Food Logistics March 2019 by Supply+Demand Chain/Food Logistics

IOT CREATES A MORE PROACTIVE FOOD SUPPLY CHAIN

THE RISE OF HIGH-TECH COLD STORAGE

Food Logistics

CONSUMERS FUEL LAST-MILE INNOVATION ®

Global Supply Chain Solutions for the Food and Beverage Industry

THE 2019 CHAMPS INTRODUCING OUR INAUGURAL CHAMP DIANE WETHERINGTON, ALONG WITH THE REST OF THE YEAR’S INDUSTRY ROCK STARS

Issue No. 204 March 2019 FoodLogistics.com FLOGCover.indd 1

3/1/19 1:02 PM

FOOD LOGISTICS NAMES

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!

Vanessa Villegas Safety Manager Universal Chain, Inc.

Jason Rosing Co-Founder & Managing Partner Verdian Solutions, LLC

Jerry Rau Chief Operating Officer 3GTMS

Jim Becker Founder/CEO Becker Logistics

Matt Wagner Vice President, Sales & Marketing Jarrett Logistics Systems

Don Durm Vice President, Customer Solutions PLM Trailer Leasing

David Appel President Carrier Transicold

Geoff Turner President/CEO Choptank Transport, Inc.

Rick Trigatti North America President Cimcorp Automation Ltd.

Luis Graca Applications Engineering Manager Cimcorp Automation Ltd.

Michael Johnson President/CEO Elite Transit Solutions, LLC

Matt Angell Vice President, Logistics Operations Jarrett Logistics Systems

Jeffrey Owen Founder, President & CEO Lightning Technologies

Bill Whalen Director of Business Development -Warehousing Matson Logistics, Inc.

Aaron Conway President Mezzanine Safeti-Gates, Inc.

Nick Banich Partner Miebach Consulting Inc.

Richard T. Murphy, Jr. President & CEO Murphy Warehouse Co.

Steve Domonkos Chief Operations Officer National DCP, LLC

Andrew Macek President/COO OMNI Systems

Pratik Soni Co-Founder & CEO Omnichain

Stacey Patch Business Manager The Raymond Corporation

Chris Lahti Vice President of Distribution Smithfield Foods, Inc.

FLOG0319_InsideBarnDoorTemplate.indd 1

3/5/19 12:04 PM

FOOD LOGISTICS NAMES

Vanessa Villegas Safety Manager Universal Chain, Inc.

Jason Rosing Co-Founder & Managing Partner Verdian Solutions, LLC

Jerry Rau Chief Operating Officer 3GTMS

Jim Becker Founder/CEO Becker Logistics

Matt Wagner Vice President, Sales & Marketing Jarrett Logistics Systems

Don Durm Vice President, Customer Solutions PLM Trailer Leasing

David Appel President Carrier Transicold

Geoff Turner President/CEO Choptank Transport, Inc.

Rick Trigatti North America President Cimcorp Automation Ltd.

Luis Graca Applications Engineering Manager Cimcorp Automation Ltd.

Michael Johnson President/CEO Elite Transit Solutions, LLC

Matt Angell Vice President, Logistics Operations Jarrett Logistics Systems

Jeffrey Owen Founder, President & CEO Lightning Technologies

Bill Whalen Director of Business Development -Warehousing Matson Logistics, Inc.

Aaron Conway President Mezzanine Safeti-Gates, Inc.

Nick Banich Partner Miebach Consulting Inc.

Richard T. Murphy, Jr. President & CEO Murphy Warehouse Co.

Steve Domonkos Chief Operations Officer National DCP, LLC

Andrew Macek President/COO OMNI Systems

Pratik Soni Co-Founder & CEO Omnichain

Stacey Patch Business Manager The Raymond Corporation

Chris Lahti Vice President of Distribution Smithfield Foods, Inc.

FLOG0319_InsideBarnDoorTemplate.indd 1

3/5/19 12:04 PM

FLOG0319_2-5_TOC.indd 2

3/4/19 8:32 AM

Merging The Digital Supply Chain & Automation In today’s environment of slim margins, unprecedented competitive pressures and the demand for increased quality and process requirements, it’s important to have an innovative partner with a history of success. Experience KNAPP innovation. From the inventor of shuttle technology, visit us at Promat 2019 in Chicago and see the latest flexible, scalable supply chain mechanization and order fulfillment technology that provides a competitive edge – highly efficient case handling automation and eCommerce solutions – to deliver the goods to your customers, reliably and on-time.

700

1.4 140

major installations

go-lives per week

More than

projects

food retail projects in more than 30 counties

Over

1000 software employees

24/7 365º 24/7 365 degree support, across 7 languages

3/4/19 8:32 AM

ON THE MENU

OCTOBER 2015 ISSUE NO. 171

March 2019 ISSUE NO. 204 COLUMNS FOR STARTERS

W ho’s Going to Hold Down the Farm

The image of the American farmer as we’ve known it is coming to an end.

COOL INSIGHTS

IoT is Creating a More Proactive Food Supply Chain milindri / iStock / Getty Images Plus

The data extracted and analyzed from IoT provides those in the food and beverage industry with real-time variables to operate the most efficiently and cost effectively.

FEATURES THIRD-PARTY & REFRIGERATED LOGISTICS

rack and Trace in the T Food Supply Chain

Visibility is getting better, faster and cheaper. SPECIAL REPORT

ock Stars of the Supply R Chain: Food Logistics Names 2019 Champions

Meet Food Logistics’ first Champion of the Year Diane Wetherington of iFoodDecisionSciences, along with the rest of the year’s industry rock stars.

SECTOR REPORTS

T he Rise of HighTech Cold Storage

The more time a product spends in transit, the greater the risk of it being damaged— especially if the product is perishable or sensitive to external conditions.

FOOD (AND MORE) FOR THOUGHT

TRANSPORTATION

P ressure to Innovate for Last Mile

Evolving consumer demands and new grocery delivery models require investments in last-mile innovations. SOFTWARE & TECHNOLOGY

O perational AI Helps Foodservice Companies Optimize Their Supply Chains

OCEAN PORTS & CARRIERS

Increased demand for healthy and convenient options has initiated a need for highly-complex cold storage facilities.

V isibility is Key to Mitigating Cold Chain Risks



Machine learning can be used to sense, plan and act on the micro-events that determine supply and demand across the entire food supply chain.

WAREHOUSING

primeimages/E+ /Getty Images

SeventyFour /iStock / Getty Images Plus

ON THE MENU

P ort Houston Sees Opportunity in Perishable Food Cargoes

Infrastructure investments are key, including cold storage.

R ecall Preparedness is as Necessary as Ever

Eight years after FSMA, recalls are still prevalent.

DEPARTMENTS 8 12 51

Supply Scan Food on the Move Ad Index

WEB EXCLUSIVES • AI Makes Forecasting Easy foodlogistics.com/21044968

• Sustainability Trends to Watch in 2019 foodlogistics.com/21044940

• The Importance of Prevention in Safe Quality Food Programs foodlogistics.com/21044937

Americold

Published and copyrighted 2019 by AC Business Media. 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, 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 2019

FLOG0319_2-5_TOC.indd 4

www.foodlogistics.com

3/4/19 8:33 AM

T270 Class 6 / T370 Class 7 18,000 lbs. and 20,000 lbs. front axle, and up to 46,000 lbs. rear axle options available on the T370.

K270 Class 6 / K370 Class 7

Build your reputation with The World’s Best.

For Beverage Delivery Business » Quality: Premium Kenworth quality built into every custom Medium Duty truck » Reliability: PACCAR PX-7 or PX-9 engines with ratings to meet all of your powertrain requirements » Efficiency: Built to maximize beverage delivery » Durability: A robust chassis built to withstand the challenges of beverage service conditions » Low Lifecycle Cost: Lower operating cost, maximized uptime and proven performance » Superior Maneuverability: Up to 55 degree turning radius for tight spaces Follow us on

Learn more and find a dealer near you at www.kenworth.com No-cost 3-year extended warranty: Just finance through PACCAR Financial by Dec. 31, 2019. Ask dealer for details.

FLOG0319_2-5_TOC.indd 5

3/4/19 8:33 AM

FOR STARTERS

WHO’S GOING TO HOLD DOWN THE FARM?

T SOWINSKI

DETAILS

FROM THE EDITOR’S DESK

he image of the American farmer as we’ve known it for decades is coming to an end. A recent report in The Wall Street Journal paints a dire picture—simply put, farmers are awash in debt and there doesn’t seem to be much hope for surviving in the future even if some are able to get through the current hard times. Bankruptcies are hitting the industry at levels not seen in over a decade. At the same time, a glut of commodities like corn, soybeans and other crops has pushed prices lower, while competition from agricultural powerhouses such as Brazil and Russia continues to heat up. Worse yet, “Trade disputes under the Trump administration with major buyers of U.S. farm goods, such as China and Mexico, have further roiled agricultural markets and pressured farmers’ incomes,” states the article. Finally, many farmers resorted to shrinking their operations or consolidating them over the years, which resulted in even more acreage controlled by fewer, but larger farms. According to the USDA, roughly 40 percent of U.S. farmland is now rented or leased. Moreover, the average American farmer is about

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

ysbrandcosijn / iStock / Getty Images Plus

WWW.FOODLOGISTICS.COM

58 years old, while nearly 60 percent of principal landlords are 65 years or older. In response, the agency is working to attract a new generation of farmers to the industry, including women, veterans and young people. A dedicated website is a treasure trove of resources and valuable tips. Meanwhile, new farmers aren’t necessarily following in the footsteps of the previous generations. They’re growing specialty crops, raising exotic livestock, utilizing vertical farming methods, and adopting software and technology to boost yields, mitigate risk and work more efficiently. Consumer demands are changing right along with the farming industry, which in turn impacts food logistics. From farm to fork, most everything is in a state of flux. At Food Logistics, we’re doing our part to keep readers updated. This issue covers IoT in the global food supply chain, the latest in tracking and tracing, last-mile delivery, AI and AR and more. Enjoy the read.

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

PRINT AND DIGITAL STAFF Group Publisher Jolene Gulley Associate Publisher Judy Welp Editorial Director Lara L. Sowinski lsowinski@ACBusinessMedia.com Editor John R. 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 CEO Barry Lovette CFO JoAnn Breuchel Vice President, Sale & Marketing Amy Schwandt Editorial Director Greg Udelhofen Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas Published and copyrighted 2019 by AC Business Media. 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 | MARCH 2019

FLOG0319_6-7_ForStarters.indd 6

3/5/19 10:20 AM

2 degrees. 65 days a year. PORT OF MORE COLD STORAGE.

NC Ports is a specialist in refrigerated cargo transport. We offer hundreds of plugs on-terminal for refrigerated containers, and short turn times to maximize efficiency. Plus, our supply chain management system and our proximity to major markets help keep your costs down and your products moving. And since our focus is always on you, weâ&#x20AC;&#x2122;ll always look for solutions that help you be even more successful. Give us a call and find out what NC Ports can do for you.

833.375.5978 / NCPorts.com

FLOG0319_6-7_ForStarters.indd 7

3/5/19 10:20 AM

SUPPLY SCAN

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

SOBEYS INC. PARTNERS WITH PROFITECT

BARRIER GLIDER HIGH-SPEED DOOR DESIGNED FOR COLD STORAGE

Rite-Hite unveiled its Barrier Glider Cold Storage Door, featuring a high-speed, bi-parting door that is ideal for refrigerated warehouses, food manufacturing/processing plants, grocery distribution centers and other facilities that require strict environmental control. The Barrier Glider Door features Rite-Hite’s Thermal-Flex Sealing System, providing a heated perimeter sealing design. In addition, safety is enhanced by its fast-operating systems and panels that automatically reverse when they encounter an obstruction. The door also comes with Rite-Hite’s Graphic User Interface door control panel, allowing workers to troubleshoot settings without personal protective equipment by eliminating arc flash.

ORBIS CORPORATION INTRODUCES NEW BULK CONTAINER FOR THE SEED INDUSTRY

ORBIS has created a new seed bin for the market called the GEN250. The bulk container provides a more efficient and easy-to-use packaging solution for the agriculture industry’s seed needs. Manufactured from high-density polyethylene, the container is built for a long service life and environmentally-friendly seed handling. The containers collapse and stack securely together, minimizing storage needs and increasing transportation efficiency. “The agriculture industry needed a seed container that simplified seed handling through wellthought-out details and features,” says Bob Klimko, market development director for ORBIS Corporation. “A partnership with Seedbox Solution to bring this container to market seemed natural due to its industry-specific reusable packaging expertise and ORBIS’ manufacturing capabilities.”

FOOD LOGISTICS | MARCH 2019

FLOG0319_8-11_SupplyScan.indd 8

Profitect Inc. has signed a partnership agreement with Sobeys Inc., a leading Canadian grocery retailer. Sobeys is replacing their legacy Exception Based Reporting (EBR) solution with Profitect’s Sales & EBR module. The retailer will use Profitect’s pattern detection and machine learning technology to analyze their sales data and create actionable opportunities that deliver value to their business. Areas of focus include fraud, shrink, process failures, training opportunities, loyalty behavior, returns, and labor efficiencies. “We are very pleased to welcome Sobeys into our customer community,” says Guy Yehiav, CEO of Profitect. “They are a leading Canadian grocery retailer, and we are proud they have selected Profitect to identify opportunities for sales and margin improvement. We look forward to a strong and successful partnership with them.” Sobeys will also leverage Profitect’s Mobile Field Application (MFA) to remove false positives in the field, drive smart task-management and optimize performance in stores. Sobeys is planning to roll out Profitect across its 1,500 stores under all retail banners.

www.foodlogistics.com

3/6/19 12:00 PM

FLOG0319_8-11_SupplyScan.indd 9

3/6/19 12:00 PM

SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN

Getty Images

Daily Updates at FoodLogistics.com

PHONONIC PARTNERS WITH PEPSI BOTTLING VENTURES

CONSUMERS WARY OF GROCERY DELIVERY

While companies like Walmart, Kroger and Target are racing to deliver groceries right to customers’ doorsteps, consumers are still incredibly wary about buying online. Currently only 3 percent of grocery spending occurs online. Meanwhile, only a quarter of consumers have even tried an online grocery service within the last year, according to a survey by consulting group Bain & Co. in collaboration with Google. Out of the 8,000 surveyed, only 26 percent reported that they order groceries online more than once a month. According to the survey, only 42 percent of those who used a grocery delivery service for the first time said it actually saves them time. A bad experience could potentially ruin a shopper’s perception of the concept. The survey found that at least 75 percent of online grocery shoppers continue to use the first retailer they initially shopped from. Online grocery shopping is only expected to explode within the coming years, though. Even if the grocers haven’t yet captured the trust of the consumer, they are still continuing to move toward delivery as it is more profitable overall.

MAERSK TO INTRODUCE A VIRTUAL ASSISTANT

In the first half of 2019, Maersk will release a revamped Remote Container Management (RCM) design, with new product features enhanced by a virtual assistant named Captain Peter. “Our goal is for the RCM product to look and feel like your favorite smartphone app. There is still a lot of paper work and difficult processes in global trade. Captain Peter will help take care of some of this complexity, by seamlessly engaging with the customer from end to end in the supply chain,” explains Anne-Sophie Zerlang Karlsen, head of global reefer management at Maersk. To start, Captain Peter will follow simple rules and send up-to-date information via customers’ preferred channel. Should any deviations be observed, or the shipment be delayed, Captain Peter will notify the customer. The RCM technology makes a reefer’s location, temperature, humidity and power status easily available to the customer. Should any issues be detected, the customer can alert its supplier or have the shipment checked by local surveyors, potentially saving the customer millions of dollars in lost cargo. “With the number of active users of the RCM platform constantly growing, the aspiration is for Captain Peter to gather enough information to be able to predict potential cargo damage and provide configuration suggestions before containers are shipped,” concludes Karlsen.

FOOD LOGISTICS | MARCH 2019

FLOG0319_8-11_SupplyScan.indd 10

Phononic, a leader in cooling and heating technology, has teamed up with Pepsi Bottling Ventures (PBV) to expand current deployment of the company’s Merchandising Refrigerator to PBV customers. The refrigerators offer food retailers an innovative and sustainable alternative to compressor-based refrigeration. The refrigerators also store more inventory, driving sales higher and with lower replenishment trips, while delivering an unsurpassed sustainability footprint. “Phononic’s sustainable solid-state cooling technology is groundbreaking and furthers our goal of improving environmental sustainability throughout our entire organization and within the communities in which we operate,” says Randy Quirk, vice president of Foodservice at PBV. “The Phononic Merchandising Refrigerator has been an incredible asset for our retail store customers. Each sustainable unit delivers compact and energy efficient utilization of merchandising floor space, uniform temperatures and maintenance savings. Based on these features, our customers now have the freedom to rethink in-store layout and optimize refrigerator placement, creating incremental revenue opportunities.” A recent survey commissioned by Phononic found that 50 percent of food retail executives claimed that they hadn’t figured out a way to leverage technology as successfully as nonfood retailers. Meanwhile, 60 percent of respondents said they feel their organization doesn’t invest enough in in-store technology. Technological differentiation is critical for food retailers, and the company aims to reimagine the shopping experience by allowing for optimal in-store placement.

www.foodlogistics.com

3/6/19 12:00 PM

Exceed your customers’ expectations

In today’s food retail market, consumers demand fresh, high-quality products, and excellent service. As a result of increasing consumer demands, food retailers must cope with the growing volumes of diversified stock and multiple store formats. E-commerce requirements must also be factored into distribution center processes. In such an energetic and changeable environment, you need a reliable partner that can help you to exceed your customers’ expectations. Vanderlande is a unique single source supplier with an international presence that understands the complexities of running a successful food retail business. Through an integrated portfolio of innovative systems, intelligent software and life-cycle services, our next generation of scalable solutions – evolutions – will help to support your desired growth strategy. For more information, please contact Vanderlande at info.us@vanderlande.com.

April 8-11, 2019

Visit us at booth # S1203

> vanderlande.com

FLOG0319_8-11_SupplyScan.indd 11

3/6/19 12:00 PM

FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

ROCKETAIL OFFERS NEXT GENERATION AERODYNAMICS FOR REAR DRAG REDUCTION

Rocketail LLC has launched Rocketail Wing—next generation rear drag reduction technology for trailers. The Rocketail system is a verified EPA SmartWay trailer with rear-fairing technology for heavy-duty truck trailers. The trailer exhibits a certified fuel efficiency improvement of over 3.58 U.S. gallons per 1,000 miles. “Rocketail solves the ‘Three D’s’ essential to performance for any aerodynamic tail system—drag, deployment and damage,” says Michael Militello, CEO at Rocketail. “Our Rocketail Wing is integrated with the trailer door, so it’s always deployed, it extends a mere 14 inches from the rear of the trailer, eliminating a main cause of rear collision damage in current tail systems, and it delivers proven drag-reducing performance.” The Rocketail Wing is deployed using swing-hinges that lock the wings in their maximum aerodynamic open position each time the doors are closed. The system shifts the wings flush with the sides of the trailer each time the doors are opened, allowing them to swing a full 270 degrees without being blocked.

DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Truckload Rates Are Poised to Rise 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. Montague is based in Portland, Oregon.

Spot truckload rates have declined steadily since the start of the year, raising questions about whether we’re heading into a period of soft shipper demand and even a slack economy. This trend is nothing new, however. Spot rates fall every year in January and February. The exception was last year, when rates rose in January because the electronic logging device mandate led to capacity shortages and unpredictability in the market. This year trucks are plentiful, fuel prices are lower, and competition among carriers is driving spot truckload prices down. The national average spot reefer rate slipped to $2.31 per mile in January, 14 cents lower than December; by mid-February, the rate had stepped down further to $2.25 per mile. The national average reefer load-to-truck ratio, a measure of demand for truckload capacity, was 6.2 in January, meaning there were 6.2 loads for every available truck on the spot market. That number had fallen to 5.9 by mid-February.

FOOD LOGISTICS | MARCH 2019

FLOG0319_12-15_FOM.indd 12

Alarming? More signs of weakness? Not really. If you’re a shipper with freight to move, pricing is probably in your favor. If you’re a carrier, hang in there. Just as rates tend to fall at the start of the year, they almost certainly rebound during the second quarter. This trend, too, is nothing new.

www.foodlogistics.com

3/1/19 10:16 AM

PREMIUM SERVICE IS OUR PROMISE.

WE’RE COMMITTED TO EXCEEDING YOUR EXPECTATIONS As the leading national LTL carrier, Old Dominion is always working to make your shipping easier. It’s something we take seriously, and it shows in our #1 rankings for value, satisfaction, responsiveness and overall performance.* Our more than 23,000 employees working in 235 OD service centers take pride in helping you ship confidently from coast to coast and everywhere in between.

For more information, visit odfl.com or call 1-800-235-5569. Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are registered service marks of Old Dominion Freight Line, Inc. ©2019 Old Dominion Freight Line, Inc. Major League Baseball trademarks and copyrights are used with the permission of Major League Baseball Properties. Visit MLB.com. *Source: 2018 Mastio & Co. National LTL Carrier Report

FLOG0319_12-15_FOM.indd 13

3/1/19 10:17 AM

FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

AMERICOLD ACQUIRES PORTFRESH HOLDINGS, PLANS COLD STORAGE FACILITY AT PORT OF SAVANNAH

Americold has acquired the privately-held PortFresh Holdings, a leading temperature-controlled operator servicing fresh produce trade primarily through the Port of Savannah. In connection with its acquisition of PortFresh, Americold plans to build a new 15 million-cubic-foot cold storage facility on adjacent land owned by PortFresh. “The Port of Savannah is one of the fastest-growing ports in the United States, and has seen increased traffic of temperature-controlled trade. With this investment, Americold is fulfilling our customers’ requests to expand into this growing market, which provides an efficient and cost-effective solution to meet their import and export needs,” says Fred Boehler, president and chief executive officer of Americold Realty Trust. “We believe this development project represents a significant long-term growth opportunity for the company, as we continue to grow our scale and develop our partnership with the Port of Savannah.” The planned new facility, estimated at a cost between $55 million to $65 million, will feature 37,000 pallet positions, advanced blast freezing capabilities, and space and infrastructure to support refrigerated-containerized trade. Americold expects to begin construction on the new facility in the first half of 2019, with the opening expected to be in the first quarter of 2020.

STOP & SHOP BRINGS ON-DEMAND, SELFDRIVING GROCERY STORES TO CONSUMERS

Stop & Shop will launch driverless grocery vehicles in the Greater Boston area starting spring 2019. The vehicles will bring a selection of Stop & Shop produce, meal kits and convenience items directly to consumers. Part of an engagement with San Francisco-based startup Robomart, the vehicles will address consumers’ desires to select their own fresh produce when shopping via online or mobile, while delivering an even more convenient grocery shopping experience for Stop & Shop customers in the Boston area. The engagement offers potential for expansion beyond its existing brick-and-mortar footprint. “This is one way in which we’re leveraging new technology to make shopping easier for our customers by essentially bringing the store to them,” says Mark McGowan, Stop & Shop president. “We also recognize that many of our customers want the opportunity to make their own choices when it comes to fresh produce, and we’re proud to be the first retailer to engage with Robomart to address our customers’ needs with their cutting-edge solution.” Customers can call on a Robomart vehicle via a smartphone app. Upon its arrival, customers unlock the vehicle’s doors, then personally select the fruits, vegetables and other products they would like to purchase. When finished, they close the doors and send the vehicle on its way. The bot’s RFID and computer vision technology automatically record what customers select to provide a checkout-free experience, and receipts are e-mailed within seconds.

FOOD LOGISTICS | MARCH 2019

FLOG0319_12-15_FOM.indd 14

BLUE APRON HOPES RETAIL PARTNERSHIPS WILL ATTRACT HIGH-SPENDING SUBSCRIBERS

Meal-kit subscription service Blue Apron continues to lose tens of thousands of customers on a quarterly basis—a trend it expects to continue as it pivots to a new service model. Blue Apron is now focusing on getting existing customers to spend more, while recruiting more customers to the platform that are similar to its most loyal members. Late last year, the company shifted to a flexible service model, which included distribution through retailers and more choices for customers, including quick changes to plans, meals that take less time to prepare, and limited-time, specialized meal-kit offerings. Despite the change in approach, analysts say the strategy doesn’t adequately address the business model’s core problem: Blue Apron is situated in an uncomfortable middle ground between restaurant delivery services and grocery stores, driving its potential customer reach to a too-narrow customer group. It’s the reason why other food delivery startups have struggled to scale.

www.foodlogistics.com

3/1/19 10:17 AM

Reduce Your Total Cost of Business

Driving Automation Efficiency Great news for your bottom line. There are more than 40 areas of savings with iGPS plastic pallets â&#x20AC;&#x201C; the most comprehensive pallet solution for driving down your total cost of business. More lightweight, hygienic, sustainable and durable than wood alternatives, they offer remarkable efficiency and uniformity, and reduce transport costs, product damage and equipment downtime. Thatâ&#x20AC;&#x2122;s why the unique iGPS Plastic Pallet Pooling System provides cutting edge, global supply chain solutions for some of the leading companies and manufacturers in the world.

To see more green for your company call 1(800) 884-0225, or visit:

www.igps.net

FLOG0319_12-15_FOM.indd 15

3/1/19 10:17 AM

COOL INSIGHTS

BY MIKE SHARPE

VISIBILITY IS KEY

F SHARPE

Mike Sharpe is the president of Cooltrax Cold Chain Solutions and has over 12 years experience helping customers achieve visibility into their supply chain with an IoT platform.

ood from all over the world is available to today’s consumers. This blessing also creates greater complexity, which brings challenges into your supply chain. The more time a product spends in transit, the greater the risk of it being damaged—especially if the product is perishable or sensitive to external conditions. What is not yet fully defined is how much supply chain visibility is adequate? For example, do we go down to the product or caseload level in terms of connectivity? We live in a connected world where visibility and reporting are essential parts of the management process, and most providers are already accustomed to some level of visibility. In today’s world, we’re seeing an unprecedented amount of ways to connect. It seems everything these days has a modem and the capabilities for connectivity. So where do you draw the line? How much visibility is enough? Too much can become overwhelming. Visibility can come in different layers. In the transportation sector, many new reefers come with the telematics already plugged into the unit by the manufacturer, yet this added cost only provides a limited view. For instance, when a reefer shuts off, so does the visibility into the box. Having the ability to add additional sensors along with the reefer data adds another level of visibility, and these sensors allow you to add as many points as needed. Data loggers can provide another layer, but the real key is connecting the multiple layers and turning the resulting data into actionable insights delivered in an easily digested format.

FOOD LOGISTICS | MARCH 2019

FLOG0319_16-17_COOLINSIGHTS.indd 16

CAPTURE, STORE AND ACT ON YOUR DATA Every day, visibility helps people drive efficiency and cut costs within the supply chain. With so many connected devices it’s important to know where to look for the most value. You want to capture your temperature data because it’s required and, more so, you want the ability to save a loss if there is an issue that can easily be corrected. Capturing this data can help you stay on top of the constantly changing landscape of regulations and compliance. If you also export products, you are familiar with the complexity of trade agreements and government tariffs. Transportation has become more regulated as a result. Technology and its visibility into the supply chain gives your team of experts the ability to quickly anticipate, respond and adapt to any new regulations.

BENEFITS OF COMPLETE COLD CHAIN VISIBILITY A supplier with visibility into its cold chain lessens the chances of business disruptions. Visibility enhances the ability to quickly respond to any needs throughout the chain, such as equipment failure or human error. A key to cold chain visibility is the ability to ensure

you are keeping up and maintaining compliance with the latest regulations involving food and its transport. With the right infrastructure in place, you can gain transparency across every stage of your cold chain, while reducing costs, improving performance and reducing costly errors. An essential part of visibility is the data analytics it produces. An effective data analytics strategy can unite sources of information and provide actionable intelligence. Likewise, an organized data structure can provide the necessary tools needed when facing an audit or simply to improve the speed and accuracy of decision-making processes. Many companies are increasingly leveraging cloud platforms to store and process huge data sets, and some are using a hybrid system that combines legacy homegrown systems with cloud infrastructure. Visibility of important data provided by exception-based and conditional-based alerts enable companies to then also manage by exception. Complete cold chain visibility is not an easy task, yet there’s a bright side. Implementing the proper tools and adopting new technologies can enable you to leverage new tools, such as blockchain and AI, which can deliver an advantage that separates you from the competition.

primeimages/E+ /Getty Images

TO MITIGATING COLD CHAIN RISKS

www.foodlogistics.com

3/1/19 10:19 AM

Advancing progress, unlocking a greater potential

Integrated Supply Chain Solutions

Transportation Management

Supply Chain Packaging Services

Business Process Integration

Supply Chain Consulting

Omnichannel

Logistics Center Management

Business Intelligence

Retail Consolidation + Requirements

Technology

Human Capital

International Freight Forwarding

Medical + Healthcare

Cross-Border Transportation

TES (Technology, Engineering, Systems & Solutions)

At DSC Logistics, we provide dynamic supply chain leadership for customers based on collaborative partnerships, innovative solutions and high-performance operations. Ready to lead in the global marketplace, we have joined with CJ Logistics, accelerating our transformation strategy to deliver customer value in new and expanded ways.

Learn more at dsclogistics.com/solutions

COVER STORY

BY LARA L. SOWINSKI, JOHN R. YUVA, AMY WUNDERLIN

IoT

IS CREATING A MORE PROACTIVE FOOD SUPPLY CHAIN T

he complexities of global food supply chains are compounding the challenges of visibility, compliance and maintaining product freshness. Simply put, longer supply chains with multiple modes of transportation and touch points make it difficult for stakeholders to access real-time information that they can act upon. Add to that the quick and accurate response that’s required in the case of a recall, and it’s obvious that there are gaps that need to be addressed. Jason Andersen, vice president of business line management at Stratus, agrees that, “Food and beverage is one industry that can benefit from Industrial IoT (IIoT) tremendously, as increased connectivity can improve quality, safety and efficiency while also optimizing overall production through predictive maintenance and reduced operational costs.” When it comes to food manufacturers in particular, there’s a continual need to increase speed and efficiency during the manufacturing and production process without compromising food safety, which requires food manufacturers to first modernize their automation systems and IT infrastructures, explains Andersen. “This can be done with IIoT’s

FOOD LOGISTICS | MARCH 2019

FLOG0319_18-25_COVERSTORY .indd 18

intelligence and speed, combined with its devices’ abilities to connect throughout the supply chain and production process to collect operational data,” he says. Yet, “While IIoT promises revolutionary improvements in efficiency, achieving success will be an evolutionary process for most food manufacturers,” he says. “A ‘rip and replace’ model of implementation is not feasible in these environments,

Scharfsinn86 / iStock / Getty Images Plus

The data extracted and analyzed from IoT provides those in the food and beverage industry with real-time variables to operate the most efficiently and cost effectively.

so manufacturers that wish to modernize should begin so by using IIoT to connect and supplement their existing automated systems for the most seamless transition.” Once this process is started, “IIoT will also play a critical role in making sure that food manu-

facturers are meeting regulatory demands,” says Andersen. “For example, traditional hazard analysis is done through collection of sample lots and sending them to labs for analysis—but in the future, we’re more likely to see automated, in-line analysis at the manufacturwww.foodlogistics.com

3/12/19 2:58 PM

While IIoT promises revolutionary improvements in efficiency,

achieving success will be an evolutionary process.”

wabeno / iStock / Getty Images Plus

Jason Anderson, vice president of business line management, Stratus

ing facilities. This real-time analysis is crucial, as it enables manufacturers to identify problems faster than ever, giving them the opportunity to mitigate potentially catastrophic events before reducing waste and associated costs.” In addition to boosting the ROI for food and manufacturers, implementing IIoT also gives them an opportunity to better understand consumers, which in turn becomes truly transformational for the business, he says. “IIoT can track consumer sentiment on social media, simultaneously feeding that insight into business analytics to positively influence production efficiency and marketing.” Despite the advancements IoT has brought to the food supply chain, there are still some weak links along the chain, points out Elemica’s Chief Technology Officer, Arun Samuga.

Consider the end-to-end food supply chain, starting with the farm all the way to the consumer, and then add to that the hardware, devices and sensors that are capturing data along the entire chain. It’s not surprising that it takes a great deal of infrastructure to collect all this

IIot has the potential to boost ROI for food manufacturers, while also giving them a better understanding of consumers.

www.foodlogistics.com

FLOG0319_18-25_COVERSTORY .indd 19

data and then “clean it up so that it’s consumable,” says Samuga. Ultimately, it’s about being able to “derive some meaningful insights and take it to the next level so that you’re able to be proactive instead of reactive.” A proactive food supply chain

SeventyFour /iStock / Getty Images Plus

MARCH 2019 | FOOD LOGISTICS

3/12/19 2:58 PM

COVER STORY

continued

shotbydave /iStock / Getty Images Plus

can use the IoT together with machine learning to look at past trends, past patterns, to glean intelligence and optimize IoT is most useful supply chains for improved when it is usable by performance. the most people However, there needs and the most to be open standards for operability of IoT devices, companies.” and that raises concerns Clark Stevens, Open Connectivity Foundation around data security, acknowledges Samuga, which does present somewhat of a barrier to entry. Nonetheless, progress is happening on this front, he says. The Open Connectivity Foundation is an industry group that is sponsoring an open source project to connect billions of connected devices so they can communicate with one another regardless of manufacturer, operating system, chipset or physical transport. Clarke Stevens, chair of the data model tools task group and vice chair of the data modeling work group at the Open Connectivity Foundation, told the SDTimes that, “The true potential for IoT—just like More devices will the internet—is in interoperability. be connected to the “Simply developing a new app internet as cellular networks improve for each new device and ecosystem around the world. isn’t conducive to scaling. For devel-

FOOD LOGISTICS | MARCH 2019

FLOG0319_18-25_COVERSTORY .indd 20

opers to succeed, quick, secure and interoperable development is key,” he says, adding that, “IoT is most useful when it is usable by the most people and the most companies.”

IoT Applications Evolve Once a buzzword, IoT has eclipsed what many thought possible for the technology. Yet, companies across industry sectors find innovative ways to incorporate IoT into their operations for better transparency and supply chain efficiencies. According to Statista, the install base of globally IoT-connected devices is expected to grow from 15 billion in 2015 to 75 billion in 2025. How does the food and beverage (F&B) industry fare in those numbers? Global Market Insights reports that in 2016, 16 percent of the IoT market share was claimed by F&B applications. IOT MARKET INFLUENCERS Paul Washicko, senior vice president, product management for CalAmp, a leading telematics and technology solutions company, says several trends are influencing the IoT space. Network transitions for cellular carriers in the U.S. and around the world are opening the door to more targeted IoT products

for both fixed assets and mobile apps. It’s contemplated that millions of more devices will be connected to the internet. “Cost curves are trending downward, allowing companies to monitor more devices cost effectively,” says Washicko. “Previously, monitoring was limited to high-value assets. Today, unpowered asset monitoring is possible—where three years ago this was cost prohibitive. The lower cost to transmit data among many IoT devices also helps make this feasible.” Another critical trend propelling the IoT market, says Washicko, is the regulatory environment. Regulations themselves are requiring more electronically connected devices, such as the Electronic Logging Device mandate in the trucking industry. However, similar monitoring requirements are occurring for food shipments in accordance with the Food Safety What IoT Modernization Act brings to the (FSMA). table with new “Food shipments technologies, may have been new solutions monitored but only and new at the coarse level. product sets A reefer truck with one sensor to monichanges tor trailer temperathe ture, for example,” game.” says Washicko. Chris Bursey, “However, tempresident of Direct Communication perature gradients Solutions within a trailer can fluctuate from one area to another. The ability to temperature monitor all aspects at a granular level from a pallet to a package provides more precise monitoring in compliance with the regulations.” Chris Bursey, president of Direct Communication Solutions (DCS), agrees, and says it all comes down to how you can run your business efficiently and create ROI. “What IoT brings to the table with new technologies, new solutions and new product sets changes the game,” says Bursey. “You’re no longer relying on a person to monitor your machine; that machine is www.foodlogistics.com

3/12/19 2:58 PM

g n i c u ntrod

• IoT for Your Loading Docks • Dock Activity and Analytics • Text and Email Notifications

www.LoadingDockSystems.com/iDock

FLOG0319_18-25_COVERSTORY .indd 21

Booth #1171

3/12/19 2:58 PM

continued

Vladimir Zapletin /iStock / Getty Images Plus

COVER STORY

A reliable monitoring system not only preserves my perishable inventory but

protects my overall brand.” Darrel Brown, founder and owner of Savagewood Brewing Company

telling you when a problem exists before it becomes a disaster.” SAVAGEWOOD BREWING COMPANY This type of IoT monitoring is what CalAmp and DCS bring to the restaurant and beverage industry. As a channel partner of CalAmp, DCS integrates the company’s tools and equipment into innovative solutions for DCS customers. Bursey says in a F&B environment, the ability to monitor temperature thresholds, CO2 levels and humidity in walk-in refrigerators is business critical. Within a bar or restaurant, draft beers and sodas run on CO2. A service company checks those levels every couple weeks to refill the tanks if they’re low. Bursey says eventually Murphy’s Law occurs and the CO2 runs out prior to the scheduled service visit. The inability to serve draft beer or soda at 5:00 p.m. on a Friday is crippling to the establishment. “We want to come to market with unique IoT solutions based on CalAmp technologies that allow bar and restaurant owners to remotely monitor and monetize their operation,” says Bursey. “Thus, prior to

FOOD LOGISTICS | MARCH 2019

FLOG0319_18-25_COVERSTORY .indd 22

izusek / E+ / Getty Images

The ability to monitor temperature thresholds, CO2 levels and humidity in walk-in refrigerators is critical for food and beverage companies.

a dry CO2 tank, an alert is issued, a service call is made and the tank is refilled without downtime or business interruption.” In the case of Savagewood Brewing Company, an opportunity presented itself amid a routine Friday afternoon meeting at the brewery. The brewery’s owner shared with Bursey’s team that a glycol chiller failed during the fermentation process. The chiller is critical to pumping beer through a long draft beer system. If it fails, not only is the beer warm, but it stops pouring. There was a loss of thousands of dollars in spoilage and the brewery’s brand could have suffered. A solution to the problem was quickly implemented. “We asked the owner for feedback and input about the long draw

system. It resulted in a DCS solution based on CalAmp technology that notifies staff via text and email of any temperature fluctuations in the glycol machine,” says Bursey. “The solution addressed multiple issues ranging from health and safety to temperature compliance and brand protection, ensuring sustainable cold beer, CO2 levels and revenue streams. We’re helping craft breweries and restaurants protect their highest-margin products, the safety of their customers and their brand.” According to Darrel Brown, founder and owner of Savagewood Brewery, “Before implementing the glycol chilling solution, we had no way of knowing about a system failure, and more importantly, did not have access to information to take action to avoid an inventory loss. Today, I have peace of mind knowing I will get alerted in the event of an equipment malfunction,” says Brown. “Having a reliable monitoring system not only preserves my perishable inventory but it also protects my overall brand and customer experience.” ENDLESS IOT POSSIBILITIES Whether it’s a small- to medium-sized F&B business like Savagewood Brewing Company, or a large food manufacturer, IoT is poised to drive efficiencies and ROI. Washicko of CalAmp says nearly everything has the potential to be monitored in the future. IoT will leave field service operators to focus on the most severe issues. “The real promise of IoT is its ability to bring new efficiencies to businesses by enabling them to deploy resources in a more productive way to drive more revenue,” says Washicko. “Processes that require human involvement to check enviwww.foodlogistics.com

3/12/19 2:58 PM

ronmental factors will be replaced with sensor equipment transmitting those readings remotely. IoT is much more targeted and efficient, and it will change everything.”

Many of those changes are already occurring in the regulatory environment. Regulatory pressures and recall prevention are big drivers of IoT implementation across the supply chain, but limiting the financial toll of product loss and spoilage has become attractive too. IoT-enabled solutions enable each player in the food supply chain to monitor the condition and location of their products in any environment throughout their journey. Consider temperature monitoring, for example. There are a number of reasons companies utilize sensors for this purpose. According to Andrew Dougherty, vice president of sales for SmartSense

volkansengor / E+ / Getty Images

Preventing Product Loss and Spoilage in Transit

by Digi International, FSMA is one big driver as more regulations are mandating it, while some companies are simply trying to avoid a food safety disaster. “They understand what lasting damage that can have on the brand and the equity value,” Dougherty notes. “They look at companies like

Chipotle and say, ‘We don’t want that to happen to us.’” Others, he adds are financially motivated and look to IoT devices to avoid lost or spoiled product. Intel recently unveiled a solution, the Intel Connected Logistics Platform (CLP), to address those issues. The goal of the platform is to

Connect and Transform Your Supply Chain with the Leading Digital Supply Network

For more information www.elemica.com www.foodlogistics.com

FLOG0319_18-25_COVERSTORY .indd 23

MARCH 2019 | FOOD LOGISTICS

3/12/19 2:58 PM

COVER STORY

continued

Intel’s Connected Logistics Platform uses IoT sensors to monitor assets and reduce product loss. Intel

DATA FROM INTEL’S CONNECTED LOGISTICS PLATFORM

provide near real-time visibility to help monitor the quality, integrity and security of shipments while on the move. “Quality control of your supply chain is more than saying, ‘Oh yeah, I can cut that route down by 15 minutes.’ That’s good and that’s productive, but I think the bigger impact is in quality control,” says Chet Hullum, general managThere is the er, IoT product management ability in real at Intel. time to take For Driscoll’s, a Califoraction and nia-based seller of fresh ensure berries, for example, quality that and temperature control of product produce is critical for longer isn’t lost.” shelf life. By using Intel CLP, Driscoll’s was able to see Andrew Dougherty, vice president of temperature variations sales for SmartSense across different vendor by Digi International trucks and track temperature fluctuations, humidity effects, shelf life and third-party logistics performance, resulting in reduced customer shipment rejections due to temperature excursions and deteriorated quality. Intel CLP also allows them to make near real-time decisions on the move.

FOOD LOGISTICS | MARCH 2019

FLOG0319_18-25_COVERSTORY .indd 24

75%

of shipments show temperature excursions The length of temperature excursions varies between

22% & 59% of transportation time

HUMIDITY

levels in trucks quickly rise to 80-90% within 12 hours after departure Under moderate weather conditions, temperatures in sea containers can rise TO 26 DEGREES C, while outside temperatures are only 16 degrees C

“Now they can communicate with their supply chain and make changes and do things on the fly,” says Hullum. For example, if a producer is notified that its truck delivering strawberries and grapes to a retailer has gone bad or shelf life has been compromised, the load can be diverted to a manufacturer like Smucker’s to make jam instead of trying to sell the produce at a retailer. Before IoT existed, however, monitoring truckloads once they left the warehouse was nearly impossible. More robust technology—and at a much lower cost—has now made IoT an essential part of many companies’ supply chains. “At the warehouse and distribution point of the supply chain it is very easy to set up temperature monitoring, and if there are temperature excursions, supply chain and facility managers are getting alerts that help them take corrective action to keep product from spoiling. The more difficult problem to solve is once the goods in that warehouse are loaded on a truck for delivery,” explains Dougherty. Thanks to advancements in IoT, now if there is a temperature excursion in the reefer, the driver and the fleet or logistics manager can be notified in real time much like in the warehouse. “There is the ability in real time to take action and ensure that product isn’t lost and that food safety standards are not violated,” adds Dougherty. Hullum notes these innovations are made possible with the marrying of IoT data with big data and cloud data. “It’s managing the supply chain better by having the insights to do so,” he adds. Many companies are also using a more passive approach to temperature monitoring to help reduce the acceptance of less-than-optimal shipments by installing a gateway, which pulls data off of IoT sensors at the shipping point, and another gateway at the ship-to point or destination. The sensors start www.foodlogistics.com

3/12/19 2:58 PM

reporting data as they hit that first Digi’s SmartSense can also detect gateway at the beginning of the if a truck door or roll door on a voyage. At the end of the voyage reefer is open or closed. This “really (the destination), all the data is gets into driver behavior,” explains downloaded and the shipper can Dougherty. “Are they leaving the decide whether to accept door open during a dethe shipment based on its What they livery and letting cold air temperature profile. escape? really want “That’s not real-time GPS data is also importto know is: data, but it gives them ant to know if a truck or What’s the confidence that the temperature of load arrives at the expectproduct integrity is what ed distribution center. the it should be because they Through data analysis product can see its temperature of these key metrics, it in the profile,” notes Dougherty. is now even easier to truck.” “You can download the understand a product and Andrew Dougherty, temperature profile and make decisions to further vice president of say, “I want to accept this sales for SmartSense enhance its shelf life. by Digi International shipment or reject it based “People want to know on its temperature history about the temperature in on its journey to me.’” the pallet or in the reefer, but what A product’s temperature profile they really want to know is: What’s is comprised of several important the temperature of the product in metrics, which can be collected and that truck?” says Dougherty. analyzed to prevent product loss Data analysis is helping Digi and damage. International answer that question Humidity is especially important. for its customers. The company has

When

invested a lot of time and resources in the space, specifically in what it calls virtual product simulation. Virtual product simulation allows the company to create software models of different food products that are being shipped. While sensors record the ambient temperature around those products, Digi is able to simulate what the actual product temperature is based on those sensor readings. “We’re able to say, ‘Alright, while our model is predicting that your ambient temperature is at 50, we know based on historical data that your ground beef is only at 38, so you don’t need to discard that product right now,’” Dougherty explains. As the ROI equation continues in a favorable direction, the food and beverage industry should expect additional advancements in data analysis that will not only improve their bottom line but lend a hand to a safer and more secure food supply chain.

COLD TEMPERATURES or WET FLOORS are an ISSUE,

WE HAVE YOU COVERED.

Cushothane® EZ™

The Cold or Wet Storage Specialist In cold or wet applications, competitor compounds are chunking, tearing and losing traction. Cushothane® EZ™ is specifically designed with our highest chunk and tear resistance along with increased traction and grip, even in extreme cold temperatures of -10ºF or less for ice cream and novelties.

Give us a call or visit www.SuperiorTire.com to find out if your truck falls into these usage applications.

40 Scientific Road, Warren, PA 16365 1.800.289.1456 | www.SuperiorTire.com

Product photo is for representation only.

www.foodlogistics.com

FLOG0319_18-25_COVERSTORY .indd 25

MARCH 2019 | FOOD LOGISTICS

3/12/19 2:58 PM

THIRD-PARTY & REFRIGERATED LOGISTICS

BY MARY SHACKLETT

Visibility is getting better, faster and cheaper.

he New Silk Road will link China to the Middle East and Europe by intermodal rail and road, cutting the current 40-45 days of transit via sea freight to 16-18 days over land. However, the route traverses harsh terrain and severe weather as it snakes through parts of China, Kazakhstan, Russia, Belarus, Poland and Germany.

Temperatures can reach minus 40 degrees Celsius in the winter—an unacceptable level for perishable goods that can range from foodstuffs to notebook computers. “If you talk this type of transportation, telematics is one of the most important requirements,” says Jan Koolen, managing director of Unit 45, an intermodal transport company. With telematics, logistics companies can monitor temperatures inside of containers and detect needs for engine and other truck or rail maintenance, so the right technicians and parts can be ready to effect a repair at the next stop— and know at any given point in time where cargo and transport vehicles are. All are indispensable tools for goods track and trace.

Protecting Perishables “Food safety and food waste benefit the most from track and trace technology,” says Krenar Komoni, CEO and founder of Tive, which provides in-transit supply

chain visibility solutions. “It includes traceability and tracking from the producer to the consumer and is a vital safety component, given the fact that one in 10 persons in the U.S. will experience an episode of food illness this year.” Christian Allred, senior vice president and general manager of global sales for IoT and M2M provider Orbcomm, agrees. Allred also places track and trace within the broader category of Internet of Things (IoT) accountability that sensors, software, equipment and mobile devices now provide. “Today, live data from hundreds of thousands of smart reefer trailers, containers, vans, pallets, packaging and other food chain assets is being used in domestic and cross-border operations to improve asset allocation, utilization and maintenance; drive scheduling and operating efficiencies; reduce cargo damage, waste and loss; boost visibility into delivery cycles; and enable safety, quality and regulatory compliance,” says Allred. “Modern IoT devices don’t only locate, they

hakule/DigitalVision Vectors/Getty Images

FOOD LOGISTICS | MARCH 2019

FLOG0319_26-31_3PL.indd 26

metamorworks / iStock / Getty Images Plus

TRACK AND TRACE IN THE FOOD SUPPLY CHAIN

www.foodlogistics.com

3/1/19 10:36 AM

AVOIDING THE THAW.

THERMAL ENERGY STORAGE PROVIDES 38% MORE STABLE TEMPERATURES PLUS THERMAL BACK-UP PROTECTION FOR SAFER FOOD THROUGHOUT THE GLOBAL COLD CHAIN. Intelligent energy storage means frozen food stays safer by decreasing temperature fluctuations and dramatically slowing its rate of rise while reducing energy costs up to 35%.

• STABILIZE TEMPERATURES • EXTEND THERMAL BACKUP: 3X • IMPROVE FOOD SAFETY • REDUCE ENERGY COSTS UP TO 35%

vikingcold.com/fl

FLOG0319_26-31_3PL.indd 27

3/1/19 10:37 AM

continued

The ability to verify perishable cargo condition throughout the supply chain

has huge value for producers and retailers.”

yoh4nn / E+ / Getty Images

Christian Allred, president and general manager of global sales, Orbcomm

also sense and trace—everything from temperature to humidity to atmosphere composition to shock to tampering. Optimizing shelf life for perishables is of course one of the key benefits.” Because IoT technology tracks and monitors the condition of refrigerated transport assets and their cargoes in real time, any deviation from the required temperature, humidity or other key conditions can be quickly identified. “This could be because a reefer unit wasn’t plugged in, there was a machine malfunction, the refrigeration machinery wasn’t set correctly, or the doors were left open too long during load/unload,” explains Allred. “Hand offs are frequently the weakest links in the chain.” In addition, because IoT monitoring and tracking enables companies to detect problems from afar, including remote adjustment of transport unit temperatures, damage and loss are also reduced. “Beyond shelf life, the ability to verify perishable cargo conditions through the

FOOD LOGISTICS | MARCH 2019

FLOG0319_26-31_3PL.indd 28

supply chain also has huge value for producers and retailers who are looking to validate food quality and safety and build consumer trust,” says Allred. “And these days of course, shelf life might not even be in a retail store. “Food e-commerce and home delivery are changing the fundamentals of food logistics and online shopping, and mobile apps are breeding more educated and demanding consumers who expect greater traceability, safety and sustainability,” he adds. “IoT devices and sensors will play a key role in providing supply chain visibility right through from point of production to the end consumer.”

Overcoming Adoption Hurdles The best news for food supply chains and perishable goods is that the companies engaged with

vitpho / iStock / Getty Images Plus / Getty Images

3PL

them have awareness of the need for track and trace and full supply chain visibility. However, it remains a challenge to fund the technology and business process changes that are needed. “Adoption today is far more a when, not if conversation for many traditional reefer transportation and cold chain players, whether over-the-road, intermodal or maritime,” says Allred. “Food logistics is being disrupted by multiple external forces, and transportation providers are increasingly aware that they must have a digital transformation strategy in place to stay competitive. The past few years have seen some very large deployments across fleets that are tens or hundreds of thousands strong, as well as many small operators.” Nevertheless, upfront costs are still a barrier in many organizations. Yet, this is an area where vendors can help, especially if they can provide flexible financing options. “Vendors can help customers by providing easy-to-use platforms, which help them modify business processes and then walk them through the creation of business value and ROI for technology investments that they are about to make,” says Tive’s Komoni. Buy-in from throughout the organization is also essential. “When companies adopt a supply chain visibility, or trackand-trace platform, they need to focus on how they can resource the project and set it as a key priority across the supply chain,” says Kathleen Marcell, vice president of customer success at FourKites, a provider of real-time visibility and predictive analytics. “If a company really wants to maximize the value of their supply chain visibility platform, they can’t just have one team using it. They need buy-in internally across the organization, including their carriers and other stakeholders, and they should focus on how the system impacts the organization as a whole. A visibility solution will uncover inefficiencies and www.foodlogistics.com

3/1/19 10:37 AM

There are cheaper ways to insulate. And, we never considered them.

Utility’s foam-in-place insulation provides the industry’s highest level of thermal performance by creating a 360 degree, continuous envelope of foam throughout the entire trailer. That’s every inch of the roof, walls and floor. Trusted by over 50% of the market, Utility delivers the best year after year. Visit your dealer or learn more at utilitytrailer.com © 2018 Utility Trailer Manufacturing Co.

FLOG0319_26-31_3PL.indd 29

3/1/19 10:37 AM

3PL

continued

tively, there must be buy-in and commitment to change across the entire organization.” operational challenges within an organization, but by itself, it cannot solve the issue. With the insights uncovered by the platform, users can then modify their operations to maximize efficiencies across their supply chain. And to do so effec-

Current Track and Trace Issues Track and trace technology is making inroads in food safety and food freshness and spoilage prevention. But there are still track

The IoT data ecosystem needs to allow users to integrate

multiple smart devices and suppliers.”

metamorwor / iStock / Getty Images Plus

Christian Allerd, president and general manager of global sales, Orbcomm

and trace technology issues that the industry needs to tackle. Chief among these are improving battery life and durability for devices and achieving interoperability for companies that are using multiple vendors and systems.

 IMPROVING BATTERY LIFE Sensors and other IoT devices depend on extended battery life as they are deployed in or moved through remote locations where they can’t be easily serviced. To improve battery performance, vendors are making telematics devices smaller and using rechargeable batteries, solar power and energy harvesting. “We use both satellite and cellular networks to ensure connectivity in even the most remote locations,” says Allred. “We also implement robust designs that can withstand extremely harsh environments…If we can do this and deliver devices that are self-powered with solar recharging technology or low-power consumption and long service life, we can eliminate the need for frequent battery changes.”

 INTEROPERABILITY

BOOSTING TRACK AND TRACE WITH BLOCKCHAIN

By Lara L. Sowinski John Monarch, CEO of ShipChain, which recently launched a blockchain-based track and trace platform, sees blockchain as the underlying layer of an entire ecosystem that includes information culled from a variety of sources throughout the supply chain. In this respect, blockchain is able to truly elevate track and trace to a new level. “Blockchain provides an underlying system of trust that everyone can put data into,” he says. Food safety is something that stands to benefit considerably from blockchain, adds Monarch, whether it’s from the perspective of regulators, logistics providers or consumers. “There’s increasing demand from consumers today to know where their food came from and to verify things like organic and non-GMO certifications,” he says. For logistics providers that need to comply with the Food Safety Modernization Act, for example, blockchain offers a way to verify compliance instead of relying on manual recordkeeping or other methods. ShipChain conducted a successful pilot program with Perdue Farms before launching its track and trace platform in February. According to Monarch, “When we created ShipChain nearly two years ago, we had a vision of revolutionizing a clumsy, outdated and expensive shipping network.” The track and trace platform brings a new level of transparency and visibility to the logistics industry by allowing shippers to view specific details of their freight, identify potential bottlenecks and imp rove operations on a continuous basis.

FOOD LOGISTICS | MARCH 2019

FLOG0319_26-31_3PL.indd 30

The slow evolution of common standards for connectivity and data exchange in the IoT world and proprietary operating systems by IoT manufacturers are two major setbacks for track and trace and supply chain automation. The emergence of cloud-based platforms that can interoperate with many different types of IoT devices and sensors is starting to bridge the gap, however. These platforms are capable of collecting and aggregating data from many different IoT sensors, devices and systems—and bringing them all together on a common platform. “APIs and interoperability are crucial to avoid creating new data silos,” explains Allred. “The IoT data ecosystem needs to allow users to integrate multiple smart devices and suppliers, plus other information sources, which is exactly what we are doing today.” www.foodlogistics.com

3/1/19 10:37 AM

Taking Track and Trace to the Next Level There are many companies that have aggressively adopted track and trace and full visibility of the supply chain with great results, yet others are lagging. Adoption still plagues small- to mid-sized companies because they often lack the internal expertise and financial resources to move forward. Yet, even for these companies, solutions like track and trace are becoming more affordable and easier to adopt. Smaller suppliers are also receiving mandates to adopt from key business partners and customers. For companies looking to enhance their track and trace and supply chain visibility journey, here are four key recommendations:

➊ PERFORM A FEASIBILITY STUDY BEFORE IMPLEMENTING NEW TECHNOLOGY According to Tive’s Komonil, a feasibility study doesn’t require

anything more than a small team. He suggests first evaluating “the systems you already have in-house. What are the holes you are trying to plug? Can you simply upgrade your systems, or do you need to augment or replace them?”

➋ PERFORM A PROOF OF CONCEPT The proof of concept begins with an RFI or RFP that you deliver to prospective vendors, followed by narrowing the field of vendors down to two or three, says Komoni. “Be sure to evaluate the vendors not only for their solution, but for their ‘fits’ with the culture and systems of your organization,” he adds.

➌ THOROUGHLY INTERVIEW YOUR PROSPECTIVE VENDORS According to Allred, here are some questions you should ask prospective vendors: • What is your track record, scale and scope of operation? • What is your R&D budget?

• How have you helped other users deploy and scale? • How have others deployed your solutions beyond simple track and trace? • Do you offer support services? • Do you offer a complete package of devices, software and network connectivity? • Do you have cloud and mobile apps? • Are your solutions interoperable?

➍ HAVE A VISION FOR WHERE YOU WANT YOUR TECHNOLOGY INVESTMENT TO TAKE YOU “Companies need to glean insights from their raw data that allows them to make performance improvements across the board,” says FourKites’ Marcell. “The data provides a broad, comprehensive overview of their supply chain operations, but also gives them ability to drill down into specifics about facilities or distribution centers, and gives them a clear understanding of their operations.”

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.

Real-time farm to fork cold chain visibility Partnering to protect your customers and your brand.

Temperature monitoring

Product movement traceability

Learn more or try a pilot. contact@controlant.com — controlant.com

www.foodlogistics.com

FLOG0319_26-31_3PL.indd 31

24/7 monitoring and response

Analytics and insights

MARCH 2019 | FOOD LOGISTICS

3/1/19 10:37 AM

FL 2019 CHAMPIONS AWARD

BY MACKENNA MORALEZ

FOOD LOGISTICS NAMES

WITH A VISION TO MAKE THE WORLD A SAFER PLACE, IFOODDECISONSCIENCES’ DIANE WETHERINGTON HAS BEEN NAMED FOOD LOGISTICS’ FIRST CHAMPION OF THE YEAR

he United States was thrown into a frenzy when E. coli-contaminated spinach left three dead and sickened over 200 people in 2006. One thing was clear after the outbreak, food safety improvements were needed across the entire supply chain. Diane Wetherington, CEO of iFoodDecisionSciences, was just starting out in the industry when the 2006 outbreak occurred. She began working with industry We already have leaders supporting efforts to improve food safea very complicated supply chain, so having ty practices; however, and using the best Wetherington quickly realized the importance of technology and software examining data and identifying trends to advance available is continuous improvement. critical.” Having a background in technology, she determined that documenting this important data with paper records not only slows down the entire food safety process, but also exposes it to more

FOOD LOGISTICS | MARCH 2019

FLOG0319_32-39_Champ .indd 32

errors—potentially risking more lives. “After the E. coli outbreak and new regulations in the industry were formed, we saw that companies were collecting a lot of the information on paper. There was very little technology in place to help companies manage their risk,” Wetherington says. Wetherington’s vision for a safer world helped her form iFoodDecisionSciences in 2013, and makes her an excellent candidate for the first ever Food Logistics’ Champion of the Year. The annual award recognizes the industry’s most influential professionals for their hard work, vision and leadership in shaping the global food supply chain. Serving as the CEO of iFoodDecisionSciences, Wetherington helps to develop data management software solutions to meet the increasingly complex needs of growers, harvesters, coolers, packers, processors and shippers. Under her leadership, the company works with businesses across the produce industry to

configure software that meets their data needs. In the last five years, the company has grown to become a leading food safety software provider in North America and has expanded internationally. “We really created the company to address industry needs. Food safety people will say—even today—that they spend about 60 percent of their time managing documents and paperwork. We recognized that there was an easier way to do that using software, and then use the data to improve processes.” Shortly after making its debut, www.foodlogistics.com

3/12/19 3:35 PM

iFoodDecisionSciences unveiled its core product, The Toolbox. As a software module, The Toolbox enables individual companies to manage their food safety operations, showing real-time data to people they work with internally and throughout the supply chain. “We already have a very complicated supply chain, and it’s constantly changing—so having and using the best technology and software available is critical,” Wetherington explains. “Software in this industry has really evolved because of smartphones and tablets,” she continues. “That has made a difference for companies in how they collect data as well as how they manage their operations in real time.” As more companies look to adopt emerging technologies, Wetherington continues to ensure that her software is user friendly. She and her team set up and manage the iFoodDecisionScience’s platform for the customer so it can focus on its food safety operations. Additionally, clients are able to learn how to operate the program within a day or two because of how easy it is to use. Wetherington stresses that techwww.foodlogistics.com

FLOG0319_32-39_Champ .indd 33

nology is crucial to the industry, especially as consumers continPROCESSING ue to demand more information POST DISTRIBUTION HARVESTING about where their food FARMING RETAIL comes from and how it got to the store. A scannable QR code is across the supply chain and uses Supply chain transparency is an easy way to implement technolit as an opportunity to develop essential to the ogy that provides that data. Supply solutions within her own company industry as more chain transparency is essential to to address industry needs. food safety measures the industry as more food safety For Wetherington, championing come into question. measures come into question. food safety will always be her top “With all the technology availpriority, and that vision for a safer able today, we have the ability to world has garnered her Food Logisquickly find issues and provide tics’ highest recognition. real-time alerts. Imagine 50 years “I went back and I was thinking ago. We had little ability to detect about the word ‘champion’ and how food safety issues, let alone trace there’s two different definitions of the origin of the problem,” Wetherit. There’s the person who surpassington says. “While the industry es everyone else, but then there’s still has a lot of work to do, we have the other one, and that’s someone come a long way.” who fights for a cause. I put myself Beyond her role at iFoodDeciin that category, and my cause is sionSciences, Wetherington also to minimize risk in the food supply serves on several industry-related chain,” she says. “It’s great to be reccommittees such as the Produce ognized as someone who is fighting Marketing Association’s Produce that cause.” Safety, Science and Technology Committee. She credits the trade Now let’s pay tribute to each of 2019’s associations for providing visibility Rock Stars of the Supply Chain... into challenges that are occurring MARCH 2019 | FOOD LOGISTICS

3/12/19 3:35 PM

MEET THE

2019 CHAMPIONS continued

MATT ANGELL Vice President of Logistics Operations, Jarrett Logistics Systems Matt Angell brings over 20 years of leadership experience to Jarrett Logistics, pioneering industry-leading tools that provide on-going strategic support for clients. He has a relentless focus on improving the client experience and has organized the 24/7/365 JLS Routing Center into a “control tower,” effectively managing the tactical operations of his clients’ daily supply chain needs. Angell has made JLS an industry-wide recognized business and plans to maintain its high-growth trajectory by continuing to invest in integrity-based talent and leading-edge supply chain technology.

NICK BANICH Partner, Miebach Consulting Nick Banich has spent the last decade in the supply chain industry, providing insight and optimization potential for regional and international networks. In recent years, he has focused on food and beverage producers to address three major trends in logistics: mergers and acquisitions, consumer demand for healthy food, and SKU proliferation. Banich believes that bringing facts back into focus can move the discussion around these trends toward the best interests of the business.

AARON CONWAY President, Mezzanine Safeti-Gates Inc. Aaron Conway has 23 years of experience in the industry and a passion for maintaining employee safety in the workplace. Under his leadership, Mezzanine Safeti-Gates has expanded its product line to encompass safety gates for all parts of a facility. Many of the safety gate models started as custom designs and have since been transitioned into standard models. In addition, Conway has worked with a number of food distribution centers and production facilities to help make employees safer, all while ensuring the supply chain operations are not impeded.

DON DURM Vice President of Customer Solutions, PLM Don Durm is an expert in cold chain transport application and regulatory compliance in the United States and most recently has been recognized for his interpretation and industrywide guidance on the Food Safety Modernization Act. Durm early on identified blockchain technology as the next industry disruptor. He is helping take the mystery and noise out of the crypto-lingo that comes with the territory, and helps the industry understand how technologyenabled intelligent assets can drive cost reductions and trust between trading partners, all while providing transparency. He remains directly engaged with technology disrupters to help regulators bridge the gap of practical application and with food processors and their supply chain to utilize the technology.

FOOD LOGISTICS | MARCH 2019

FLOG0319_32-39_Champ .indd 34

www.foodlogistics.com

3/12/19 3:35 PM

JIM BECKER CEO, Becker Logistics Since entering the logistics world in 1991, Jim Becker has relied on Becker Logistics’ core values of integrity, quality, safety, competitiveness, openness, respect and equal work-life balance. With these values at the forefront, Becker helps set relationships apart from many other 3PLs. Over the last decade, Becker has been the driving force behind Becker Logistics’ increased footprint in the food marketplace, focusing on additional refrigerated loads and new modes of revenue. The key to that success has been working with customers to identify efficiencies and areas of optimization, paired with on-time delivery, stellar customer service and the ability to manage their own supply chain through Becker’s TMS.

STEVE DOMONKOS Chief Operating Officer, National DCP LLC A proven leader with over 30 years of experience, Steven Domonkos serves as the chief operating officer for National DCP. He is a results-oriented, hands-on executive who drives his team to exceed company operational metrics year over year. With his extensive experience leading change management, he has driven results to improve enterprise-wide productivity, cost, quality and customer service objectives, while creating strong cross-functional partnerships to ensure sustainable continuous improvement.

www.foodlogistics.com

FLOG0319_32-39_Champ .indd 35

LUIS GRACA Applications Engineering Manager, Cimcorp Automation Ltd. Luis Graca works one-on-one with Cimcorp’s fresh produce, dairy, beverage and bakery distribution customers to drive efficiency and improve operations using robotic handling. By visiting each facility, he is able to understand and analyze each company’s pain points, and then design a concept for how Cimcorp’s solutions can optimize product handling. By working with Graca, customers quickly find opportunities to consolidate storage space, mitigate labor shortages and shorten lead times for maximized product freshness, ultimately transforming the way they do business.

MARCH 2019 | FOOD LOGISTICS

3/12/19 3:35 PM

2019 CHAMPIONS continued

CHRIS LAHTI Vice President of Distribution, Smithfield Foods Inc. In his role as vice president of distribution at Smithfield Foods, Chris Lahti oversees distribution and supply chain strategy. His extensive industry knowledge and leadership enable him to take a prominent role in company initiatives and helps improve Smithfield’s competitive position. Lahti played a critical role in consolidating and optimizing the company’s logistics network and supply chain, reducing costs by $29 million in 2017, with a handful of changes. In addition, Lahti has streamlined Smithfield Foods’ supply chain and distribution network, saving company drivers 147,000 miles, reducing fuel use by 17,200 gallons and lowering the company’s carbon footprint by 168 tons.

RICHARD T. MURPHY JR. President and CEO, Murphy Warehouse Company Richard T. Murphy Jr.’s leadership is driven in part by his design-thinking perspective. During industry presentations, he participates in creative conversation and often challenges audiences to participate in visual exercises that illustrate “thinking outside of the box.” Under his leadership, Murphy has grown Murphy Warehouse Company’s warehouse space by 175 percent and its revenue by 185 percent. He understands customers’ needs and delivers exceptional services while staying true to the company’s core values.

JEFFREY OWEN Founder and CEO, Lightning Technologies Inc. Jeffrey Owen is heralded in the state of Michigan as one of the state’s most successful visionaries and entrepreneurs. His notoriety and reputation have grown internationally as Lightning Technologies works to disrupt the logistics industry and others in the future. Owen has attracted more than $50 million from investors around the globe, allowing him to create two highly automated pallet manufacturing facilities. The company’s smart pallet has drawn national attention, even earning him the title “Prince of Pallets” by Forbes.

FOOD LOGISTICS | MARCH 2019

FLOG0319_32-39_Champ .indd 36

ANDREW MACEK President, OMNI Systems Since joining OMNI Systems in 2011, Andrew Macek has spent his time dedicated to improving both processes and employee satisfaction. He has worked to develop meaningful metrics for rapidly improved efficiencies and industry-leading process improvements. Under his leadership, OMNI has achieved 98 percent fill rates, 80 percent run efficiency and less than a 1 percent scrap rate, saving customers on average 15 percent to 40 percent of their label spend. In addition, Macek’s unwavering commitment to employee satisfaction has helped OMNI receive industry-wide recognition as one of the top workplaces for worker satisfaction.

STACEY PATCH Business Manager for the Raymond Virtual Reality Simulator, The Raymond Corporation As the business manager for the Raymond Virtual Reality Simulator, Stacey Patch’s daily responsibilities include managing the development and implementation of virtual reality products within the Raymond portfolio. She consistently leads the way in finding innovative alternatives to further the manufacturing industry, address the skills gap, and fill jobs with new and efficient talent. Throughout her time in the industry, Patch has been asked to lead several presentations at industry events. Her passion for VR technology comes from understanding the challenges that management faces when educating and training individuals. As technology continues to advance, Patch is eager to meet supply chain challenges.

www.foodlogistics.com

3/12/19 3:35 PM

JERRY RAU Chief Operating Officer, 3Gtms Jerry Rau’s unique background as both a vendor and a customer shapes his thorough and thoughtful approach to solving 3Gtms customer problems in the food logistics space and providing meaningful solutions that deliver lasting value. In his current role, Rau heads up all TMS go-to-market functions at 3Gtms, including sales, presales, account management, channels and marketing. While there are many industries that can benefit from transportation management, Rau believes it’s especially critical to help solve the complexities of the food industry.

www.foodlogistics.com

FLOG0319_32-39_Champ .indd 37

PRATIK SONI Co-founder and CEO, Omnichain Solutions Pratik Soni is a global executive and supply chain expert with a career spanning across the globe. At Omnichain Solutions, he works with consumer packaged goods brands and retailers to leverage blockchain technology to connect their supply chains for greater transparency, efficiency and profitability. Soni believes that blockchain provides a way to digitize and record every step of a product’s life cycle in a permanent, connected ledger. He is a natural entrepreneur and brings a wealth of expertise in supply chain design, implementation, technology and business strategy to Omnichain.

MARCH 2019 | FOOD LOGISTICS

3/12/19 3:35 PM

2019 CHAMPIONS continued

ADDITIONAL 2019 CHAMPIONS David Appel, president, Carrier Transicold & Refrigeration Systems Vitor Ayres Angelelli, director of product and solution architect, Neogrid, North America Matt Barry, director of solutions, North America, Quintiq Gary Barter, project director, Food Division, VAI Harold Baum, managing director, Dyna-Tabs LLC Joshua Blinick, chief technology officer, Blinco Systems Inc. Philippe Boisvert, director, Field Application Engineering, Plug Power Christopher Carey, vice president of supply chain, Clemens Food Group Darin Cooprider, vice president and general manager of consumer packaged goods, Ryder System Inc. Nicholas Couture, president, C3 Solutions Inc. Derek Curtis, vice president of sales, HighJump Stephen Dombroski, senior manager, consumer products and food & beverage vertical markets, QAD Inc. Allan Dow, president, Logility Scott Durgin, chief technology officer, Zest Labs Deborah Dutton, business analyst, Kuebix Marco Ehrhardt, CEO and president, Ehrhardt Partner Group Lindsay Glass, training and implementation manager, Iron Apple International Dan Gleeson, president, ACS Logistics Erik Gunderson , founding partner and executive vice president, Primus Builders Inc. Rohan Guthal, senior consultant, River Logic Danny Halim, vice president, distribution and logistics industry strategy, JDA Software Sean Henry, CEO and co-founder, Stord Michael January, director of warehousing, Ben E. Keith Foods Michael Johnson, CEO, Elite Transit Solutions Gary Keimach, senior vice president of inventory planning, Martignetti Katie Kelley, business development manager, Load Delivered Logistics Kristy Knichel, CEO, Knichel Logistics Krenar Komoni, CEO and founder, Tive Inc. Tom Krajewski, head of refrigerated cargo, Sealand Chris Kupillas, regional vice president, BlueGrace Logistics Stephane Labillois, vice president of transportation and logistics, Groupe Biscuits Leclerc Greg Lehmkuhl, president and CEO, Lineage Logistics Robert Lenski, solutions engineer, TEKLYNX International Julie McGill, director, implementation and strategic account management, FoodLogiQ Anthony Montuori, traffic manager, Rema Foods Inc. Brian Moynihan, director of sales and operations planning, Blommer Chocolate Peter Neiderud , director of supply chain, quality and environment, The Absolut Company, Pernod Ricard Heather Powell, director of major accounts and special projects, SafeSourcing Inc. Abi Ramanan, CEO, ImpactVision Eric Rempel, chief innovation officer, Redwood Logistics Nate Rosier, vice president of supply chain strategy, enVista Jason Rosing, co-founder and managing partner, Veridian Kelly Stoeckigt, director of logistics, Palermo Villa Inc. Geoff Turner, CEO and president, Choptank Transport Eric Weisbrod, vice president of product management, InfinityQS International Inc. Diane Wetherington, CEO, iFoodDecisionSciences Inc. Brian Wnuk, senior transportation manager, Brill Inc.

FOOD LOGISTICS | MARCH 2019

FLOG0319_32-39_Champ .indd 38

RICK TRIGATTI President, North America, Cimcorp Automation Ltd. As an experienced engineer and visionary, Rick Trigatti upholds Cimcorp’s mission to help customers simplify their material flow with innovative robotic systems. Under his leadership, the experts at Cimcorp work with clients across numerous industries to address their top business needs and identify solutions to their toughest material handling challenges. Trigatti’s vision has helped numerous food and beverage companies drive efficiency and productivity, eliminate errors, better utilize space, improve work conditions, ensure traceability and maximize product freshness.

VANESSA VILLEGAS Safety Manager, Universal Chain Inc. With 12 years of experience, Vanessa Villegas has developed and administered a food warehouse safety training program across nine states, covering over 500 employees. She works diligently to assure that businesses are legally compliant with all safety and health requirements and works with employees to manage, monitor and improve the health and safety standards of facilities. Villegas’ priority continues to be keeping employees safe while providing customers with exceptional service. www.foodlogistics.com

3/12/19 3:35 PM

MATT WAGNER Vice President of Sales and Marketing, Jarrett Logistics Systems As vice president of sales and marketing at Jarrett Logistics Systems, Matt Wagner manages the development and execution of strategy in order to drive profit growth within the organization. Wagner listens to clients’ supply chain challenges and delivers solutions to make their supply chains faster and more efficient. With a close attention to detail by mapping the entire value stream, he has been able to drive operational efficiency, provide immediate cost reduction and increase profitability for clients. Wagner has evaluated hundreds of different supply chains across a wide variety of industries and has participated in multiple kaizen events.

PASSIVELY POWERFUL HOW PASSIVE TEMPERATURE PROTECTION IS THE REAL COST SAVINGS WINNER ACROSS THE SUPPLY CHAIN

AIR FREIGHT

INTERMODAL

OVER THE ROAD

Passive Protection =

Cost Savings

Daily Temperature Change

Savings per move

$2-4K

vs. Active Protection

<1.5°

on Dry Intermodal Shipments

30%

vs. Refrigerated LTL

BILL WHELAN Director of Business Development, Matson Logistics Bill Whelan has an extensive history in food warehouse management. Under his direction, Foreign Trading Zone (FTZ) No. 56 at the port of Oakland has expanded steadily and operates at full capacity. He has developed niche markets and was among the first third-party operators in the U.S. to obtain organic certification for a third-party warehouse. Whelan has an unparalleled understanding of the complex set of trade rules governing FTZs, and works closely with clients to maximize reduced duty and duty exempt benefits. While FTZs have attracted new attention amid trade uncertainty and widespread imposition of tariffs, Whelan sees opportunities to work with food and wine importers and distributors on programs tailored to their unique needs.

MORE SUPRSING BENENFITS OF PASSIVE PROTECITON ADAPTABILITY

FLEXIBILITY

LTLs or Mixed Loads

No need for a reefer when only a few pallets need protection

Quantify Risk & Protect With Conﬁdence

PERFORMANCE

45* DAYS

Transit Time Protection *Includes Ocean Transit Time

PALLETQUILT

LEARN ABOUT REFRIGERATED LTL ALTERNATIVES

708-331-0094 www.qsales.com

www.foodlogistics.com

FLOG0319_32-39_Champ .indd 39

MARCH 2019 | FOOD LOGISTICS

3/12/19 3:36 PM

SECTOR REPORTS WAREHOUSING

BY AMY WUNDERLIN

THE RISE OF HIGH-TECH

COLD STORAGE

he cold chain logistics business is booming as improved technologies and counter-cyclical growing seasons in many parts of the world have made it possible to transport fresh, perishable foods from international to American ports. In addition to this extension of the global supply chain, consumers’ demand for an array of healthy, nutritious foods— both chilled and frozen—is placing further pressure on cold storage providers to accommodate a growing perishables cold chain, at both key ports and inland locations. As the demand for cold storage continues to outpace supply, shippers look to partners willing to front the capital investments necessary to build the highly-automated and advanced cold storage facilities of tomorrow. “There’s huge demand growth and demand spike for cold chain distribution to support not only the population growth, but also the shifting manufacturing and production footprints that are out there,” explains Carl Fowler, senior vice president of regional sales at Americold. Much of the cold chain infrastructure that exists today was designed to match the way we historically fished, farmed and produced, Fowler adds. For example, most of the fish that Americans

FOOD LOGISTICS | MARCH 2019

FLOG0319_40-43_WAREHOUSE.indd 40

Americold

Increased demand for healthy and convenient options, coupled with an everexpanding global food supply chain, has initiated a need for highlycomplex cold storage facilities.

consume comes from the Pacific, but there is still a large concentration of facilities in the Northeast that support the fishing industry. More cold storage is needed on the West Coast, however, to follow the industry’s evolution. But cold storage facilities are extremely expensive, and many companies are unable to make the investment on their own. “[This] speaks to why there’s such a constraint, because companies, producers, growers and manufacturers don’t really want to sink their capital into cold chain infrastructure; they’d rather leverage partners to do that,” Fowler notes, adding that third-party logistics (3PL) providers take on that risk by understanding the evolution of food and how it is produced, grown, manufactured and consumed.

Changing Buying Habits The food and beverage industry has become increasingly complex in today’s global supply chain, and changing consumer buying habits are driving innovation inside cold storage facilities as warehouse operators learn how to manage the proliferation of fresh, perishable and frozen foods. “As family demographics have changed and people are looking for faster, quick-prepared food, frozen is certainly filling that niche,” says Ernie Ferguson, vice president of sales and marketing for MTC Logistics. “You don’t need to do anything more than think about the number of aisles at the grocery store filled with frozen food cases versus five years ago.” A larger mix of frozen and fresh www.foodlogistics.com

3/1/19 11:34 AM

COLD STORAGE DOWN COLD

FLORIDA’S ULTIMATE REFRIGERATED SUPPLY CHAIN SOLUTION • 135,000 square foot state-of-the-art facility • On-site CBP ag specialists • On-site USDA and CBP inspection, CBP lab • 102 reefer plugs • On-site dedicated temperature controlled fumigation services • 6,348 racked pallet positions using Interroll gravity fed rack system • Chilled and frozen capacity • Proximity to Florida’s largest and fastest growing region and the heart of the state’s grocery/food and beverage sector • On-site radiation portal monitors • Surplus truck capacity in Tampa for competitive cargo deliveries throughout Florida and Southeast U.S. • Safe, food-grade glycol refrigerant used throughout • Global container connections, including new Asia-direct services • Gateway to Mexico and Latin America

1101 CHANNELSIDE DRIVE, TAMPA, F LORIDA 3 3 6 0 2 WW W .PORTTB.COM | 800-741-2297

FLOG0319_40-43_WAREHOUSE.indd 41

3/1/19 11:34 AM

SR: WAREHOUSING

Having the site flexibility to not only turn the temperature dial but to compartmentalize the asset...

requires significant capital investment.”

goods, however, entails a wide range of storage temperature requirements. A room full of strawberries, for example, will not thrive in the same room as ice cream. “Cold treatment for produce is different than it is for vegetables than it is for bakery. Thus, having the site flexibility to not only turn the temperature dial but to compartmentalize the asset by building walls in rooms that are flexible enough to match shifting demand requires significant capital investment,” notes Fowler. “One of the most difficult things to do in this industry is to forecast what demand is going to be two, three and four years out. Skew proliferation in our grocery retail outlets is exponentially higher than what it was 10 years ago, so that corresponds with the complexity and variety of temperature zones that we need to support for downstream distribution activity,” he adds. “The best way that we’ve found to do that is through collaboration on what demand looks like and what’s needed.” Americold works with it partners to understand the temperature profiles of the participants in their markets. This creates an opportunity to have flexibility in the types of products its partners can serve and is especially important, Fowler says, when retrofitting an existing facility.

Americold

Carl Fowler, senior vice president of regional sales, Americold

continued

FOOD LOGISTICS | MARCH 2019

FLOG0319_40-43_WAREHOUSE.indd 42

“You have to have a strong view on what the market demand is in that geography before you invest all that capital to convert an existing facility,” he adds. According to Greg Lehmkuhl, president and CEO of Lineage Logistics, companies have been forced to move closer to their customers in order to create these profiles, which help them understand and predict their customers’ buying behavior. In turn, cold storage facilities are now also moving closer to their customers. “By collaborating and sharing data with both the suppliers and the retailers, we are helping to dramatically change the way product moves through the supply chain and ensure fresher, more convenient items that are available when and where the consumer wants it,” he adds. In addition to a shift in asset location and variable temperature capabilities, the modern cold stor-

age facility has become increasingly complex, featuring more automation, robotics and technological innovation. New facilities often feature infloor heating to prevent moisture from freezing and to prevent the cement from cracking, as well as internal storage areas to support different temperature zones. Drains and water reclamation plans are common when dealing with produce or floral, and the ability to handle other value-added services is essential. Fresh produce that has a short shelf-life such as apples, oranges and kiwis require quicker turns, which means your warehouse also must be able to support increased traffic to and from your facility. “Our customers are looking for more complex supply chain solutions,” adds MTC Logistics’ Ferguson. “When I got into the cold storage side of the business almost 20 years ago, it was really about moving a lot of full pallets through the facilities. Now, we’re touching cases constantly. We also have customers that are looking for us to do different things that might traditionally be done at the processing plant.” MTC Logistics broke ground in December on a 300,000 squarefoot, $58 million, cold storage facility on property owned by the Alabama State Port Authority in Mobile, Alabama. This new facility will feature advanced automation and technology to address a lack of labor availability and the increased turns required for temperature-sensitive product. Specifically, a relatively new-to-the-U.S. technology called mobile racking will increase the number of rack pallets in position within a facility to maximize space, which is especially important in facilities around ports and on the East Coast and the Southeast where there’s a limited amount of land at a premium cost. MTC Logistics is also considering the installation of an automated storage and retrieval system (ASRS), which is even more automated than a mobile racking system. “[In Mobile] we’re looking to be www.foodlogistics.com

3/1/19 11:34 AM

cognizant of that labor component,” Ferguson says. “Demand will continue to increase as the economy maintains strength. We’ve got to find ways to automate the facilities more because of the labor situations that we’re all dealing with.”

Expansion of the Global Supply Chain While investments at ports have historically been low, the globalization of the food supply chain has created increased demand for import and export services. In regards to fresh food imports, “In the last 10 to 15 years, the Fowler says there has been under economy has certainly become a investment there as well. While true global economy, and food is a counter-cyclical growing seasons big driver of that,” says Ferguson. in Southern Europe, Latin America “From an export standpoint, the U.S. is positioned in a fantastic way and Asia-Pacific have made products to help feed the world, thanks to available year-round for U.S. conwhat we do in the Midwest prosumers, he says, “there hasn’t been viding low-cost grain, poultry, pork a whole lot of supporting infrastrucand beef,” he adds. ture at those ports to facilitate the Many cold storage facility operacost-effective flow of goods. tors are now making moves to sup“And when you’re talking about port global trade at key ports across fresh, the clock is always ticking, the United States. MTC Logistics’ so it’s not only being cost new Mobile facility, for example, effective but also being able will enhance the port’s containto support rapid deployment erized operations to reach more and speed to market,” he markets throughout the world. adds. “It forces a different All of the product will transit in on view of infrastructure and containers and will be value-add services processed through APM for things like The Terminals before or after modified atmosphere economy arriving at MTC Logistics, where you can treat has certainly where they will be able become a true the product coming in to blast freeze poultry global economy, to extend shelf life in product coming from and food a safe way.” across the Southeast to In February, is a big Americold made a be exported across the driver of significant investglobe. Americold, whose that.” ment to back the Atlanta headquarters Ernie Ferguson, demand for fresh is situated in the heart vice president of sales and marketing, foods. In conjunction of poultry country, also MTC Logistics with the acquisition sees a need for port of PortFresh Holdinfrastructure to support ings, a temperature-conthe protein exports for the poultry industry coming out of this region to trolled operator servicing fresh produce trade primarforeign markets. ily through the Port of Sa“Companies have really been vannah, Americold plans to left to their own devices in piecing build a 15 million-cubic-foot together sub-optimal supply chains cold storage facility on port to service that international downadjacent land owned by stream demand because there just PortFresh. hasn’t been an investment in those The facility will feature port assets,” says Americold’s Fowler. www.foodlogistics.com

FLOG0319_40-43_WAREHOUSE.indd 43

37,000 pallet positions, advanced blast freezing capabilities, and space and infrastructure to support refrigerated-containerized trade. “With this investment, Americold is fulfilling our customers’ requests to expand into this growing market, which provides an efficient and cost-effective solution to meet their import and export needs,” says Fred Boehler, president and chief executive officer of Americold Realty Trust.

MTC Logistics’ headquarters at the Port of Baltimore. MTC Logistics

KEEP COLD STORAGE

AT THE RIGHT TEMPERATURE

ComplianceMate™ LoRaWAN Sensors Automatically records temperatures Sends data wirelessly to the cloud  Identifies potential equipment failure  Eliminates paper & reduces food waste  

CALL FOR YOUR FREE DEMO: 678.526.4628 ComplianceMate.com

MARCH 2019 | FOOD LOGISTICS

3/1/19 11:34 AM

BY MARY SIEGFRIED

milindri / iStock / Getty Images Plus

SECTOR REPORTS TRANSPORTATION

PRESSURE TO INNOVATE FOR LAST MILE I

Evolving consumer demands and new grocery delivery models are making it a “when” not “if” companies are investing in last-mile innovations.

Mary Siegfried is a freelance writer based in Chandler, Arizona. She has written about the supply chain industry for more than 20 years.

n the long and winding logistics supply chain, the last mile—delivering directly to a customer’s home—is gaining greater importance in today’s customer-driven e-commerce world. And nowhere is last-mile delivery coming into sharper focus than in the food and grocery industry. While still a small percentage of grocery sales, online shopping and last mile delivery is poised to grow, presenting both challenges and opportunities for food and beverage companies. Deutsche Bank predicts that online grocery sales will jump from 3 percent in 2018 to 12 percent by 2025. A report earlier this year from the Food Marketing Institute and Nielsen says consumers should be spending as much as $100 billion on online groceries by 2022. And based on customer expectations for e-commerce, experts believe the last-mile delivery of those online orders will become a differentiator in the food industry. “The Amazon Prime ecosystem is driving increased expectations across the board for all products,” says Dean Maciuba, director, con-

FOOD LOGISTICS | MARCH 2019

FLOG0319_44-45_TRANSP.indd 60

sulting services for Logistics Trends & Insights. “They are forcing everyone’s hand to get the product to the consumer more quickly. That’s why the food industry has to absolutely figure this out.”

Challenges and Decisions Kristi Montgomery, vice president, innovation, research & development for Kenco Logistics, says there are several technology trends that can help the industry as it wades deeper into online sales and last-mile delivery. Supply chain professionals also have to be thinking about their roles in this trend because both online shopping and home delivery are critically important with the changes in consumer demand in the marketplace, she adds. Some of the challenges and decisions that supply chain leaders should be weighing as the last-mile delivery trend broadens include: • Deciding whether to use contract providers or in-house employees • Using regional or local distribution centers

• Finding the best technology to improve service • Dealing with start-up as well as ongoing costs. Maciuba says grocery companies must decide how the last-mile delivery service as well as “shopping” to fulfill the online order, will be provided. Options include using a third-party company to shop and deliver to the customer, using in-store employees to shop and a third-party to deliver the last-mile service, or using store employees for both functions. “All of these models are being employed right now,” he explains. “I don’t think anyone has been able to identify the absolute best way to do this. I think it has to do with the goals of the company and how much it wants to control its service offerings.” Many companies enter online shopping and last-mile delivery using a third party but once they begin measuring results, margin impacts and service satisfaction, they grow their own staff to directly manage it. “From the standpoint of service, there’s no question you are going to have superior service with www.foodlogistics.com

3/1/19 11:36 AM

a well-managed in-house shopping and delivery service,” Maciuba says.

Role of Technology

Pieces of the Puzzle The challenge these innovations present is that they are pieces of a puzzle that have yet to come together for cohesive visibility. “One (innovative startup) might have a great mobile app, another might have the hardware to enable data collection or the link to chain of visibility. But there’s not a single provider to offer an entire chain of visibility,” Montgomery explains. That is why blockchain technology is exciting, she adds, because

ablokhin / iStock Editorial / Getty Images Plus

Another trend is using a centralized distribution facility model, although that only works in large, dense markets such as South Korea where 20 percent of consumers buy groceries online and in the United Kingdom and Japan where 7.5 percent grocery shop online. The U.K-based Ocado, for example, is a supermarket that doesn’t have any stores and delivers from its warehouses. Maciuba says the start-up costs to create a fully automated grocery-based fulfillment center are significant. But once established, a regional warehouse model will be more cost-effective as robots pick products rather than individuals pulling items off grocery store shelves. “But again, this solution will be restricted to large, dense markets in the U.S.,” he says. Technology plays, and will continue to play, a strategic role in online grocery shopping and lastmile delivery, Montgomery says. In her position with Kenco, she regularly meets with startups and sees many entrepreneurs designing technology for this space. Many are developing phone applications “because everyone wants something on their phone,” she says. Artificial intelligence-enabled technology on the information side of the shopping and last-mile delivery equation is also gaining traction. “This trend is driven by back-end enabled data collection. Innovations seek to gather data at every point in the supply chain,” she explains. And the trend is not only to provide consumers with data, but also to provide it to third parties. “A last-mile delivery partner would be able to determine if its driver is

moving along the delivery route as planned. Such innovations are driven by mobile and Internet of Things devices,” says Montgomery.

www.foodlogistics.com

FLOG0319_44-45_TRANSP.indd 61

it can connect all the puzzle pieces for greater visibility in the food industry supply chain—down to last-mile delivery. Blockchain, for example, also could provide better accuracy and timeliness during a food recall and be used to weed out counterfeit products in the food supply chain. “I’m not saying the technology is completely there yet, but it’s the technology that is trending. And it’s not just about convenience; it also opens the door to improvements in food safety and in tracking freshness.” Montgomery and Maciuba agree that at the end of the day the costs associated with online food ordering and last-mile delivery are one of the biggest hurdles companies will have to clear. “It’s difficult because there will be costs associated with putting

blockchain in to underlay your technology infrastructure,” Montgomery notes. “But a company will have to weigh that cost against the risk of not doing such improvements. In other words, looking at the costs they are avoiding.”

Figuring It Out Maciuba says Wall Street will be closely watching how the expansion of big box stores into grocery e-commerce and last-mile delivery affects margins and the bottom line. He expects most companies will “take a hit,” but on the other hand, if competitors are offering the service and they don’t, companies could lose market share in the long run. “Any company that enters into this is going to see a negative impact on profit margins at first,” he says. “But that is normal in business when a trend changes your business model and your competitors are embracing the trend.” Smart companies could “layer on” additional perks to add profit to online ordering and delivery such as offering prepared meals or ready-to-eat lunches as part of the service. And as the value proposition increases for customers, a fee structure can help to offset costs, he adds. Montgomery says the costs associated with new technology to enable food service e-commerce and last-mile delivery can be offset by using the data collected to improve the company’s overall digital strategy. She also suggests companies should look to their partners to help with pieces of the overall plan because every company in the supply chain has to do its part to meet customer demand. Maciuba adds: “These shifts in customer demands are real, and they are not going away. No one knows how quickly online grocery ordering and delivery will grow, but you can be sure the growth will be there.”

No one knows how quickly online grocery ordering and delivery will grow, but you can be sure the

growth will be there.”

Dean Maciuba, managing partner, North America, Last Mile Experts

MARCH 2019 | FOOD LOGISTICS

3/1/19 11:36 AM

SECTOR REPORTS

SOFTWARE & TECHNOLOGY

BY MONTE ZWEBEN

OPERATIONAL AI HELPS FOODSERVICE COMPANIES OPTIMIZE THEIR SUPPLY CHAINS Use machine learning to sense, plan and act on the microevents that determine supply and demand across the entire food supply chain.

1 46

rtificial intelligence is ushering in a new way of looking at supply chain optimization. It is allowing supply chain managers to compress the sense-plan-act cycle to almost real-time intervals. Companies that plan supply and demand on a monthly or weekly basis can now read signals from their supply chain in seconds, plan based on the realities of the moment and take immediate action based on the new plan. Planning teams have always reacted to actual data, so one might ask what is different now? The main difference is that companies can now get so granular that they can sense, plan and act to micro-events. A micro-event is a factor that can impact a plan, is very detailed, and is potentially intermittent, meaning it does not occur with regular frequency. Probably the most intuitive example of a micro-event is weather. Weather has a profound impact on supply chain operations, but it is intermittent and totally unpredictable. Thus, how can we use weather to help optimize supply chains? Let’s take demand planning, for example. Most demand planning is performed using historical statistical algorithms that average or smooth demand data. Some use moving averages that take a window of previous periods and average them to find the next period’s prediction for demand. For instance, if a product had a demand of 10, 12 and 14 units in the last three months, we could

FOOD LOGISTICS | MARCH 2019

FLOG0319_46-47_SOFTWARE.indd 46

average these to predict demand of 36/3 or 13 units for the next month. Other approaches use exponential smoothing to try to capture trends in demand signals. These ubiquitous approaches use actual data from previous periods to predict future demand. But for the food supply chain, the growing trend for fresh, local food to make its way to grocery stores, restaurants, fast casuals and even quick service restaurant (QSR) chains has made monthly, and even weekly, planning almost obsolete. Now, companies across the food industry are tapping into machine learning and artificial intelligence to make better decisions faster when it comes to supply and demand.

Using Machine Learning to Manage Micro-Events New machine learning approaches to forecasting augment this historical approach by adding a real-time predictive component. Machine learning models are often used to classify data into categories. For example, suppose we built a model that learned whether demand is affected by weather. If we had an accurate model, we could apply it in real time, and use the micro-event to adjust our forecast. The model would take weather variables and statistically correlate them with demand signals. We could then increment or decrement the forecast based on the model’s prediction. Then, the model would test

0 0

real-time conditions and predict the degree to which the weather would impact the forecast. There are many mathematical approaches to machine learning, but what is common is that the model could dynamically predict an adjustment to demand based on the weather. This model is trained from past experience. What are other micro-events that can be very powerful influencers of supply and demand? They tend to be localized—and perhaps short-lived—but often wreak havoc in a supply chain. For example: • Local sporting events and concerts. In one geography, a local QSR noticed large spikes after Friday night high school football games • Power outages. One short power outage can cause conditions rendering certain products highly in demand, or cause spoilage that strips supply • Social media. One celebrity mention can have a significant impact on demand • Commerce activity. The popularity of certain products can impact other products, even across vendor and category • Fires and natural disasters. An event can take out full sources of supply, while also dramatically changing demand • Recalls. Product quality announcements can affect both demand and supply • Strikes. In some geographies, strikes can have a profound

www.foodlogistics.com

3/1/19 11:39 AM

impact on delivery times, making supply difficult • Traffic. When an accident happens on a bridge and there is a closure, there can be a ripple effect on delivery times down the supply chain

Building Smarter, AI-Powered Applications Is a Journey There are many micro-events that can affect supply and demand, plus they change over time. So, while machine learning is a powerful tool to augment traditional supply and demand planning, it is difficult to standardize. Machine learning is a continuous journey of experimentation and an organizational team sport. It is an ongoing iterative process that requires cooperation between IT, data science and the business. There is almost never a standard model for any problem over time. Effective data scientists are continuously producing new models, trying new experiments that make models more predictive. They adjust many dimensions of a model, including the algorithms and the parameters to those algorithms, but what is most important is that they vary the features of the data that train the learning model. This is often referred to as “feature engineering,” and it is the most time-consuming and perhaps most powerful factor contributing to the precision and accuracy of models. Every organization that attempts to use machine learning to predict micro-events must establish a culture of experimentation with a “feature factory.” They must have the systems and processes in place to allow the data scientists to capture, cleanse and transform the raw data; be able to describe

micro-events; and perform experimental training models seeking a lift in both precision and accuracy. Markets change over time, resulting in customers that change desires and behavior. Suppliers change behaviors as well. Therefore, micro-events that predicted spikes in supply and demand last year, month or week may no longer have the same impact. Therefore, the data scientist must always be on the lookout for change. They must try new features and deploy new models in production to predict supply or demand.

A Vision for Operational AI Applications This feature factory and culture of experimentation imposes new system requirements on IT. No longer can you simply purchase an integrated business planning software package. Now, you need more flexibility. There are three system requirements that need to be seamlessly integrated: • OPERATIONAL INTELLIGENCE COMPANIES. These companies need a data platform that can—in real time—consume signals from the supply chain to predict micro-events. No longer does it suffice to store transactional data such as inventory changes from orders. You must store and retrieve data from exogenous signals such as weather and social media in real time. This requires new “scale-out” architectures that store data on many machines to scale to petabytes. • BUSINESS INTELLIGENCE. Companies now need to perform analytics at petabyte scale to account for the signals and derive new features for

1 1 0

models. These new analytical processes also require scaleout architectures to perform distributed computation. By putting many CPUs on many machines to work simultaneously, data scientists can prepare data sets for machine learning interactively. • ARTIFICIAL INTELLIGENCE. Now companies need machine learning platforms that enable data scientists to use multiple algorithms, keep track of experiments, and deploy learned models in operational real-time systems. By bringing these three dimensions together, you enable operational AI applications at scale. There are a variety of ways of assembling these components, both with on-premise computing as well as in the cloud. Until recently, these components would have to be duct-taped together by IT, requiring large teams to continuously engineer the interfaces and operate the engines forming the operational AI system. Now there are seamlessly integrated operational AI systems that bring these three dimensions together to power smart applications. The age of operational AI is here with the seamless integration of scale-out operational databases, data warehouses and machine learning platforms. Companies can now use these platforms to store the data necessary to model micro-events and the computation required to build machine learning predictors of micro-events. Plus, these platforms can inject these predictors into real-time senseplan-act applications that sense micro-events, plan changes to supply and demand, and issue orders to continuously adapt to their supply chain.

Monte Zweben is the CEO and co-founder of Splice Machine. Monte is the coauthor of Intelligent Scheduling, and has published articles in the Harvard Business Review and various computer science journals and conference proceedings.

robertiez / iStock / Getty Images Plus

www.foodlogistics.com

FLOG0319_46-47_SOFTWARE.indd 47

MARCH 2019 | FOOD LOGISTICS

3/1/19 11:39 AM

BY LARA L. SOWINSKI

PORT HOUSTON SEES OPPORTUNITY IN PERISHABLE FOOD CARGOES T Infrastructure investments are key, including cold storage.

he Houston, Texas metropolitan area is in growth mode, both in terms of population growth and economic expansion. Despite a few “tough years” attributed to weak oil prices, last year was a marked improvement “and Houston’s growth is back on a strong path,” reports the University of Houston’s Institute for Regional Forecasting. Trade is a major driver for Houston’s economy, with the value of both imports and exports posting double-digit increases from November 2017 to November 2018. Mexico is the region’s top trading partner. From 2008 to 2017, trade between Houston and Mexico averaged $23.3 billion annually and was valued at $20.1 billion in 2017. Other top trading

FOOD LOGISTICS | MARCH 2019

FLOG0319_48-51_OCEANsr.indd 48

partners include China, Brazil, the Netherlands and South Korea. Petroleum and petroleum products comprise the top imports and exports, but perishable food—

Port Houston

SECTOR REPORTS OCEAN PORTS & CARRIERS

chilled and frozen—is a sector that the port is eager to grow. Ricardo Arias, trade development manager at Port Houston, says that investments in cold storage capaci-

Port Houston Bayport Terminal Port Houston

www.foodlogistics.com

3/1/19 11:44 AM

HOUSTON BY THE NUMBERS ❱P ort Houston’s imports of containerized perishable foods grew more than 40 percent from 2013 through 2017.

IN 2017, BANANAS WERE THE LEADING PERISHABLE FOOD CARGO WITH

458,721 TEU

HANDLED BY THE PORT

❱T he port is the No. 1-ranked U.S. Gulf Coast port measured in TEU throughput and ranks as the fifth-largest U.S. port overall in containerized trade. CURRENTLY, PORT HOUSTON IS THE

NO. 1 U.S. PORT IN FOREIGN WATERBORNE TONNAGE

❱ Mexico is the top import and export trade partner. ❱ In 2017, overall trade for the Houston metro area reached $192.2 billion, with exports contributing $109.2 billion and imports $83.0 billion. Blankstock/iStock/Getty Images Plus

ty for frozen protein (beef, poultry and seafood) have been steady, but facilities that offer chilled storage, especially for imports of fresh produce, is slightly lagging. Fresh produce also requires USDA inspection capabilities and fumigation services, and the port is making investments in both. Handling chilled food versus frozen is more complicated, acknowledges Arias. For instance, on the transportation side, if an outbound shipment of frozen meat misses a sailing, it can easily be rescheduled to the following week without impacting the integrity of the cargo. However, if an inbound shipment of fresh produce is delayed, whether it’s for USDA inspection or fumigation, for example, the freshness can be impacted. There’s a bit of conundrum though with regards to adding capacity for chilled produce. Cold

Commitment to Service The Port of Long Beach is the greenest, fastest, most efficient gateway for goods moving to and from Asia and marketplaces across America. We’re keeping our competitive edge while working sustainably, offering unrivaled customer service while we build the Green Port of the Future.

www.POLB.com

www.foodlogistics.com

FLOG0319_48-51_OCEANsr.indd 49

MARCH 2019 | FOOD LOGISTICS

3/1/19 11:44 AM

Global Supply Chain Solutions for the Food and Beverage Industry

Each year, Food Logistics recognizes individual and corporate leaders in the food and beverage industry. Plan now to enter your company â&#x20AC;&#x201D; or a cutting-edge client or vendor â&#x20AC;&#x201D; in one of these industry-leading recognition programs:

2018

TOP GREEN PROVIDERS In recognition of companies demonstrating leadership in sustainability in the food and beverage supply chain Nomination deadline: March 30, 2018 Winners announced in June 2018 issue

TOP 3PL & COLD STORAGE PROVIDERS

FL100+ TOP SOFTWARE & TECHNOLOGY PROVIDERS

Honoring the leading 3PL and Cold Storage Providers that support the food and beverage supply chain

Recognizing top software and technology providers supporting the global food and beverage supply chain

Nomination deadline: May 25, 2018

Nomination deadline: Sept. 21, 2018

Winners announced in August 2018 issue

Winners announced in Nov/Dec 2018 issue

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

FLOG0319_48-51_OCEANsr.indd 50

3/1/19 11:44 AM

SR: OCEAN PORTS continued

storage operators understandably seek assurance that there will be sufficient volume to justify investments, yet shippers need to have infrastructure in place before committing to shipping perishable goods through the port. “It’s not an impossible task,” says Arias, adding that the port is doing its part to help with infrastructure development. Recently, Port Houston installed more reefer plugs to support growth in refrigerated cargo. Meanwhile, the port continues to make strategic investments to increase its ability to handle more containers and bigger vessels. Last August, the port installed three new 270-foot super post-Panamax cranes at its Bayport Container Terminals and took delivery of five new rubber-tired-gantry (RTG) cranes. The three new cranes bring the total ship-to-shore cranes operating at Bayport and Barbours Cut Container Terminals to 26, with 13 of those being super post-Panamax cranes. Five more RTGs were delivered to the port in September. All told, Port Houston’s investments in terminals, equipment and infrastructure totals about $1 billion. “It’s important for the trade community to know that Port Houston is in growth mode,” emphasizes Arias. Nonetheless, the ongoing trade tensions between the U.S. and China are being felt in Houston, according to a report from the Greater Houston Partnership. “China ranks as Houston’s second-largest trading partner (behind Mexico), with more than $18.8 billion in goods moving between Houston and the Asian nation in 2017,” adding up to 9.8 percent of all international trade for the region, according to the agency. Most of the exports from Houston to China were related to the energy industry, including oil, fuels, chemicals, plastics and industrial machinery. The top goods www.foodlogistics.com

FLOG0319_48-51_OCEANsr.indd 51

imported through Houston from China include industrial machinery, electrical machinery, computers, iron and steel, and consumer goods such as toys and furniture. “Houston’s relationship with China has grown more important over time,” adds the Greater Houston Partnership. “In 2001, China ranked 14th among Houston’s trading partners. Since 2015, it has ranked either first or second, often trading spots with Mexico.”

Coffee Perks Up Imports

ADVERTISER INDEX ADVERTISER......................................... PAGE

Cimcorp Automation Ltd...................................... 9 ComplianceMate.................................................... 43 Controlant................................................................. 31 DSC Logistics........................................................... 17 Elemica........................................................................ 23 FST Logistics, Inc.................................................... 37 Great Dane Trailers Inc....................................... 54 H&M Bay Inc............................................................ 35 iGPS Logistics LLC................................................. 15 Kenworth Truck Corp............................................. 5 KNAPP Logistics & Automation................... 2-3 North Carolina Ports Authority......................... 7

There are only five ports in the Old Dominion Freight Line Inc........................ 13 U.S. that are designated as a coffee Port of Long Beach................................................ 49 exchange port by the New York Port Tampa Bay....................................................... 41 Board of Trade, and Port Houston is Q Products and Services.................................... 39 one of them. Superior Tire & Rubber Corp........................... 25 When the designation was Systems, LLC............................................................ 21 received in 2003, it provided the Uline............................................................................. 51 port with a higher profile among Utility Trailers.......................................................... 29 coffee traders. Specifically, it meant Vanderlande Industries Inc............................... 11 that Port Houston was an approved Viking Cold Solutions, Inc.................................. 27 delivery point for the Coffee “C” futures contract trades on the New York board of Coffee, Sugar & Cocoa Exchange. According to the Greater Houston Coffee Association, there are SHIPPING SUPPLY SPECIALISTS over 50 coffee-related companies in the Houston OVER 1,600 BOX SIZES region and more than 160 in Texas. In addition, the region has over one-third of the market and is the only coffee exchange port west of the Mississippi. Last April, Sealand – a Maersk company, launched a new service, the Gulf Ocean Express (GOEX), that connects Port Houston with Central America, Panama and Colombia. While the ORDER BY 6 PM FOR SAME DAY SHIPPING service supports exports of frozen meat and other commodities from Port Houston, coffee and COMPLETE CATALOG other agricultural goods 1-800-295-5510 uline.com are among the imports transported via Sealand’s GOEX service.

ALWAYS IN STOCK

MARCH 2019 | FOOD LOGISTICS

3/1/19 11:44 AM

FOOD (AND MORE) FOR THOUGHT

BY CHRIS HARVEY

EIGHT YEARS AFTER FSMA,

Recall Preparedness is as Necessary as Ever BY CHRIS HARVEY

HARVEY

Magone/ iStock/ Getty Images Plus

Chris Harvey is the director of recall solutions for Stericycle Expert Solutions. Harvey assists in the scoping, plan development and recall execution for a diverse set of industries, including pharmaceutical, medical device, food & beverage and consumer products.

lmost 10 years ago, a dangerous Salmonella outbreak swept the nation, killing nine people and sickening thousands. The outbreak resulted in numerous lawsuits and criminal charges, ultimately leading to the Food Safety Modernization Act (FSMA). At the heart of the outbreak was The Peanut Corporation of America (PCA), which ultimately had to shut its doors after corporate malfeasance led to one of the most massive and lethal food-borne contamination cases in U.S. history. The historic outbreak forced more than 360 companies to recall more than 3,900 peanut products across 46 states. Signed into law by President Obama in 2011, FSMA was designed to ensure the safety of the U.S. food supply by shifting the focus to preventing outbreaks rather than reacting to them. But even with FSMA in full effect, food recalls are still prevalent. The Stericycle Expert Solutions 2018 Q4 Recall Index found that food recalls increased 21 percent to make the highest quarter since Q3 2017. Recalled FDA food units increased 457 percent to 47 million—higher than three of the previous four quarters. Additionally, USDA recalls increased 62 percent to 42, the second highest since Q2 2015.

FOOD LOGISTICS | MARCH 2019

FLOG0319_52-54_FoodThought.indd 52

Recalls are often unexpected and happen at lightning speed—putting your customers, and your brand, at risk. Whether it’s a positive contamination test in a food product, mislabeled packaging or an unlisted allergy, food recalls are serious business. Events like the U.S. government shutdown in January could also increase the odds that contaminated foods might end up in the hands of consumers if less inspectors are available. Any company’s primary concern during a recall is to protect the public—no company wants to see a customer fall ill. However, food recalls are also a major concern from a business perspective. Illness, mislabeled packaging and unknown allergies are bound to make headlines. Just look at all of the recalls that made the news in the last year. When it comes to food recalls, many brands and products are well known, especially pantry staples such as canned soups or cereals. Fresh produce and meats, on the other hand, may not come with a label that is instantly recognizable to the average person. The right recall strategy can minimize these risks. Here are a few tips to become “recall ready.” E nsure you have a plan in place to notify retailers immediately. This will help keep additional products from entering consumers’ homes in the first place. In addition, many retailers have membership, rewards and loyalty programs that allow them to contact only affected consumers directly. This can greatly increase the number of consumers who check their refrigerators and freezers and, therefore, reduce

the risk of additional illnesses. However, it also comes with other risks. When tens of thousands are notified at one time, it can overwhelm internal contact centers, so having the right resources in place is crucial. R ecall it right the first time around. Many food companies have to update a recall multiple times because they didn’t realize until after the first announcement how many lot codes were affected. This is common with products such as ground beef that may include meat from many different cattle, or any product where traceability is challenging. Conducting mock recalls can help identify and correct issues that could make it difficult to understand the scope. P erform effectiveness checks early and often. Waiting too long can make it difficult to right the ship if necessary. Regulators may have certain minimum requirements that must be met, but there are also steps that companies can take to go above and beyond those mandates increasing the likelihood consumers will respond to the recall. An experienced recall service provider can walk companies through both the requirements and additional options—documenting everything along the way. Regardless of what solutions food producers adopt, the threat of contamination or other food safety issues will always be present no matter how diligent the company may be. A robust plan alone can’t guarantee a smooth recall execution, but it is the first critical step to becoming “recall ready.” www.foodlogistics.com

3/1/19 11:48 AM

2019 Educational Webinar Series STAY ON TOP OF THE LATEST TRENDS AND BEST PRACTICES IN THE GLOBAL FOOD AND BEVERAGE SUPPLY CHAIN. Hosted by Food Logistics editorial staff and led by industry thought leaders, the 2019 Educational Webinar Series offers the information you need to streamline your operations and increase profits. REGISTER FOR ONE OR ALL OF THE SESSIONS AT NO CHARGE THANKS TO OUR SPONSORS.

DETAILS & REGISTRATION: FOODLOGISTICS.COM/WEBINARS TIME: 1:00 P.M. ET/ 12:00 P.M. CT / 11:00 A.M. MT / 10:00 A.M. PT

November 6 April 24

Blockchain & IoT

May 22

The impact of transformational technologies such as blockchain and IoT on the global food supply chain is beginning to reveal itself in a variety of areas, including tracking and tracing of products and assets as well as verifying the integrity of data and streamlining the flow of information. What are the immediate and affordable ways these technologies can be applied today? Join an expert panel as they discuss the merits of blockchain and IoT as they apply to the global food supply chain.

A truly integrated cold chain facilitates the seamless movement of product and data among all stakeholders in the food supply chain—from food growers and manufacturers, to transportation partners, ports, cold storage providers and others who collectively ensure food safety and freshness. What investments and innovations are making the most impact across the global cold chain? A panel of industry executives examines this topic from several angles.

_________________

Cold Chain I

_________________

June 12

August 21

Warehouse Automation

Software & Technology I

September 18

The e-commerce explosion is a main driver for the food and beverage industries’ embrace of warehouse automation and the benefits that come with it, such as gains in productivity and accuracy, safety, and improved shelf life and inventory control. What types of warehouse automation are making the most impact? How can organizations determine the right investments for their needs? These are some of the topics that will be explored by a panel of industry experts.

From farm to fork, software and technology touches virtually every aspect of the global food supply chain, helping to assure compliance with multiple regulations, manage the proliferation of SKUs, and enhance overall supply chain visibility. Join industry executives as they discuss how software and technology is impacting the global food supply chain and what investments your organization should consider and why.

Improving energy efficiency. Reducing Food Waste. Assuring compliance with the FSMA. These are some of the requirements that retailers, restaurants, manufacturers and growers of perishable food are demanding of their logistics partners when it comes to maintaining the cold chain. In response, innovations related to equipment, temperature monitoring devices, refrigeration systems and other new products and services are helping meet these demands.

_________________