding of how to manage transportation within the complexities of the food industry. At 3Gtms, Wiggins has helped drive a product roadmap that emphasizes tracking and visibility of freight movements. He has assisted multiple 3Gtms’ food customers in improving traceability efforts throughout their supply chain, and has been a driver of enhanced integration capabilities within the 3G-TM product to support data visibility and retention. In addition, Wiggins regularly serves on panels and sessions at industry events to share his insight from a technological point of view and to ensure that he is understanding the latest challenges and concerns from a range of organizations within the industry.

Rajiv Prabhakar, founder and director, Ivy Mobility Inc. Nick Recht, enterprise product manager, TEKLYNX International Jorge Sanchez, vice president of sales in Latin America, JDA Software Giuseppe Santisi, global supply chain and logistics expert, Nestle S.A. Steve Stidham, director of operations, Food Supply Inc. Julie Thuston, assistant vice president, operations and account management, Unyson Matthew Tillman, founder and CEO, Haven Inc. Matt Tweedy, vice president of product management, InfinityQS International Inc. Ross Vigil, vice president of client management, LoadDelivered Logistics Jeff Wehner, chief operating officer, Haven Inc. John Willis, president, Maverick Transportation Inc. Fred Wu, president and CEO, DeltaTrak

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Steven Williams Director of Operations, Universal Lumpers Inc. With more than 16 years of operations and management experience, Steven Williams is the “go to” person to lead and drive high risk initiatives, turn around struggling departments and utilize outside of the box thinking. Williams has led several projects that have improved efficiency, reputation and enhanced overall market position within the freight handling and logistics support industry, including taking lead on Universal Lumper’s PayLump project. Williams knew and understood that data and financial analytics help drive a company toward success, but he also knew that the industry wasn’t welcoming of that information until now. With that knowledge, William helped launchthe development of a modern proprietary software platform that captures over 60 real-time data points, and tracks the unloading process from start to finish. PayLump offers real-time bill calculations that result in extremely high accuracy of charges being billed to the client, taking the human element of error out of the equation. In addition, Williams structured PayLump so that it can be implemented in any operation at any location, driving this project to heights unrealized and not achievable by anyone one else. Recently, he helped launch a new line in the software called PayLump Carrier. It extends the transparency of delivery data and provides another source to compare and contrast data, to insure integrity and consistency between unloaders and drivers.

www.foodlogistics.com

3/8/18 8:45 AM

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2018 CHAMPIONS continued

Past Years’ Winners 2017 CHAMPS AWARD WINNERS Bruce Bleikamp, sales manager, Cimcorp Jackson Bilbrey, vice president of product management, HighJump Matthew Brosious, CEO, FreightCenter

FOOD LOGISTICS ACKNOWLEDGES THESE WINNERS FOR THEIR CONTINUED SERVICE TO OUR INDUSTRY:

Rick Hassler, co-inventor, Nature’s Frequencies

David Cantu, sales director, Marten Transport

David P. Holmes, general manager, The Corr-Williams Company

Carla Carver, vice president of planning and execution, Post Consumer Brands

Sam Hughes, assistant vice president of food and refrigerated products, Union Pacific Railroad

Tim Cortes, vice president of hydrogen energy systems, Plug Power

Jason Lee, logistics manager, Five Guys Enterprise

Arthur Dardoumbas, national solutions manager, Toll Group- Customised Solutions

Scott Carter, CEO and executive director, National DCP LLC

Srini Muthusrinivasan, senior global industry strategies director, JDA Software Group

Katie Curry, senior operations executive and hiring manager, Zipline Logistics

Marco Nielsen, vice president of managed mobility services, Stratix Corporation

Don Durm, director, strategic customer solutions, PLM Trailer Leasing

Tom Cox, vice president, Liberty Cold Storage

Richard O’Connell, CEO and founding partner, Primus Builders Inc.

Bob Elkins, senior vice president and general manager, Dedicated Services, Schneider

Cory O’Connor, logistics manager, The Jel Sert company

Joseph Greene, former president, Distribution Management Systems Inc.

Mark A. Duffy, CEO, Universal Pasteurization Company and Universal Cold Storage

Ann Drake, CEO, DSC Logistics

Ron Dutt, CEO and interim CFO, Flux Power Holdings Inc.

Rob Nemeth, president, Allied Distribution Services LLC

Joe Curry, vice president of operations, Universal Lumpers Inc. and American Lumping Association Inc.

Melissa Parker, vice president, client relations and operations, Inmar

Alison Forsythe, managing director, Macola division, Exact

Sandeep Patel, managing partner, Veridian Solutions

Paris Gogos, vice president of product and marketing, NeoGrid

Brandon Henning, industry solutions director, Sparta Systems Inc.

Robert Peck, board of advisors, LoadDelivered Logistics

Charles G. Kiolbasa Jr., chariman and CEO, Layer Saver

Sam Freni, regional vice president, Echo Global Logistics

Wendy Prosser, director of logistics, Werner Enterprises

Kristy Knichel, president and CEO, Knichel Logistics

Jonathan Greene, vice president of customer development, supply chain division, AFS Technologies Inc.

Travis Rhyan, CEO and president, 10-4 Systems

Stephane Labillois, vice president, transport and logistics, Leclerc Group

Sue Rice, product manager of pallet trucks and stackers, The Raymond Corporation

Paul Laman, vice president, DMW&H

Chandler Hall, vice president of enterprise relationships, BravoSolution Steve Hermanson, director of product allocation and slotting optimization, C&S Wholesale Grocers

John Rosenberger, manager of iWarehouse Gateway and global telematics, The Raymond Corporation

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Davison Schopmeyer, senior managing partner of supply chain solutions, enVista Jay Justin Shrager, president and CEO, Somerset Industries Inc. Dustan Skidmore, vice president of engineering, Plug Power Inc. Vishy Visweswaran, chief technology officer, SCA Technologies Anthony (Tony) Vlahos, senior software engineer, NECS Inc. Mitch Weseley, CEO, 3Gtms Rick Zaffarano, vice president of consumer products solutions, Transportation Insight

Abtin Hamidi, co-founder and vice president of sales, Cargo Chief

Chad Laucher, key account manager, ODW Logistics Inc. Gerald Lessard, vice president and chief operating officer, West Liberty Foods James Lugg, president, J Lugg & Associates Michael Lyle, president and CEO, InfinityQS International Inc. Scott Marr, president and founder, Fleet Clean Systems Inc. Kristine Mauro, vice president of North America integrated planning, Kellogg Company Mick McCormick, vice president, warehouse solutions, Yale Materials Handling Corporation, part of Hyster-Yale Group Don McMillan, senior director, marketing and operations Americas, Enersys Rick Mello, president, Northern Refrigerated Transportation Brian Miller, vice president of services, Intesource, a PROACTIS Company Rick Milligan, director, supply chain solutions, Inmar

2016 CHAMPS AWARD WINNERS

Ken Mullen, senior managing partner, supply chain solutions, enVista

Ron Atapattu, president and founder, Overseas Cargo Inc. (ShipOCI)

Dr. Kakha Nadiradze, president, Association for Farmers Rights Defense (AFRD)

Todd Baggett, founder and chief executive officer, RedLine Solutions

Lee Neal, director of transportation services, M&W Distribution

Brandon Bandlow, vice president and chief operating officer, TTS Logistics

Graham Newland, chief customer officer, International Business System (IBS)

Fred Baumann, group vice president, global manufacturing industry strategy, JDA Software

Doug Niemeyer, general manager, TEKLYNX Americas, TEKLYNX International SAS

David Benjamin, president and CEO, Locus Traxx Worldwide

FOOD LOGISTICS | MARCH 2018

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Frank Morgiewicz, CEO, ArrowStream Inc.

Chris Anatra, president, NECS Inc.

Joey Benadretti, president, SYSPRO USA

Holly Mockus, product manager, Alchemy Systems

Jason Overby, chief operating officer, FW Warehousing Heather Powell, director, customer focus team and project manager, SafeSourcing Inc. Derek Rickard, distribution systems sales manager, Cimcorp

Ed Brown, CEO, Topper Industrial

Steve Sager, president and CEO, ExtenData

Robert Byrne, CEO, Terra Technology

Adriana Sanchez, sustainability director, president, www.foodlogistics.com

3/8/18 8:45 AM

Sea Delight LLC, Sea Delight Ocean Fund

Ann Drake, CEO, DSC Logistics

Therese E. Myers, CEO, Infratab

Samarth Sarthi, CEO, SCA Technologies

Don Durm, director of strategic customer solutions, PLM Trailer Leasing

Dr. Kakha Nadiradze, food safety expert, Taiex

Jon Shaw, director, sustainability and communications, Carrier, Transicold & Refrigerated Systems Jeff Silver, CEO, Coyote Logistics

Elliot Grant, founder and chief technology officer, Harvest Mark Jeffrey R. Haushalter, partner, Chicago Consulting

Sean Smith, supply chain director, Agropur

Louise Hemstead, chief operations officer, Organic Valley

Chase Sowden, supply chain architect, Barcoding Inc.

Lee Neal, director of transportation services, M&W Distribution Tom O’Boyle, director of RFID, Barcoding Inc. Robert Phillips, vice president, AM-C Warehouses Heather Powell, customer focus team director, SafeSourcing Inc.

Wendy Stuart, co-founder, Wide Net Project

Don Hsieh, director of commercial and industrial marketing, Tyco Integrated Security

Bill Tomasi, senior vice president of product management, International Business System (IBS)

Michael D. Johnson, president and CEO, Elite Transit Solutions (ETS)

Dave Williams, director of software and solutions delivery, Westfalia Technologies Inc.

Neil Johnson, president and founder, Highridge Provender LLC

Jeff Wismans, national director of transportation, United Natural Foods

Charles G. Kiolbasa, chairman and CEO, Layer Saver

Paul Sarrapy, owner, president and CEO, Porteo Group

Dan Labell, president, Westfalia Technologies Inc.

Sean Smith, supply chain director, Agropur

Steven LaVoie, founder and former CEO, ArrowStream

Tom Stretar, senior director, enVista

Tim Luberski, president, Hidden Villa Ranch

Terry Walsh, chief operating officer, CROPP Cooperative, Maines Paper & Food Service Inc.

Nelly Yunta, vice president, Customized Brokers, a Crowley Company

2015 CHAMPS AWARD WINNERS Tony Anthony, operations manager, Jake’s Finer Foods Jason Averill, executive vice president, Avercast LLC

Michael Lyle, president and CEO, InfinityQS International, Inc. Andy Marsh, president and CEO, Plug Power Paulo Mendes Jr., director of planning and supply chain strategy, Coca-Cola

Colby A. Beland, vice president sales and marketing, CaseStack

DeAnne Rodgers, corporate logistics manager, Rudolph Foods Company Steve Sager, president and CEO, ExtenData

Paul Welna, cheif operating officer, CROPP Cooperative, Murphy Warehouse Company Peter Zaballos, vice president of marketing and Product, SPS Commerce

John “Jock” T. Menzies III, founder, chairman and president, American Logistics Aid Network (ALAN)

Joey Benadretti, president, SYSPRO USA

Drew Merrill, vice president and general manager, CHEP Pallecon Solutions

Eric Blackburn, CPG director, NeoGrid Marko Cedilnik, logistics director, Mercator Group

Last Mile

✓

Derek Rickard, distribution systems sales manager, Cimcorp

✓

In Style www.foodlogistics.com

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MARCH 2018 | FOOD LOGISTICS

3/8/18 8:45 AM

SECTOR REPORTS WAREHOUSING

BY LARA L. SOWINSKI

COLD STORAGE SECTOR Consumer demand for healthy foods and greater convenience are contributing to continued strong growth.

Stays Hot

ccording to JLL, the refrigerated storage sector is forecasted to grow 3.4 percent annually between 2014 and 2019. Yet, the number of facilities across the United States will only grow by 1 percent annually for the next five years, creating a gap between supply and demand. Recently, Food Logistics checked in with Jason DeLoach, vice president of engineering with Americold, to gauge the temperature of the cold storage sector.

FL: What types of demands are driving change in the sector? DeLoach: Ultimately it’s you and I who are driving change. Changes to our shopping habits, along with purchasing innovative ideas, are causing retailers to adjust how and what they order, which means that food producers are changing how and what they GROWTH produce. FORECAST If there’s an (2014 TO 2019) underlying word, THE REFRIGERATED then perhaps it’s “convenience.” STORAGE SECTOR: We are all shopping more for convenience now. Whether that NUMBER OF means purchasFACILITIES ACROSS THE UNITED STATES: ing online and having the items delivered to our homes, or colSource: JLL lecting our order from a local store, we’re ordering more fresh and chilled products in smaller quantities from a larger overall selection. As a result, it’s driving a proliferation of new products, product

3.4% 1%

FOOD LOGISTICS | MARCH 2018

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changes, packaging updates and order requirements. We’ve seen reports stating that up to 27 percent of shoppers say they have purchased groceries online—so grocery stores and their suppliers are enhancing services in that channel. FL: Today’s cold storage providers operate more like third-party logistic (3PL) providers. What’s behind this transformation? DeLoach: Investment in cold storage is not cheap—it can be up to two times more expensive to build a refrigerated facility over a conventional warehouse—so maximizing the utilization of a facility is imperative. We can achieve this by going beyond simple product storage. It’s also an opportune moment for customers to make products work while in this traditional down time. A product can by lightly processed, packaged, labeled, customized or any number of other activities can be applied so that the product doesn’t just sit in storage. This broadening of value-added

 Investment in cold storage is not cheap, so maximizing the utilization of a facility is imperative. Americold achieves this by going beyond simple product storage.

services is enticing for customers as investment costs shift onto the service provider who, in turn, shares investment costs across multiple customers. As mentioned earlier, consumers want a greater variety of options and want to order more frequently, so fulfillment becomes more complicated. The days of a truckload of one product being delivered to a retailer are long gone, but by utilizing economies of scale, we’re able to mix-load and fill trailers, and then offer scheduled deliveries to retail customers. Customers only need to pay for the capacity they take up on the truck. We can accommodate a wider variety of products, and products can get replenished several times each week. This flexible cost model is very appealing for our customers. They don’t need to own infrastructure or assets; they benefit from a lower www.foodlogistics.com

3/5/18 3:38 PM

price of entry into the temperature-controlled supply chain and ready-made delivery networks; and they don’t necessarily need logistics expertise or systems. They only pay for what you use. FL: We’re seeing more cold storage facilities being built on or near ports and at key border crossings and trade gateways to accommodate growing imports/exports of perishables. Can you expand on this trend? DeLoach: Some of this can be traced back to the chain of responsibility—products either enter sooner or leave later from a controlled environment. But it’s not just near ports [where activity is taking place]. Centers of consolidation—be it people, producers, processes, distribution networks or other infrastructure centers—are becoming more common as ideal locations for import- or export-focused facilities. The longer a ma-

jority of product can be stored and transported together, the greater the cost benefit. For example, it’s more cost effective to shell a load of shrimp in one location before they are distributed. It’s easier to get a quantity of beef inspected all together. And, it’s easier to fumigate or ripen produce at one time. FL: Efficiency and safety are also a big part of the design features. High-rise facilities that are fully automated, operating 24/7, along with safer refrigerants and cooling systems are becoming more popular. Are these design features suitable for specific facilities only, or is this trend something that will become more prevalent across the board? DeLoach: Land prices or capacity constraints encourage vertical development, and heat infiltration is greatest through the roof and floor so a higher building can be more energy efficient than the

same volume of space for a lower/ wider building. And, common order profiles can motivate automation integration—automated facilities don’t need to be dedicated to single customers. Meanwhile, low charge packaged reefer systems are very popular today. Why? They offer lower overall quantities of refrigerants, equipment redundancy, reduced piping and less opportunity for a refrigerant release with greater ability to quarantine. They’re also easier to maintain.

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any erm t, G h 2018 r a g t 41 Stut 15 Marc d F 13 – 1, Stan Hall

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SR: WAREHOUSING

continued

COLD STORAGE DISTRIBUTOR OPTIMIZES RACK TO CONTINUE EXPANSION To meet retailer demand for efficient cold chain distribution east of the Mississippi River, Manfredi Cold Storage had to continue expanding its Kennett Square, Pennsylvania facility. Recently, the company expanded the facility by 70,000 square feet, bringing their total to 400,000 square feet of cold storage space, and already, plans are in the works for future expansion. The distributor handles fruit, vegetables and foodstuffs from 22 countries, at minus 55-degree Fahrenheit temperatures, in its facility that provides retailers with wireless, real-time inventory and access. In order to keep its continued growth on track and operations running smoothly, the company installed an exceptionally rugged drive-in racking systems, designed for the application by Steel King Industries, according to Rob Wharry, the facility’s director of operations. “About 150-200 truckloads of product move in and out of our storage everyday, about 25,000 pallets, so the drive-in rack needs to be very durable and accessible,” says Wharry. “The product has to go out quickly and efficiently to grocery stores, club stores, distribution centers and the foodservice industry.”

Withstanding a Tough Environment Drive-in rack enables storing up to 75 percent more pallets than selective rack and is ideal for high-traffic and cooler/freezer installations. With drive-in rack, forklifts drive directly into the rack to allow storage of two or more pallets deep. About But because forklifts drive directly into 150-200 the rack, they tend to take more abuse than truckloads other rack structures. In cooler and freezer of product move applications, the rack must withstand some in and out of of the greatest forklift abuse in warehouse our storage material handling due to the confined everyday, space, slick surfaces and cold temperatures so the drive-in that slow driver reflexes and make impact rack needs to be more frequent. very durable and “We’re in and out of rack with heavy accessible.” pallets and equipment so many times a day. It’s a fact of life that sometimes forklifts will Rob Wharry, director of operations, run into the rack, so it just needs to be able Manfredi Cold Storage to stand up to the daily use,” says Wharry. In the most recent expansion, about 4,000 pallets of refrigerated storage capacity were added. For this, Manfredi Cold Storage chose Steel King’s SK3000 pallet rack, a rugged bolted rack with structural channel columns. A number of rack features are helping the distributor to meet its strength, durability and maintenance goals. Compared to typical racking, the pallet rack—constructed of hotrolled structural channel column with full horizontal and diagonal brac-

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 Forklift entry is one of the biggest advantages of drive-in racking.

ing—offers greater frame strength, durability and cross-sectional area. All Grade-5 hardware provides greater shear strength, and a heavy 7-gauge wrap-around connector plate ensures a square and plumb installation with a tighter connection and greater moment resistance. The drive-in rack also includes a number of features that enhance ease-of-use and safety. For instance, the drive-in load rail construction includes: structural angle rails that “guide” pallets for ease of use; flared rail entry ends to allow easy bay access; space-saver low profile arms that increase clearance and decrease possible product damage; welded aisle-side load arms that eliminate hazardous load projections into aisles; welded rail stops that prevent loads from being pushed off and increase safety; and 2-inch vertical adjustability of the bolted rack, which allows for a variety of configurations for current or future products. “The heavy rub rail inside the rack helps to guide the pallets in,” says Wharry. “The flared rail entry makes it easier to put pallets in and to take them out of the upper positions.” For extra protection and reinforcement against forklift impact, a guard on the front of the rack’s first upright was added. The double column, welded angle column protector is designed for heavy pallets and provides additional strength. According to Wharry, their drive-in rack vendor was also willing to accommodate their needs in other ways as well. “Our operation is a little different than a typical storage customer because we’re dealing with lots of different sized products, so we had a very specific design in mind,” Wharry explains. “Everything is specific to our application: rack height, width, pallet loads and how we utilize it.” The rack openings are about 12 inches to 16 inches taller than a standard rack opening to allow the use of very tall pallets, he says. Additional adjustments to the rack include the specific implementation of guards, heavy rail and how it is anchored to the floor.

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FL: What other trends and developments in the cold storage sector are worth noting? DeLoach: Automation, vertical design, multi-vendor consolidation and consolidation for particular retailers/overflow, outsourcing for the benefits of variable costs, power reclamation (e.g. using redundant heat for under floor heating and air curtains), and vertical dock levelers to accommodate multiple trailer heights but also to ensure a more complete cold chain (e.g. trailer doors stay closed until unit is enclosed in dock door curtain). FL: Overall, the import and export and demand for fresh, perishable foods is rising domestically and in every global market. That’s good news. What is the forecast for the cold storage sector in the next 12-18 months? DeLoach: There will be a continued demand for more variety of fresh or chilled products that are convenient, perhaps individually wrapped and at more temperature breaks. Service providers will take on even more value-added services and include aisle ready and friendly product preparation and category breaks (e.g. the non-mixing of SKUs, such as no fish with dairy). Furthermore, the demand for organic products will continue, and with it, probably category separation and multi-temp trailers.

2017 IARW NORTH AMERICAN TOP 25 REFRIGERATED WAREHOUSING AND LOGISTICS PROVIDERS

COMPANY

LOCATION

Americold Logistics

Canada and United States 898,485,049

CUBIC FEET

CUBIC METERS 25,442,221

Lineage Logistics

United States

626,432,145

17,738,553

Preferred Freezer Services

United States

304,142,984

8,612,356

United States Cold Storage Inc.

United States

259,113,324

7,337,260

VersaCold Logistics Services

Canada

132,510,534

3,752,274

AGRO Merchants Group LLC

United States

113,693,701

3,219,442

Interstate Warehousing Inc.

United States

100,227,481

2,838,121

Cloverleaf Cold Storage Co.

United States

90,648,842

2,566,885

Burris Logistics

United States

62,329,576

1,764,974

10 Henningsen Cold Storage Co.

United States

59,773,733

1,692,601

11 Congebec Logistics Inc.

Canada

49,660,000

1,406,212

12 Hanson Logistics

United States

43,818,540

1,240,801

13 Conestoga Cold Storage

Canada

42,892,766

1,214,586

14 Zero Mountain Inc.

United States

38,271,381

1,083,723

15 Confederation Freezers

Canada

29,736,000

842,028

16 Trenton Cold Storage Inc.

Canada

28,335,972

802,384

17 MTC Logistics

United States

25,206,254

713,760

18 Nor-Am Cold Storage Inc.

United States

25,198,000

713,527

19 Seafrigo

United States

23,118,754

654,649

20 Midwest Refrigerated Services Inc.

United States

21,759,000

616,145

21 Interstate Cold Storage Inc.

United States

21,403,000

606,064

22 Hall’s Warehouse Corp.

United States

20,625,304

584,043

23 Nova Cold Storage (formerly Brookfield) Canada

19,000,000

538,019

24 SnoTemp

United States

18,319,375

518,746

25 United States Growers Cold Storage Inc. United States

16,546,972

468,557

Source: Global Cold Chain Alliance (www.gcca.org)

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MARCH 2018 | FOOD LOGISTICS

3/5/18 3:38 PM

SECTOR REPORTS TRANSPORTATION

BY KRISTI MONTGOMERY

ADDRESSING THE CHALLENGES AND OPPORTUNITIES

IN LAST-MILE DELIVERY The final leg of transportation represents a chance for organizations to win over customer perception as well as achieve cost savings in order fulfillment.

ith the 2017 holiday season in our rearview mirror, companies (especially retailers) across the globe are looking closely at deliveries—what went well, what went disastrously and what we can learn from delivering during the busiest time of the year? Some carriers struggled to process record-high delivery volumes, and there’s growing pressure for companies to meet the rising “need-it-now” consumer mindset. This, coupled with massive growth in e-commerce and online ordering, has led many companies to take a closer look at last-mile delivery: the final and most important leg of a shipment that ends at a customer’s door. When materials and The last mile is components routinely historically inefficient cross thousands of miles and can account for in their supply chain jour40 percent to ney, it seems implausible 50 percent of a that the final, short company’s logistics costs.” stretch of home delivery could pose a challenge. The last mile is historically inefficient, however, and can account for 40 percent to 50 percent of a company’s logistics costs. Between continuously changing routes, rising fuel costs and the burdening cost of delivering individual items to

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distinct locations, it’s increasingly important for companies to remain on top of innovative solutions that address delivery concerns, specifically as it relates to the last mile.

Reaching Customer Expectations—and Cutting Costs From customer satisfaction to transportation cost savings, the final leg represents a chance for organizations to win over customer perception as much as it does for order fulfillment. Therefore, it’s imperative that companies optimize last-mile logistics and understand current delivery innovations, while also remaining in tune with what emerging technologies will impact the final mile. Doing so makes all the difference in both overhead and customer satisfaction ratings—and smart companies are learning to get on board. Balancing cost-to-serve and customer delight is like walking a tightrope, as innovative technologies are often unproven, not standardized and require significant investment. However, through transparency, increasing trust with customers and partner suppliers, and proactive planning, these efforts can fit handin-hand.

Transparency should be at the top of the list and an integral part of any shipping option. Many companies now offer consumers real-time updates into the status of a package. It not only provides companies with peace of mind, but also clues in customers who want to know: Where is their shipment currently? When will they be receiving it? Who is delivering it? All of this can often be answered with something as simple as the click of a button on a computer or smartphone, but this only

 Last year in Florida, UPS tested a drone delivery from a truck to private homes.

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happens with true collaboration between companies and suppliers. This extends into other industries as well. When you think of online shopping, grocery is hardly the first category you’d think to purchase. However, it’s projected that online sales of grocers could expand to $100 billion annually by 2025. Grocery retailers that offer online shopping often provide same-day delivery or on-site pick-up options. Yet the same concerns still ring true, leaving companies to cut delivery and transportation costs while also meeting the customers’ demands and delivery expectations. Grocery also adds another level of complexity, as the products can often come with certain requirements such as temperature-controlled trucks and packaging. Keeping the customer happy is critical. However, so is quality and meeting budget. Enhancing and streamlining last-mile delivery is an important step, but investing in

these innovations and the technologies to do so comes with a price. The pressure of needing to get shipments to customers eclipses the cost to make it happen far too often. Companies should be able to tackle every mile (not just the final one) without worrying about wasted time, resources or hefty price tags. This is why companies need proactive attention when it comes to their last-mile approach.

Last Mile Innovations and Drone Delivery As e-commerce continues to advance, there’s a growing need for a more viable solution to deliver in heavily congested and confined areas. For these reasons, last-mile delivery becomes increasingly difficult in urban areas. Testing is in process with shipments delivered to a hub location via truck, with the last mile delivered via drone. These hard-to-reach areas are a good option for this delivery approach. While it’s unlikely we’ll see droves of drones delivering packages throughout neighborhoods in the next year or so, it is on the horizon. In the future, drones (and other innovative technologies) will be at the forefront of the supply chain and become a priority—and possibly a necessity—to remain competitive. Until then, there are hurdles to overcome. Clarification of Federal Aviation Administration (FAA) regulations and limitations of battery technology are the biggest issues currently holding drone technologies back and will need to be addressed before this last-mile delivery method becomes mainstream.

What Can Be Done Right Now? Despite these existing hurdles, the supply chain is changing and will continue to transform. As a result, the demand for last-mile delivery will continue to grow, even as fulfillment timelines lessen (on www.foodlogistics.com

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both the consumer and business side). Companies, supply chain executives and innovation leaders are all eager to address the challenges of last mile delivery and look to remain on top of growing innovations in this space. GPS-enabled trucks, trains, boats and/or aircraft can automatically deliver real-time data to the customer. This visibility into the shipping process emphasizes a level of trust and transparency, directly addressing the customer concern. It also cuts down on customer frustrain and service inquiries, making them more likely to return for future orders and recommend the brand. If a retailer is not transparent or is slow in their delivery, they may lose a customer. IoT sensors that provide monitoring of environmental and security issues in transit can provide enhanced visibility on food and temperature sensitive materials. These devices continue to develop in reliability, feature set and cost efficiency. With configurable options such as how often the device reports the status of the shipment, battery life can be prolonged and still provide customer visibility. Emerging technologies and ecosystems, such as blockchain, self-driving trucks and the sharing economy, will have a future impact on further enhancing the customer experience and last-mile delivery as well. In recent testing, Walmart reduced the time to track food items from weeks to minutes utilizing blockchain technology. This required trusted collaboration and resulted in higher traceability and transparency. With the rise of sharing, utilizing crowd-sourced delivery mechanisms provides greater diversity of options for the consumer around their delivery. Technology alone can’t perfect the last mile, though. Companies must also incorporate proactive planning, and route planning is a critical way to develop realistic delivery timelines and select the most efficient driving route before rubber ever meets the road.

Technology alone can’t perfect the last mile, though.

Companies must also incorporate proactive planning.”

Kristi Montgomery is vice president of innovation at Kenco Logistics. With 27 years of logistics and supply chain experience, she leads a dedicated team of specialists in Kenco Innovation Labs who identify, research and prototype creative ideas with the potential to impact the supply chain.

MARCH 2018 | FOOD LOGISTICS

3/5/18 3:40 PM

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3/6/18 8:39 AM

SECTOR REPORTS

SOFTWARE & TECHNOLOGY

BY BARRY HOCHFELDER

Artificial intelligence is a reality, but many industries are slow to adapt. Hereâ&#x20AC;&#x2122;s how to do it.

& THE

SUPPLY CHAIN

OF TODAY AND TOMORROW

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www.foodlogistics.com

3/6/18 8:39 AM

AR: MORE THAN A VIDEO GAME

es, artificial intelligence (AI) is here and can make a difference in supply chain. But, says Accenture in a new report, the people element can’t be overlooked. AI, the study says, “Consists of multiple technologies that can be combined in different ways to sense, comprehend, act and learn. Accenture research shows that AI has the potential to boost rates of profitability by an average of 38 percent by 2035 and lead to an economic boost of $14 trillion (U.S.) across 16 industries in 12 economies by 2035. But, this will only happen if organizations adopt a people-first mindset and take bold

Augmented reality (AR) often is viewed as an entertainment technology, but, says an MIT researcher, it can revolutionize the supply chain. Matthias Winkenbach, an MIT researcher with a doctorate in economics, envisions a future where supply chain managers wearing augmented or virtual reality headsets could make quicker decisions, save money and maximize their productivity. AR is a technology that superimposes a computer-generated image on a user’s view of the real world, thus providing a composite persepctive. For example, said Winkenbach, speaking at last year’s MIT Crossroads Conference, “A supply chain manager who would normally run a traffic simulation model in a computer could wear an AR headset, tap on a hologram-like image of a truck in the field, and a dashboard display could show data ranging from items in the truck to customer addresses and real-time weather and traffic conditions. “Supply chain managers interested in analyzing performance problems with conveyer belts in warehouses overseas could wear a virtual reality headset and immerse themselves in the real-time environment to solve problems without spending time and money traveling to the physical location,” he added.

Winkenbach, director at MIT’s Megacity Logistics Lab at the Center for Transportation and Logistics, also pointed out that those scenarios are still three to five years away, but when available, all it would take is an internet connection and an HR headset. As often is the case with technology, industry will follow consumers into the AR world, he said. AR must gain more traction in the consumer sector “before hardware and software that would allow supply chain managers to visualize data in 3D becomes advanced enough to be used inside corporations,” added Winkenbach. “Makers of hardware devices tend to improve the technology for commercial use when it catches on in the consumer sector,” he explained, pointing out how the iPhone has become a business tool for many. “Without it catching up on the consumer side, it’s going to be hard...for it to be technologically robust and advanced enough to create value in a corporate environment.”

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MARCH 2018 | FOOD LOGISTICS

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SR: SOFTWARE & TECHNOLOGY continued

THE TOP 5 ENTERPRISE AR TRENDS FOR 2018… AND BEYOND By Brian Ballard, CEO and co-founder, Upskill Keeping up with the fast-evolving realm of augmented reality (AR) technology can be a challenge. Last year we saw Glass (formerly known as Google Glass) remerge into the public eye and new AR toolkits launch that have simplified AR application development. To make sense of it all and help supply chain leaders know what to expect, Upskill predicts five of the most important developments expected in 2018. AR will fuel the best-known brands in the world. We are seeing AR reach new areas of the supply chain, with use cases flourishing throughout the entire product lifecycle. This enables more companies across more sectors to empower their workforces to perform tasks more efficiently and with higher quality,which turns into a competitive advantage. This extends to major brands in food and beverage. For example, technicians at The Coca-Cola Company wear AR-powered smart glasses to expedite equipment inspections, service calls and routine audits. Technicians receive real-time maintenance instructions in their line of sight from subject matter experts around the world. Without needing to fly in an expert, Coca-Cola is saving nearly $10,000 per service call. Service and logistics will take pole position. Until now, the majority of enterprise AR use cases involved heavy-duty field service and manufacturing applications. However, we are now seeing AR use cases for field service and material handling rapidly gain traction, largely due to the sheer repeatability of their applications. Even a 10 percent efficiency gain in the warehousing pick and pack process can make a huge impact on the bottom line, particularly in the e-commerce and retail sectors where margins are low. Remote expert guidance for unplanned downtime, line changeovers and predictive maintenance are also quickly proving out, driving deployment expansions at fast speeds. Anyone can be an AR developer. No longer will enterprises need a software developer to create AR workflows and provide complex database integrations. Tool sets now exist that are lowering the entry barrier for the knowledge required to build AR applications, putting the power into the hands of those who are closest to the problem or use case. These typically “non-technical” people can quickly create content and more easily translate their workflows into AR experiences that fit within the processes already established in their organizations. Speech will become the primary interaction paradigm for enterprise AR. Because the most transformative AR applications involve hands-on work, voice, rather than gesture and touch interfaces, will be the ideal interaction point. Smart assistants like Amazon Echo are quickly gaining popularity, and by virtue of that, familiarizing workers with how to carry out everyday tasks using voice—even at home. Tech behemoths will drive the 3D content. Early on, AR business value was defined upfront, leaving tech providers to play catchup to fill in gaps and bring this value to fruition. Now we are seeing well-known tech providers like Google, Apple and Facebook investing upfront in consumer AR. This has raised the bar for how an enterprise engages its workforce with rich content, real-time information and bi-directional communication between people and systems. As a result, we are now starting to see an explosion of content development, as well as the tool sets that make creating that content easier. With these trends in mind, the roadmap for AR in the enterprise is a bit clearer. Adoption is growing, and many food logistics organizations are realizing the benefits of AR today.

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and responsible steps to apply AI technologies to their business.” Study co-author Mark Purdy, managing director of Accenture Research, wrote, as the new factor of production, AI can drive growth in at least three important ways. • First, it can create a new virtual workforce—what we call intelligent automation. • Second, AI can complement and enhance the skills and ability of existing workforces and physical capital. • Third, like other previous technologies, AI can drive innovations in the economy. “Over time, this becomes a catalyst for broad structural transformation as economies using AI not only do things differently, they will also do different things,” Purdy said. In addition, Accenture identified eight cross-industry strategies to make this a reality.

 AI STRATEGY AND LEADERSHIP: At many

firms and industries, Accenture says, “The impetus and interest for AI still comes from the bottom or from the middle of the organization—from digital enthusiasts that have seen these technologies and are personally excited by their promise. But, attaining the value from AI that our analysis suggests will demand recognition and action from the very top of the company.” The first step is to make the benefits of AI apparent to the C-suite. A roadmap to grow the business should incorporate AI as a critical enabler. “As such, it is incumbent on leaders and strategic planners from across the business to have a sufficient grasp of AI to effectively transform existing business plans, to define key decision points and to guide appropriate investment decisions,” the report notes.

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 REINVENT

HR INTO HAIR:



38%

Since AI is a form of virtual labor, it will interact with the workforce, contributing and adding value in the same way a human co-worker would, so the role of human resources (HR) will not only be about managing human employees, but also the supervision of AI workers—Human AI Resources (HAIR). “The HR function itself will also need to incorporate AI technologies in all aspects of its work, from hiring to retirement,” Accenture says.

AI BOOST RATES OF PROFITABILITY HAS THE POTENTIAL TO

38 PERCENT BY 2035 and lead to an economic boost of $14 trillion (U.S.) across 16 industries in 12 economies AN AVERAGE OF

 LEARN WITH

MACHINES: According to Accenture Research, fully exploiting the potential of AI, human and machine intelligence must be tightly interwoven. “There will be a need for new skills in the workforce that leapfrog technical expertise, with a new emphasis on human abilities—judgment, communication, creative thinking— that complement technologies.”

 APPOINT A CHIEF DATA SUPPLY CHAIN OFFICER: The report

suggests this executive will need to construct an integrated, end-toend data supply chain, considering issues such as: What is the balance between internal and external data sources? What is the company’s data churn and cost per day? Where are the data silos? How can our company simplify data access?

 CREATE AN OPEN AI CULTURE: “Corporate

culture must adapt to the presence of its new AI employees,” the report explains. “Humans and machines will be collaborating, teaching

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SR: SOFTWARE & TECHNOLOGY continued

ARTIFICIAL

and learning INTELLIGENCE from one another. This demands trust, openness and transparency, just as any co-working relationship. For example, it may become tempting to blame machines for poor performance or faulty output, rather than identifying weaknesses—whether human or machine—and improving them.”

 STEP BEYOND AUTOMATION: Automation has been a critical staple of business strategy in the past. Yet, with recent strides in AI, Accenture says companies “need to take a step beyond to harness the intelligence of dynamic, self-learning and self-governing machines.”

 TAKE THE CROWD INTO THE CLOUD: The next step in innovation, the report predicts, will be to combine the crowdsourced data in the cloud with AI capabilities to create new and disruptive business opportunities. Platforms such as Google Cloud and Amazon Web Services already are doing this.

 MEASURE YOUR RETURN ON

ALGORITHMS: Measures for traditional factors of production include return on capital, as well as human performance metrics for employees. “As a new factor of production, AI will also require new or adapted measures. CFOs will need a new toolbox of financial metrics to properly assess the ‘Return on AI,’” Accenture says. This could be related to value generated from each algorithm or some combination of initial outlay and ongoing costs. “To realize the opportunity of AI,” sums up co-author Paul Daugherty, Accenture chief technology and innovation officer, “it’s critical that businesses act now to develop strategies around AI that put people at the center, and commit to developing responsible AI systems aligned to moral and ethical values that will drive positive outcomes and empower people to do what they do best—imagine, create and innovate.”

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FOOD LOGISTICS | MARCH 2018

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Barry Hochfelder is a freelance journalist who has covered a variety of industries in his career, including supply chain. He also served as the former editor of Supply and Demand Chain Executive. Hochfelder is based in Arlington Heights, Illinois. www.foodlogistics.com

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3/6/18 8:39 AM

SECTOR REPORTS OCEAN CARRIERS & PORT

BY BARRY HOCHFELDER

CHILLIN’ IN NORTH CAROLINA B

A new facility and USDA program at Port of Wilmington keeps produce safer and healthier for consumers, while increasing the bottom line for shippers.

lueberry lovers in the SouthTo help reduce that risk, perisheast U.S. used to wait while ables were required to be chilled the fruit took a round-about to a certain temperature to fulfill trip from Peru, Uruguay or ArgenUSDA’s APHIS quarantine requiretina to reach their local market. It ments for fruits and vegetables enfirst had to be shipped to specialtering the country. Only then could ized cold-treatment facilities in the the produce be shipped to stores in Northeast before it could be southern states. cleared for distribution. Now, the USDA’s The It’s known that many Southeast In-Transit Cold Southeast agricultural pests and disIn-Transit Cold Treatment Pilot program eases exist worldwide that allows entry of in-transit, Treatment could be introduced into Pilot allows cold-treated containers the United States through agricultural products entry of of commodities such as meats, from South America, in-transit animals, animal products, expediting blueberries, cold-treated fruits, vegetables, plants, citrus and grapes from containers of soil, seeds and plant-based Peru; blueberries and agricultural handicrafts, among others. grapes from Uruguay; products Because of these risks, and apples, blueberries from South the U.S. Department of and pears from Argentina America.” Agriculture’s (USDA) Animal to grocers’ shelves. and Plant Health Inspection In its USDA Fresh Service (APHIS) regulates the entry Fruits and Vegetables Manual, the of certain foreign agricultural prodagency states: “The articles from ucts into the United States. the countries of origin listed in

FOOD LOGISTICS | MARCH 2018

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 North Carolina’s Port of Wilmington became the first South Atlantic port to implement Phase 2 of the USDA’s cold treatment pilot program in December.

this manual are regulated because just one destructive pest might be enough to start a pest outbreak that can cause millions of dollars of damage to crops, trees, flowers or lawns. By their destructiveness, pests can increase the price and reduce the quality of food, lower property values and ruin recreational areas. The extinction of just one plant species does away with the aesthetic, ecological, educational, historical, recreational, commercial and scientific value of our world.” Just one pest, the fruit fly, can wreak havoc if it slips through. According to APHIS, “Fruit flies in the family Tephritidae are among the most destructive, feared and well-publicized pests of fruits and vegetables around the world.” www.foodlogistics.com

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COLD CHAIN CAPABILITIES KEY TO SUPPORTING GLOBAL FOOD SUPPLY CHAIN By Lara L. Sowinski

The continued expansion of the U.S. Department of Agriculture’s Southeast In-Transit Cold Treatment Pilot program marks an important milestone for ports in the Southeast U.S. But, the ports’ sizeable investments in cold chain capabilities—from reefer racks and plugs, to heavyweight corridors, and on-dock and near-dock cold storage facilities—are equally critical for supporting imports and exports of perishable food. Last summer, StreamLines, a division of Seatrade, the world’s largest provider of specialized refrigerated container operations, added North Carolina’s Port of Wilmington to its Blue Stream weekly service. Paul J. Cozza, executive director of the North Carolina State Ports Authority, notes that, “Agriculture exports are critical to our region’s economy, and this service, along with other recent service additions, will continue to allow our farmers to use their natural gateway—North Carolina Ports.” Since January 2016, StreamLines’ Blue Stream service has deployed five vessels on a weekly rotation calling 10 ports, including ports in Europe, the Caribbean, Central America and the United States. The service features ships with high reefer container intake and has become an important transportation link for perishable shippers moving seasonal and year-round product from Central America to the United States and Europe and from the Southeast U.S. to Europe. “The addition of the Port of Wilmington to the rotation allows StreamLines the opportunity to service North Carolina’s important and ever growing sweet potato export market,” says StreamLines general manager Pablo Gonzalez. “Furthermore, we opened the Carolinas to one of the fastest and most direct services from Central America.” Sweet potatoes are a very import export commodity for North Carolina, as well as the Port of Wilmington. According to the North Carolina Sweet Potato Commission, since 1971, North Carolina has ranked as the No. 1 sweet potato producing state in the United States. The state harvested nearly 95,000 acres of sweet potatoes in 2016, which was roughly 30,000 more acres than California, Louisiana and Mississippi combined—states that are also leading producers of sweet potatoes. A significant volume of North Carolina’s sweet potatoes are exported to Europe, especially the UK and Netherlands. The Netherlands serves as a primary gateway for the sweet potatoes, which are then distributed to countries such as the UK, France, Germany, Sweden and Finland. Meanwhile, the Port of Wilmington Cold Storage (PWCS) facility is keen on attracting more agricultural exports and imports. On the import side, port officials say North Carolina’s emerging grocery sector stands to benefit from the expanded cold chain capabilities together with the USDA’s cold treatment pilot. The fruits and vegetables imported through the Port of Wilmington via StreamLines will result in the expansion of cold chain models servicing the Southeast U.S. directly through Wilmington, they say.

FOOD LOGISTICS | MARCH 2018

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SR: OCEAN CARRIERS & PORTS

continued

Tephritid fruit flies spend their larval stages feeding and growing in more than 400 host plants. Introduction of these pest species into the United States causes economic losses from destruction and spoiling of host commodities by larvae, costs associated with implementing control measures, and loss of market share due to restrictions on shipment of host commodities. The extensive damage and wide host range of tephritid fruit flies become obstacles to agricultural diversification and trade when pest fruit fly species become established in these areas.

Swatting the Pests The two-phase USDA pilot enables a limited number of containerized cargoes to enter the port directly after completing a two-week cold treatment process as a safeguard against fruit flies and other pests, as well as acquiring all the required unloading clearances prior to the shipment’s arrival at the U.S. port. Phase During Phase 1 (instituted in 2 opens 2013), fruits are chilled between 15 and 17 days at a specified temup an perature to protect against pests. option for The process begins in fruit-exportimporters, ing countries in Central and South which is only America. The refrigerated cargo available at can then only be discharged from a the Port of South Atlantic terminal upon comWilmington at pletion of its treatment schedule. this time.” During Phase 2, the port acquires Hans Bean, vice the ability to allow importers with president of trade development, North refrigerated cargo to finish the Carolina Ports treatment schedule on-terminal before being discharged. On Dec. 1, 2017, North Carolina’s Port of Wilmington became the first South Atlantic port to implement Phase 2 of the pilot program, allowing more direct imports of produce from across the Americas. “Phase 2 opens up a totally new dimension for our port and an option for importers to complete treatment after discharge, which is unique in the South/Mid-Atlantic, and only available at the Port of Wilmington at this time,” explains Hans Bean, vice president of trade development at North Carolina Ports. The Port of Wilmington has almost 300 plugs on terminal and the capacity to add more. In addition to its reefer capacity, the port also is home to a 101,000-square-foot on-terminal refrigerated warehouse, one of only a few in-port cold storage facilities in the country. In 2016, the Port of Wilmington became the home to North Carolina’s first, and only, in-port www.foodlogistics.com

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 The Port of Wilmington is home to North Carolina’s only inport coldstorage facility.

cold storage facility. The Port of Wilmington Cold Storage (PWCS) maintains specific temperatures for the storage of perishable goods, such as fruits, vegetables and proteins, as well as some pharmaceuticals and florals. The Port of Wilmington is a major hub for exporting refrigerated and frozen pork and poultry products, but prior to PWCS, it didn’t have a cold storage facility within its gates. Agriculture is an $84 billion industry for North Carolina, Chuck McCarthy, president and CEO of PWCS, said at the opening. “And the demand for U.S. meats and vegetables abroad is very high, particularly in Asia. We anticipate that PWCS is going to allow North Carolina producers and processors to significantly grow their expert business by providing them with a more cost effective alternative to trucking their products to out of state ports. We also hope that local growers who may have thought export was out of their reach will consider working PWCS is with us to grow their going to allow markets overseas.” North Carolina North Carolina producers and also becomes more processors to competitive with grow their neighboring states, said an official of the export business.” state Department of Agriculture. “The Chuck McCarthy, president and CEO, demand for chicken Port of Wilmington overseas is particularly Cold Storage high and we anticipate that PWCS will allow North Carolina poultry farmers to significantly grow their export business to Asia,” says Robert Hosford, assistant www.foodlogistics.com

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MARCH 2018 | FOOD LOGISTICS

3/6/18 8:30 AM

SR: OCEAN CARRIERS & PORTS Barry Hochfelder is a freelance journalist who has covered a variety of industries in his career, including supply chain. He also served as the former editor of Supply and Demand Chain Executive. Hochfelder is based in Arlington Heights, Illinois.

continued

director, Foreign Direct Investment. “The addition of a cold storage facility this close to the water is a huge advantage for North Carolina agriculture and the food processing industry.” PWCS features almost 3 million cubic feet of freezer and cooler space and 10,600 pallet positions. It is divided into three primary areas: a convertible room that can be used for refrigerated or frozen products, a freezer room where temperatures are painted below zero degrees, and a blast freezing room where products like chicken and pork can be frozen to zero degrees within 24 hours. (USDA regulations require that meats be frozen to zero within 72 hours of slaughter.) USDA inspection is provided on-site with a dedicated office. Other services provided include:

•U SDA approved export stamping, labeling and export document preparation •C ontainer loading, unloading and cross-docking •D omestic freight loading and unloading •C omputerized inventory control •H andling, slip sheeting and case selection • S hrink wrapping

Others in the USDA Pilot Another participant in USDA’s pilot is the Port of New Orleans (Port NOLA), which is a boon for shippers who want to transport perishable cargo from South America. “Participating in this pilot is a significant gain and highlights Port NOLA’s ongoing commitment to

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Columbia Machine, Inc.............................................................................................12 Cubic Designs, Inc......................................................................................................35 DAMBACH Lagersysteme Inc.............................................................................41 DSC Logistics................................................................................................................21 ESI GROUP USA.........................................................................................................49 FG Products Inc...........................................................................................................39 Ford Motor Co........................................................................................................... 2-3 Freightliner - A Daimler Group Brand...................................................... 46-47 GPS Insight....................................................................................................................51 Great Dane Trailers Inc............................................................................................62 Infratab............................................................................................................................29 Interlink Technologies..............................................................................................14 Jindal Films....................................................................................................................13 JLL......................................................................................................................................23 Kenworth Truck Corporation...............................................................................37 Mitsubishi Caterpillar Forklift America Inc....................................................15 North Carolina Ports Authority...........................................................................11 Old Dominion Freight Line Inc............................................................................... 5 Port Tampa Bay............................................................................................................55 Q Products and Services.........................................................................................28 RLS LOGISTICS...........................................................................................................43 Schaefer Systems International, Inc..................................................................52 South Carolina State Ports Authority...............................................................17 Superior Tire & Rubber Corp.................................................................................. 9 SWISSLOG.....................................................................................................................27 TOTE Maritime............................................................................................................57 TranSolutions Inc........................................................................................................58 Uline..................................................................................................................................38 Utility Trailers...............................................................................................................33 Viking Cold Storage...................................................................................................25 Witron................................................................................................................................ 7

 Certain fresh fruits from countries in South America are regulated because just one destructive pest, such as the tephritid fruit fly, could result in an outbreak causing widespread damage.

developing new business,” says Brandy D. Christian, Port of New Orleans president and CEO. “This program gives current and future port shippers additional options to transport refrigerated cargo, while reducing transit time from origin to the consumer.” Meanwhile, Virginia Port Authority CEO and executive director John F. Reinhart says there are many beneficiaries of the change. “Shippers will see lower transportation costs and a longer shelf life for their products,” he says, adding: “Consumers will see lower prices at the store, and there will be environmental benefits from reduced emissions related transportation. “This designation is important for logistics and supply chain managers importing agricultural products because it means shorter total transit times from origin to market,” Reinhart explains. “This helps to diversify our cargo mix. It opens the door for new cargo and provides an important service for owners and shippers of perishables. This helps to support our strategic growth plan and further establishes the Port of Virginia as a global gateway.” Containers that don’t pass cold treatment won’t be allowed to enter the port and can’t be offloaded from vessels. Instead, they’ll either be shipped to a Northeastern port for re-treatment or will be returned to the country of origin. Additional ports in the program include Savannah, Georgia and Florida’s Port Tampa, Port Manatee, Port Miami and Jacksonville (JAXPORT). www.foodlogistics.com

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Online nominations open approximately eight weeks before the deadlines listed above. Award results, information and nominations posted on:

FoodLogistics.com/Awards Nomination dates and issues may change. Consult the call-for-entries email and nomination survey for confirmation Nomination dates and issues may change. Consult the call-for-entries email and nomination survey for confirmation

FLOG0318_54-59_Ocean.indd 59

3/6/18 8:30 AM

FOOD (AND MORE) FOR THOUGHT

BY JOANN MARTIN

Getting Inventory Management Right Calls for a Balanced Approach

W MARTIN

JoAnn Martin is vice president of retail industry strategy at JDA Software. A veteran of the retail space, Martin analyzes trends impacting softlines, fast-moving consumer goods and other sectors of the retail market, discovering ways that technology creates efficiency and enhances the customer experience.

hen customers come into your stores with menus in mind or shopping lists in hand, empty shelves are the last thing they want to see. In today’s unpredictable market, customer-facing inventory management is a mix of art and science, a balance between maximizing the productivity of shelf space and meeting shopper needs. And when your shoppers can order groceries online and get sameday delivery, a focus on financial productivity isn’t enough. Yes, grocers have to rationalize space, just as retailers across the board are doing. And you’re constantly faced with the challenge of balancing ROI on your inventory investment, while also minimizing waste. But with stiff competition for your customers’ wallets, not just from brickand-mortar grocers but from their online channels as well as mega-marketplaces like Amazon, your inventory management and space planning strategies have got to be made with an understanding of your customer. You have to take into account the ways those decisions could impact shopper loyalty. Knowing how your customers are shopping means having as much good quality data as possible so that your predictions hold water. When traffic to your stores increas-

FOOD LOGISTICS | MARCH 2018

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es beyond what historical trends can track, driving higher demand, your ability to accurately predict your inventory and fulfillment needs changes. Remember, the longer the time horizon between gathering and incorporating data, the more your strategies become reactive instead of predictive. In today’s fast-evolving retail world, grocers cannot afford to rely on manual processes or intuition. Data science, especially the ability to collect and analyze shopping data, will be table stakes for grocers that want to stay profitable and competitive.

Meanwhile, as new fulfillment options like click and collect or home delivery gain wider adoption and acceptance, you’ll be challenged to rethink your inventory strategy. Grocers that move toward a more centralized inventory model, reducing the levels held in

local stores, impacts your speed to market and your delivery times. Grocers that aren’t willing to trade a higher chance of empty shelves in stores for the ability to meet rapid fulfillment demands in other channels will need as much visibility into demand as possible. So, how often are you recalibrating your existing forecasting models? How much emphasis are you putting on customer loyalty and satisfaction when you consider inventory levels? And are you making the most of today’s predictive analytics capabilities to help you avoid empty shelves and customer dissatisfaction? Because at the end of the day, the customer is king. Aside from having an engaging in-store customer experience and the best visual presentation on your shelves, it’s important to consider the impact on your business that an empty shelf space might have. Yes, margins remain tight in grocery, but losing momentum with your loyal shoppers could be the push they need to move away from in-store shopping and try out a different fulfillment option. If your brand relies on in-store experience as a differentiator, you need to consider the impact those changes in channel preference could have. With the macro changes that retail is undergoing, it’s vital that you balance not just inventory productivity and waste, but the customer experience—and change your forecasting expectations to incorporate those shifting demand cycles. That will make it easier to keep your shelves filled, your inventory in the best place, and your customers happy and loyal. www.foodlogistics.com

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