Food Logistics April 2020 by Supply+Demand Chain/Food Logistics

FARM-TO-TABLE TRANSPORTATION

MICRO-FULFILLMENT IN HIGH-DEMAND ENVIRONMENTS

HOW SMART PORTS DIGITIZE

Food Logistics

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MANAGING FOOD SAFETY ALONG THE SUPPLY CHAIN How cold food and beverage industry achieves strong food safety culture. Issue No. 215 April 2020

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Delays not only hurt your reputation, they also damage your bottom line. It’s why we’re dedicated to getting perishable products to market quickly and efficiently. All so you can keep your promises and your profits. It’s how we deliver confidence. Learn more at gopenske.com.

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ON THE MENU

April 2020 ISSUE NO. 215 COLUMNS FOR STARTERS

Navigating the New Normal

Food supply chains remain strong despite the COVID-19 outbreak, according to editor-in-chief Marina Mayer. COOL INSIGHTS

COVER STORY

Managing Food Safety Along the Supply Chain From ensuring regulatory compliance to overcoming food fraud, here’s how the cold food and beverage industry achieves a strong food safety culture.

3PL REFRIGERATED LOGISTICS

Anything but Frosty: Cold Chain Logistics Industry Sees Growth

Here’s how technological capabilities, government regulations and everchanging consumer demands transform the growth in 3PLs.

SECTOR REPORTS WAREHOUSING

The Dash to the Doorstep—How to Optimize E-Commerce Order Fulfillment for Peak Demand

Descartes encourages e-commerce companies to ensure that their fulfillment processes are capable of meeting consumer expectations while improving sales margins and maintaining a competitive edge against other players in the space.

TRANSPORTATION

Farm-to-Table Protection Through Advanced Technology

Ryder discusses how technology that gives visibility into the movement of products and connects everyone on the supply chain is a primary need for many of today’s companies. SOFTWARE & TECHNOLOGY

Emerging Technologies Will Fill, Not Steal

Technology and automation will not steal jobs away from humans, but will instead fill positions, so employees can focus on more demanding tasks. OCEAN PORTS & CARRIERS

How Smart Ports Digitize Today’s Ports for Tomorrow

Smart Ports represent a radical transformative change for the supply chain that is already positively impacting the industry. On the cover of our March 2020 issue, Food Logistics incorrectly published Carrier Transicold as Transicold Carrier. And, the additional Champions winners appear on page 24 of this issue. We apologize for the confusion.

Disasters Happen. Here’s How to Weatherproof Your Supply Chain

Association for Supply Chain Management says redundancy helps supply chains become more resilient to weather-related risks. FOOD (AND MORE) FOR THOUGHT

Data Standards Today Create Blockchain Opportunities for Tomorrow

GS1 US details how blockchain can be transformative.

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Supply Scan Food on the Move Ad Index WEB EXCLUSIVES MODEX 2020—The Year of Hand Sanitizers, Elbow Bumps and Puppies foodlogistics.com/21122062

Coronavirus Outbreak Reveals Weakest Links in the Supply Chain foodlogistics.com/21122575

How COVID-19 Tests Today’s Supply Chains foodlogistics.com/21122485

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Published and copyrighted 2020 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. 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.

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FOR STARTERS

DETAILS

FROM THE EDITOR’S DESK

NAVIGATING THE NEW NORMAL

AMID A GLOBAL

PANDEMIC I Marina Mayer Editor-in-Chief

BY MARINA MAYER

t’s March 12. I’m sitting in an airport, following MODEX 2020. The Coronavirus disease (COVID-19) was all anyone could talk about on—and off—the tradeshow floor. But, I’m just now starting to feel it in the air. The panic, the fear, the strange looks after someone slightly coughs. But, the anxiety about what’s to come and what to do next doesn’t really settle in until after I’m home, unpacked and at the grocery story. Now, we all know what happens from here. The hordes of people stocking up on toilet paper. The empty frozen food aisles. The lines that mimic Black Friday. Meanwhile, more and more companies begin to hunker down. Enter the “New Normal,” where grocery retailers expanded their direct-to-consumer channel, consumers revamped the way they shopped for groceries and traditional dine-in restaurants implemented carry-out and delivery options—all to reach consumers in different ways. Then came the question of, how can the food supply chains keep up? And, can the food supply chain keep up? “The grocery supply chain is not going to shut down,” according to Doug Baker, vice president of industry relations for the FMI – the Food Marketing Institute, Arlington, Va. “Manufacturers have also started allocating goods, so they can ensure equal

distribution across the country.” FMI and the International Foodservice Distributors Association (IFDA), McLean, Va., formed a partnership that provides excess capacity to food retailers and wholesalers that require additional resources to fulfill needs at grocery stores. Amazon, Target and Jewel-Osco hires hundreds—and even thousands—of new workers to keep up with demand. Uber Eats, DoorDash and others waived delivery fees and worked alongside companies to keep food moving into communities. But, the impact of COVID-19 is both global and unpredictable, according to an ABI Research study. “Investments in robotics or IoT sensors and the like assume that assembly lines receive a steady flow of raw materials. COVID-19 demonstrates that manufacturers need to be as focused on their supplier’s capabilities as they are on their factory floor,” says Michael Larner, principal analyst at ABI Research. It’s hard to tell how much of a long-term impact COVID-19 will have on food supply chains, but people will always need to eat. Trucks will always operate, groceries will continue to receive shipments and the supply chains as we know it will continue to run in full force. Kudos to all of the unsung heroes—the essential workers—who continue to navigate the New Normal and keep food supply chains moving.

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PRINT AND DIGITAL STAFF Group Publisher Jason DeSarle Sales Associate Brian hines Editor-in-Chief Marina Mayer mmayer@ACBusinessMedia.com Associate Editor Brielle Jaekel bjaekel@ACBusinessMedia.com Web Editor Mackenna Moralez mmoralez@ACBusinessMedia.com Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com Art Director Willard Kill Audience Development Director Wendy Chady Audience Development Manager Angela Franks ADVERTISING SALES (800) 538-5544 Group Publisher Jason DeSarle (440) 476-9526, jdesarle@ACBusinessMedia.com Sales Associate Brian Hines (647) 296-5014 bhines@ACBusinessMedia.com 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 Brian Hines (647) 296-5014 bhines@ACBusinessMedia.com AC BUSINESS MEDIA Chief Executive Officer Barry Lovette Chief Financial Officer JoAnn Breuchel Chief Digital Officer Kris Heineman Chief Revenue Officer Amy Schwandt VP Audience Development Ronda Hughes Director of Digital Operations & IT Nick Raether Director of Digital Strategy Joel Franke Group Content Director Jon Minnick Published and copyrighted 2020 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 | APRIL 2020

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SUPPLY SCAN

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

Where Food Comes From Inc. (WFCF) launched PoultryCARE, an innovative new sustainability standard for the poultry industry. PoultryCARE is said to be the poultry industry’s most comprehensive third-party verified sustainability program. It will be administered by WFCF’s IMI Global division, utilizing reviewers and auditors with extensive experience in poultry production. Certification to the PoultryCARE Standard is achieved following on-farm evaluations by IMI Global auditors who focus on three specific pillars:

STUDY UNVEILS HOW D2C UPSTARTS TRANSFORM CPG INDUSTRY In the last seven years, consumer packaged goods (CPG) giants have lost $17 billion to innovative newcomers, according to a report from Digital Shelf Institute. Meanwhile, more than $5.5 billion was invested into CPG brands from 2015-2019. During that time, the number of brands receiving investment tripled, and the amount of money invested quadrupled, with the majority of consumers turning to direct-to-consumer (D2C) brands. This data is compiled from hundreds of venture capital investments to highlight use cases demonstrating how these investments are used to upend entire CPG categories.

Mastronardi Produce

WHERE FOOD COMES FROM LAUNCHES POULTRYCARE SUSTAINABILITY STANDARD

ANIMAL HUSBANDRY.

ENVIRONMENTAL STEWARDSHIP Land and water resources; greenhouse gas emissions; animal productivity; energy reduction; waste management and long-term strategy.

PEOPLE AND COMMUNITY Safe working environment; fair compensation and treatment; growth and development opportunities; business and succession planning; and local community support.

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MASTRONARDI PRODUCE TO EXPAND PROCUREMENT OF DOUBLE DIAMOND FARMS GREENHOUSE SUPPLY Mastronardi Produce is increasing access to locally and winter-grown SUNSET produce thanks to the recent procurement of Double Diamond Farms greenhouse supply. The company assumed sales and marketing of Double Diamond Farms production of 140 acres of high-tech, lit greenhouses in Leamington, Ontario, Canada, with plans to expand to 172 acres by 2021. “The increase in northern production is especially vital for providing our Midwestern and Eastern consumers with ﬂavorful, locally-grown produce even in the winter months, within a day of being picked,” says Paul Mastronardi, president and CEO of Mastronardi Produce.

STUDY DETAILS THE HYPE BEHIND MEAL KIT MANIA Eight years since entering the U.S. market, the meal kit delivery service has grown quite big in size. In 2017, there were over 150 meal kit companies operating in the United States. Today, big brands have joined the fray raising the stakes even higher for all the smaller companies and startups operating in the space. So, how have Americans taken to the meal kit trend? Piplsay polled 31,635 Americans nationwide. Here’s a quick peek at the report: · 36% of Americans who have tried meal kits in the last year bought them either from stores or restaurants. · 18% of those who have tried meal kits in the last year have subscribed to a delivery service. · 64% of meal kit subscribers have canceled their subscription in the past year. · 47% of Millennials and 38% of Gen Zers canceled their subscription because of their high cost. · Hello Fresh is the most popular meal kit delivery service with most Americans (23%).

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Care and well-being policies and practices; biosecurity and emergency preparedness protocols; employee and grower animal care training; poultry handling and transport; animal health protocols; and environmental and housing conditions.

SUPPLY SCAN

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

AMERICOLD COMPLETES INITIAL INVESTMENT IN SUPERFRIO TO FORM STRATEGIC JOINT VENTURE IN BRAZIL

Pexels

Americold Realty Trust completed its initial investment in SuperFrio Armazéns Gerais SA, a temperature-controlled storage operator in Brazil, to form a strategic joint venture. Americold acquired approximately 15% of SuperFrio for $26 million. Under the terms of the agreement, Americold committed to fund up to an additional $28 million at its pro-rata share for the joint venture’s acquisition and development activity over the next two years.

STUDY: AGTECH, FOODTECH MATURES

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Mastronardi Produce

Finistere Ventures released its “2019 AgriFood Tech Investment Review,” which found that agtech deals continued to climb and reached an all-time high in 2019, while later-stage venture capital (VC) valuations across the agtech and foodtech ecosystem rose dramatically. VC investment in agtech startups totaled $2.7 billion across nearly 300 deals around the globe in 2019. In contrast, foodtech investment decreased significantly in 2019 – down to $7 billion from its high of nearly $9 billion in 2018. Developed in collaboration with PitchBook, key agtech findings include: • From a global perspective, Europe doubled capital deployed into agtech deals in comparison to 2018 – ending the year at $500 million. • Reaching a high of $920.9 million in 2019, crop inputs continued to be the leading segment in agtech investment. • Precision ag investment continued to fall, as best-of-breed innovators position themselves to claim leadership positions through consolidation and market adoption. • With longer lifecycle investments, plant sciences investments dropped 20% from 2018, but will likely climb again in years ahead.

Key foodtech findings include: • • •

Foodtech investment continues to outpace that of agtech, with $7 billion in capital deployed within the sector in 2019. From a global perspective, the United States continues to take the leadership role in agtech investments. Foodtech may be the first agrifood sector impacted by the U.S./China trade wars.

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APRIL 2020 | FOOD LOGISTICS

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SUPPLY SCAN

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

Ware launched the first warehouse inventory automation system built on Skydio 2, what is said to be the world’s smartest drone. Tracking and counting inventory cost-effectively is one of the $1.9 trillion warehousing industry’s greatest Ware challenges. Ware’s product was designed specifically to address this, helping customers increase the accuracy and frequency of their inventory tracking, while simultaneously reducing cost. “Today, our solution can deliver full-counts every month—increasing most customers’ frequency by six times,” explains Joseph Moster, co-founder and CTO of Ware. “Our system leverages fleets of drones to capture images of every bin location in a facility, giving operators a visual audit history of the status of their inventory and proactively alerting them to potential issues. And, we don’t just stop there—all of those same images contribute to building the largest-ever visual dataset of warehouse inventory, which serves as the backbone of our machine learning algorithms.”

DOLLAR GENERAL TO EXPAND PRODUCE OFFERINGS, IMPROVE DISTRIBUTION & TRANSPORTATION EFFICIENCIES IN 2020 Jeff Owen, chief operating ofﬁcer for Dollar General, announced plans to double the company’s fresh distribution assets in 2020. “Our cooler door expansion program continues to be our most impactful merchandising initiatives,” he says in an earning call. “Importantly, in addition to being a great sales and trafﬁc driver, the expansion of our cooler door footprint over the years has provided the scale necessary to enable DG Fresh. In turn, given our DG Fresh learnings and successes to date, we recently began incorporating higher capacity coolers into our stores, creating additional opportunities to drive higher on-shelf availability and deliver a wider product selection.” As for Dollar General’s relationship with FedEx, this service is currently available in more than 2,500 locations with plans to expand to over 8,500 stores by year end. During 2019, the company added more than 6,000 additional Electronic Article Surveillance (EAS) units to the entire chain. Dollar General is also accelerating its expansion of produce offerings, which provides the Top 20 items typically sold in traditional grocery stores and covers approximately 80% of the overall categories. “Our plans now consist of adding produce in approximately 400 stores this year, up from our previous goal of about 250 stores, bringing the total number of stores with produce to more than 1,000 by year-end,” says Owen.

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WARE LAUNCHES DRONE-BASED INVENTORY AUTOMATION

FOOD INDUSTRY GROUPS FORM PARTNERSHIP TO ENSURE SUFFICIENT FOOD SUPPLY AMID COVID-19 CRISIS The International Foodservice Distributors Association (IFDA) and FMIFood Industry Association announced an ad-hoc partnership motivated by widespread consumer needs fueled by the Coronavirus disease (COVID-19) pandemic. The partnership connects foodservice distributors that have excess capacity (products, transportation services, warehousing services) to assist food retailers and wholesalers that require additional resources to fulﬁll needs at grocery stores. While food industry resources are stretched to capacity, foodservice distribution resources are in need of economic sustainability. This partnership will not only ﬁll a crucial gap, but will also serve the American population from one end of the country to the other.

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OPTIMIZE YOUR FLEET ROUTING • Efficiently plan and execute daily routes

• More easily balance route efficiency with customer service

• Quickly create and compare multiple route plans

DISPATCHING • Track assets and communicate in near real-time

• Configure trip management and proof of delivery applications to fit your unique business • Quickly access data with easy-to-use interfaces

COMPLIANCE • Eliminate manual errors with electronic hours of service and vehicle inspection reporting

• Automatically log distance traveled by jurisdiction for streamlined International Fuel Tax reporting

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

NUVOCARGO ACQUIRES ONCARRIAGE TO MODERNIZE FREIGHT FORWARDING

Nuvocargo, the first digital freight forwarder and customs broker for U.S./Mexico trade, launched publicly after signing up and serving dozens of early customers, including some of the largest shippers moving cargo between the United States and Mexico. “Our customers see us as an extension of their team and their supply chain. They can focus on their core business and rely on Nuvocargo to take care of supply chain logistics,” says Deepak Chhugani, founder and CEO of Nuvocargo. Nuvocargo has been able to dramatically reduce the administrative overhead that shippers incur in managing all these parties related to their cross-border freight—namely carriers, customs brokers and freight brokers. “This is a very complex process that requires expertise and a network across import/export, compliance and transportation,” says Chhugani. “However, the industry is going through a digital transformation. We at Nuvocargo firmly believe that most workflows, tools and processes in freight forwarding can be dramatically improved, resulting in fewer errors, less human effort and better service for shippers. That’s what we do.”

MENDIX CORE SYSTEM HELPS MEAL KIT PROVIDER EXPEDITE FLEET DELIVERY

Mendix, a Siemens business, announced that a leading provider of home-based, “cook-yourown” meal kits is using its consumer-facing platform to create a streamlined, centralized flow of products originating from a customer’s wish list to the farmhouse, through traffic, and all the way to doorstep delivery. The new, end-to-end platform captures customer preferences and data on the desktop or handheld devices, and incorporates full visibility into last-mile movements by a connected fleet with track-and-trace notification for timely deliveries. By using Mendix’s low-code platform, the company reduced data entry tasks by 40%. It also enabled the company to develop a mission-critical core system in a fraction of the time allotted for a traditional ERP implementation. Such rapid implementation allowed the company to achieve sustained “hyper” growth, scaling up from a quarter of a million to 1.3 million subscribers without interruption. “It has become a common occurrence for us to see a transformation like this across our entire customer base,” says Derek Roos, chief executive officer of Mendix. “Low-code technology has become the cornerstone of innovation because it enables IT professionals to collaborate. Working together, they address the underlying business challenge and find solutions to that apply to staffing and competitive differentiation. A holistic, low-code platform that enables collaboration, development, testing and deployment quickly reveals how enterprises can drive tangible value from technology.”

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DOT FOODS IMPROVES QUALITY CONTROL & MONITORING OF CRITICAL SYSTEMS WITH SENTRICS PLATFORM

In December 2019, SENTRICS partnered with Dot Foods to implement a temperature monitoring and alert system to elevate their high standard of facility operations and food safety in its Toronto, Ontario, Canada, distribution center. As part of the initiative, SENTRICS installed Monnit wireless temperature sensors in zones throughout the distribution center that require rigid monitoring. The SENTRICS cloud-based platform collects, analyzes and interprets the data collected from the sensors to expand the visibility into the performance of the critical controls and temperature zones. This was woven throughout the facility to maintain Dot Foods’ guidelines for safe storage and handling. With the SENTRICS platform, on-site and remote employees now have a complete real-time picture of their facility. Using the platform’s customizable dashboards and alerts, employees are able to monitor constraints within refrigerated, frozen and dry good zones covered by the sensors and compare readings from other systems to improve overall data accuracy. Early warning signals set within the platform alert relevant staff and provide the timely information needed to proactively avoid operational issues and keep food within their required target temperature range. This proves how easy-to-install wireless sensors can be combined with cloud-based software to improve operational efﬁciencies of industrial controls and systems.

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FOOD ON THE MOVE

GROCERY DELIVERY APPS HIT RECORD DOWNLOADS CONSECUTIVE DAYS

Instacart, Walmart Grocery and Shipt have all been setting records for downloads of their mobile apps each day for three consecutive days due to the spread of the Coronavirus disease (COVID-19), according to research released by Apptopia, Comparing average daily downloads in February to March 15, Instacart, Walmart Grocery and Shipt experienced surges of 218%, 160% and 124%, respectively. Even though Walmart is slowly closing its standalone grocery delivery app and rolling it into its ﬂagship app, new installs have been increasing. Meanwhile, Instacart and Shipt (owned by Target) have also seen a rise in new installs of their mobile apps, with an increase of 98% over the average number of daily downloads in February.

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PROJECT44 UNVEILS OCEAN-TO-RAIL VISIBILITY TO INCREASE REAL-TIME INTERMODAL TRACKING

project44 released ocean-to-rail intermodal visibility, providing customers with the ability to receive real-time, geo-location-based tracking on intermodal shipments. Customers can now maintain visibility from origin to destination, between multiple handoffs and across multiple modes of transport on ocean-to-rail shipments. “Collecting data from trucks is connected by ELDs, telematics and other IoT devices,” says Raji Bedi, senior vice president, product management at project44. “Unfortunately, these devices are not present on a majority of containers. project44’s solution is able to produce an IoT-like experience without a physical device within the container and deliver on our promise of end-to-end visibility tracking.” project44’s intermodal visibility surfaces real-time data from the entire ocean shipping ecosystem—terminals, rail lines, ocean lines and drayage providers—and provides customers one stream of information. This product enables shippers to maintain consistent visibility as containers are moved through a port and on to rail. When multiple containers under the same bill of lading are split up and shifted to rail on different schedules, it often creates challenges for shippers, resulting in extra operational efforts, phone calls and emails in order to understand what is moving and when. This product cuts through all that wasted effort, enabling customers to have up-to-the-minute views of these handoffs taking place in a single source of the truth along with the rest of their supply chain data.

LOGISTICS TRENDS IN OUR INDUSTRY

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FRESH PRODUCE ASSOCIATION OF THE AMERICAS BREAKS GROUND ON ROUTE IMPROVEMENT FOR PRODUCE TRANSPORTATION

The Fresh Produce Association of the Americas (FPAA) celebrated the groundbreaking of a massive overhaul to State Route 189 in Nogales, Ariz. SR 189, also known as Mariposa Road, is the main thoroughfare for trucks crossing the Mariposa Port of Entry in Nogales and heading northbound on I-19 to area warehouses. The funding package leverages state, federal, city and county funding that make up the entire $134 million price tag. “The road improvement will make sure our roads operate at the speed of business, creating an efﬁcient ﬂow of trade and travelers from the Mariposa Port to I-19,” says Lance Jungmeyer, FPAA president. “This project reduces transit time from the port of entry to local warehouses, giving companies a valuable incentive to locate their operations in Nogales.”

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

GEORGIA PORT AUTHORITY ADDS NEW CONTAINER STORAGE SPACE

The Port of Savannah is bringing online 400,000 twenty-foot equivalent container units (TEUs) of annual container capacity at just the time when many port customers are seeking new storage options. “With slowing demand related to the coronavirus, port users need space to stage their cargo until that demand returns,” says Georgia Ports Authority (GPA) executive director Griff Lynch. “With these new container stack areas, Savannah is delivering the flexibility our customers need.” By mid-April, more than 6,000 TEUs of capacity will go into service, for a total of 11,130 TEUs of new container stacking space. These additions will increase Savannah’s annual capacity by 400,000 TEUs, for a new total capacity of 6 million TEUs per year. “Our terminals continue to function with operational ease and efficiency,” says GPA board chairman Will McKnight. “From time to time, spikes in demand occur because of new customer needs or other factors impacting the global supply chain. Through the authority’s steady investment in capacity, GPA is able to handle unexpected surges in container yard demand, whatever the cause.”

BALDOR SPECIALTY FOODS OFFERS HOME DELIVERY AMID COVID-19 CRISIS

Baldor Specialty Foods announced that for the first time in history, it will make its vast inventory of food available directly to consumers within a 50-mile radius of its Bronx, N.Y., headquarters. The goal is to help alleviate grocery store food shortages and provide a convenient delivery service for consumers staying put at home. It’s an unprecedented move for the 28-year-old wholesaler, which has served restaurants and foodservice establishments exclusively up to this point. The company plans to leverage the combined power of its robust e-commerce site, large fleet of trucks, army of drivers, food processing facility and large network of farms and specialty food vendors to serve consumers. “At its heart, Baldor has always been about family and community,” says Baldor’s chief executive officer TJ Murphy. “With a state-of-the-art food distribution chain already in place, it only makes sense to put it to good use, delivering our high-quality produce and specialty items to the consumers staying at home, doing their part to thwart the pandemic by practicing social distancing and isolation.”

STUDY: 85% OF AMERICANS PLAN TO ALTER BUYING HABITS DUE TO COVID-19

Research from GfK shows that the novel Coronavirus disease (COVID-19) will have significant short- and long-term effects on brand affinity and consumer purchases in the United States. The study, which took place March 17-18, shows that 85% of all Americans expect to change their purchase behavior because of the virus. In fact, two-thirds (67%) are concerned about their ability to make ends meet during the crisis. Over the next few weeks, consumers say they plan to spend more on “essentials” and less on apparel, toys and other “optional” items. But, COVID-19 may also have long-term impacts for some brands. Roughly threequarters (73%) of those surveyed say that the way companies conduct themselves during the crisis will impact whether they do business with those brands or retailers in the future.

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COOL INSIGHTS

DISASTERS HAPPEN.

HERE’S HOW TO WEATHERPROOF YOUR SUPPLY CHAIN

I Abe Eshkenazi chief executive officer Association for Supply Chain Management

Severe weather in one part of the world can affect your supply chain from thousands of miles away. Here’s how to protect your business.

n March 2019, the Midwest was flooded for weeks. A “bomb cyclone” caused more than 1 million acres of cropland to be destroyed. The flooding was swift, long-lasting and without warning—the damage cost about $3 billion, according to a Reuters analysis of government and satellite data. And, that wasn’t the end. The U.S. Department of Agriculture found that 2019’s spring rains stopped U.S. farmers from planting on 20 million acres of farmland, hindering many parts of the world’s food supply chain. Few events can devastate a supply chain faster than disastrous weather. Other business risks— such as cybersecurity breaches and product recalls—can be mitigated or prevented by a risk management program, but disastrous weather and natural disasters are generally unavoidable. They ravage businesses and their supply chains with little warning. What’s more is, many businesses don’t plan for weather-related disasters. A report from the Met Office, UK’s national weather service, found that half of UK companies say that weather is one of three external factors that drives consumer demand, but only one-third of these companies don’t use meteorological data to assess risk in their supply chains. This is a mistake. These busi-

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nesses are leaving themselves open in recorded history, killing 86,000 people and forcing more than to prolonged disruptions, critical stockouts and escalating costs amid 500,000 people to evacuate their a disaster, potentially losing millions homes. The disaster also harmed businesses in Japan and across the of dollars. world, hitting its supply networks While we know when it will be with $210 billion in costs. hurricane season, when the weathWe can hope a disaster of this er may dip into extreme cold, or when it might rise into intense heat, magnitude won’t happen again, but we can’t control the whims of we can’t know when a supply chain Mother Nature. will be hit by a disaster. Flooding, Thus, we should earthquakes prepare ourselves, our and tornados employees and our often hit withsupply chains for largeout so much scale natural disasters. as a moment’s One way to prepare is warning. Today’s of corporations don’t check to look at reports on forecasting their supply sites for exposure past disasters, read technology to natural disasters, leaving the about what other can predict businesses at greater risks for businesses have done how much rain disruption and loss of money. well (or poorly) and identify what actions there will be, what the weather will be and where are necessary for the business amid disaster. storms are headed, but it fails to alert the industry of advanced 1. Develop supply notice of disasters. Looking at the chain visibility history of these disasters can help companies better weather-proof Managers must have visibility of supply chains. their entire supply chain. With visibility, they can evaluate their suppliLessons from Japan ers’ risks of being affected by a natIn March 2011, the northeast coast ural disaster. This evaluation must of Japan was hit by an 8.9-magnigo deeper than tier-1 suppliers— managers should also be aware of tude earthquake followed by a tsunami. The disaster was exacerbated where their second- and third-tier suppliers are located. By taking this when a nuclear reactor in Fukushistep, companies can know the risks ma melted down. It was one of the held by each of their partners and worst weather-related disasters

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plan for what to do if a partner is hit by ly pp Su r disaster. o nf tio cia According to a study so s A by Nick Wildgoose, global supply chain product manager for Zurich Insurance Group, 80% of corporations don’t check their supply sites for exposure to natural disasters, leaving the businesses at greater risks for disruption and loss of money. It can be helpful to develop a map that shows what partners are located in disaster-prone areas and connect them to an early-warning communication system, which makes it easier to prepare for the next steps amid severe weather. This allows supply chain managers to check on the facilities held by the company and its partners as disaster approaches. t en em ag n a M ain Ch

2. Plan for the worstcase scenario No one enjoys thinking about what may happen if their supply chain is affected by a natural disaster. But, by thinking about worst-case

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scenarios, supply chain managers can be prepared for a wide range of scenarios. Supply chain managers should write plans for preparation, mediation, recovery and redesign in the face of a disaster. If a storm hits, the value of the plan will greatly exceed the time and money spent creating it. Once managers have plans for worst-case scenarios, they can incorporate weather forecasts into their plans, giving the organization the ability to quickly prepare for disaster. Rather than being reactive to the storm, managers can take preventative measures, giving themselves a head start on mitigating risk to their supply chain.

3. Build a disaster response team When a storm hits, managers must respond quickly. To do this, they should assemble a disaster response team comprised of versatile and knowledgeable employees. Building this team will mean training members on what to do in the case of severe weather, as no two disasters are alike. When building a disaster response team, DisasterRecovery. org suggests using the company’s hierarchical structure to assemble the team. Organizations must also deﬁne the team’s goals and objectives,

clearly outlining responsibilities for team members. They should also create protocols for sharing information and raising alerts with the rest of the company. Disaster response teams should be responsible for modifying plans and changing responses to speciﬁc disastrous scenarios. The team, consisting of people trusted by the organization, should have autonomy to make decisions as they continuously learn about responding to natural disasters.

4. Build redundancy into the supply chain Organizations must have redundancy in the supply chain. Redundancy means keeping excess capacity or backup over the entire supply chain to maintain regular functions in case an incident disrupts business. Many businesses strive to have tightly coupled supply chains that can change with business trends. This is nice to have, but tightly coupled supply chains have a higher risk of disruption than those with redundancy. Although redundant supply chains may cost more and be slower to change, they help supply chains become more resilient to weather-related risks. If weather trends are any indication, natural disasters will soon worsen due to climate change. Supply managers who plan for disaster are taking an important step toward keeping their global supply chain operational, even in the worst conditions. Don’t let your supply chain be needlessly left out in the storm.

APRIL 2020 | FOOD LOGISTICS

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COVER STORY

BY MARINA MAYER, EDITOR-IN-CHIEF

MANAGING

ALONG THE SUPPLY CHAIN

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From ensuring regulatory compliance to overcoming food fraud, here’s how the cold food and beverage industry can achieve a strong food safety culture.

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t’s March 25. In the midst of the Coronavirus disease (COVID-19). Schools and libraries are closed. Restaurants only offer drive-through or pickup service. Shoppers flood grocery stores, hoarding everything from toilet paper to frozen pizzas. In fact, the frozen food aisles emanate a scene from The Walking Dead. Every day, the news breaks with updated cases, reports and status of how the United States—and the world—are safeguarding food, employees and the future of companies. And, safeguarding food at a time when the nation hunkers down is an unprecedented situation. For starters, the U.S. Food and Drug Administration (FDA) issued a temporary policy for FDA Food Safety Modernization Act (FSMA) supplier verification on-site audit requirements during the COVID-19 public health emergency “to not enforce requirements in three foods regulations to conduct on-site audits of food suppliers if other supplier verification methods are used instead.” Plus, the travel restrictions and advisories associated with COVID-19 may make some audits temporarily impractical to conduct. “While our grocery stores are facing unprecedented demand, we are working with the industry to minimize disruptions in the supply chain due to COVID-19-related travel restrictions,” says FDA commissioner Stephen Hahn. “The policy will help to minimize disruptions, so that the food industry can meet the demand while also continuing to conduct supplier verification activities that are designed to ensure food safety and follow government travel restrictions and advisories.” The FDA anticipates that receiving facilities and importers will resume on-site audits within a reasonable period of time after it becomes To improve food practicable to do safety in supply chain so and update their management is a food safety plans combination of the accordingly. people, processes and But, some technologies involved. protections already live in the FSMA requirements, according to Frank Yiannas, FDA’s deputy commissioner for food policy and response. “A critical part of the U.S. Food and Drug Administration’s mission is safeguarding the human and animal food supply, helping to ensure that our food is not contaminated at any point during its journey along the supply chain,” he adds. “We do not anticipate that food products would need to be recalled or withdrawn from the market for reasons related to the outbreak, even if a person who works in a human or animal food facility is confirmed to be positive for the COVID-19 virus.” What’s more is, evidence from the European Food Safety Authority (EFSA) reveals there is currently no evidence that food is a likely source or route of transmission of COVID-19. “Experiences from previous outbreaks of related

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COVER STORY

continued

A Digimarc study

Digimarc Corp.

reveals 80% of manufacturers will report a problem from mislabeled products on their primary production line, while 67% still use manual inspection methods.

coronaviruses, such as severe acute respiratory syndrome coronavirus (SARS-CoV) and Middle East respiratory syndrome coronavirus (MERS-CoV), show that transmission through food consumption did not occur. At the moment, there is no evidence to suggest that coronavirus is any different in this respect,” says Marta Hugas, EFSA’s chief scientist. That being said though, the food and beverage industry still faces a host of food safety challenges, ranging from lack of traceability and transparency, to compliance and recall prevention. Food safety leaders are under tremendous pressure to gain customer trust by delivering consistently high-quality food across the complex supply chain, as outlined in an expert column from Gisli Herjolfsson, co-founder and CEO of Controlant, San Francisco. “Signiﬁcant growth in the recent number of food safety incidents and recalls, an increase in media scrutiny and evolving regulatory requirements have placed increasing responsibilities on food safety leaders to re-gain consumer trust by delivering consistently highquality food cross the complex cold chain, while meeting the various regulatory requirements. Every business is unique and maintains

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its own distinct operational requirements. What is common, however, is that the strength of a food brand is comprised of the sum of the operational, regulatory and reputational risk points that have been effectively mitigated by employing the right people, processes and technology.” When it comes to food traceability, some are stuck in a past in which each segment in the food system is responsible for

officer, Office of Media Affairs, Office of External Affairs for the FDA, Washington, D.C. “And, it’s largely done on paper,” Turney adds. “However, with the emergence of new digital technologies and the continued advancement of sensor technology, many believe the one-step forward and one-step back model of food traceability is an outdated paradigm for the 21st century. When we look at how other industries are able to track through digital means, the movement of planes, ride sharing and packaged goods, it appears that we could be on the verge of realCrisis management time tracking exercises for the types when it comes of food safety issues to food.” that could occur in your Changes facility is an excellent in food way to calibrate your production organization’s attitude and supply and preparedness for a chains are also becoming more real event complex, providing more opportunities for tampering and difficulties in track and trace. “To improve food safety in keeping track of supply chain management is food, taking one step forward to a combination of the people, identify where the food has gone processes and technologies and one step back to identify the involved,” says David Cahn, director source, says Amanda Turney, press global marketing Elemica, Wayne,

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COVER STORY

continued

Pa. “Supplier relations programs and performance tracking is a key initiative for many organizations to begin with to help mitigate potential risk. Initiatives to track ingredients by a lot or supplier needs to be able to go beyond a single tier of visibility to a multitiered network for complete visibility. Today, resource and implementations of digital supply networks is only growing at this point to accommodate the food safety or quality risks beyond the ﬁrst tiers in the supply chain.”

exercised food safety preparedness from those who don’t deem these issues as that important. “Crisis management exercises for the types of food safety issues that could occur in your facility is an excellent way to calibrate your organization’s attitude and preparedness for a real event,” says Steed.

Ensuring regulatory compliance

The broad geographic footprint of high-pressure processing (HPP) capacity and additional cold supply chain services can help food and beverages brands ensure food safety, efficient distribution and extended shelf life from the processor to the end user.

Ensuring regulatory compliance along the supply chain, particularly for refrigerated foods such as meat, seafood, processed agricultural products and ready-to-eat food is a great concern. “We need to improve not only recall prevention, but also the effectiveness of actually recalling product. We can start with improved and more consistent training, while also evaluating the effectiveness of that training. Further, there should be a greater focus on keeping recall procedures current to regulatory requirements before a crisis occurs,” says Len Steed, food safety professional, AIB International, Manhattan, Kan. “Most companies are too reliant on third-party audit scores to confirm that their food safety systems are compliant when in fact their risk-based internal audit program should be their first line of defense for mitigating organizational risk. The challenge here is having highly effective internal auditors to find significant issues before they become a crisis.” It’s the crisis management that sets apart the companies who’ve

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Universal Pure

“Preparedness will prompt a reality check as to why food safety is so important, and also establish ‘no debate’ attitudes for food safety.” For its part, Park City Group/ ReposiTrak, Murray, Utah, sees compliance as the most critical food safety challenge. “There has been a dramatic expansion of suppliers during the last few years trying to gain traction in the hottest food categories like local, organic, gluten-free, nonGMO and CBD/hemp,” says Randy Fields, chief executive ofﬁcer of Park City Group/ReposiTrak. Another challenge is management’s commitment to ensuring food safety. “The key to a successful food safety technology deployment

will always be the people that implement the system, train the users and provide support during the operations,” adds Fields. Likewise, crisis management exercises for the types of food safety issues that could occur in a particular facility is an excellent way to calibrate an organization’s attitude and preparedness for a real event. “Organizations take direction from their top executives. If the executive leadership team demands faithful execution of food safety

requirements, then that will be the priority for the organization, and they will have a culture that is committed to food safety,” says Steed. In addition to a lack of traceability lies a lack of a holistic view and understanding of potential risks that can lead to food safety and quality failures, including public health issues, lost loads and unhappy customers. “A lot of companies are still not aware of what innovative and disruptive solutions are out there for more accurate monitoring to help mitigate those issues,” says Mike Sharpe, president and CEO of Cooltrax, Roswell, Ga. “[For example], pallet and product-level monitoring, especially when paired with the reefer data, can help identify and manage food safety supply chain risk in real-time.”

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Overcoming food fraud When it comes to a safe supply chain, overcoming food fraud remains top of mind for most of

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processor assist in creating a sustainable and safe food supply chain,” he adds. “There are many solutions that help in conducting specific tests unique to their products, such as tests for added water in milk and specific pesticide/chemical residues on fruit/vegetables represented as organic. Others include infrared spectroscopy for specific beverages and supplements. But, from a supply chain perspective, increasing traceability is key. It is obvious that the more visibility into the supply that is provided will result

today’s cold food and beverage processors. That’s because they need to understand that adulteration of food products can be committed in many ways, including mislabeling, product substitutions or product adulterations throughout their supply chain, says Cahn. “Technology does help the food

in less risk. Technology around IoT and RFID used for labeling and packaging can enable product quality while also facilitating tracking and tracing throughout the supply chain, both upstream and downstream.” Food processors also need to know that monitoring compartment temperatures alone is not enough, and that foodservice operators are requesting more granular temperature reports. “[While] individual product temperatures are extremely important to the true impact on products, [so is] pinpointing temperature ﬂuctuations and any unsafe drops in temperature while also providing defensible product temperatures,” says Sharpe. “Door openings during delivery can have a drastic impact on the temperature of food products. This means if the

Label management systems allow manufacturers to implement a standardized method for producing labels and marking packaging across all processing locations.

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COVER STORY

continued

distributors are not monitoring at the pallet or product level, their reports are erratic data points that don’t show the true temperature of the product, placing unnecessary risk on your brand. These businesses can’t defend ambient/ compartment temperatures and they don’t have to anymore.” Furthermore, the ELD mandate created a scalable platform for the implementation of real-time location tracking solutions, allowing shippers and their 3PL partners to keep a close eye on highly perishable shipments like produce and frozen foods, says Corey Sergent, vice president of branch sales of GlobalTranz, Scottsdale, Ariz. “Technology that prevents a break in the cold chain is also incredibly useful. For example, during deliveries, dock seals— large pads the trailer backs up to—form a seal between the building and truck, keeping pests and debris out while keeping the cold in,” says Sergent. Additional challenges include the inability for brands to properly track their products, product spoilage within the cold chain leading to shrink and waste and just a general lack of food safety standards awareness among some start-up brands, says Tom Woodward, chief commercial ofﬁcer of Universal Pure, Villa Rica, Ga. “All sectors of the food industry are impacted by improving food safety standards,” he adds. “Ensuring the safety of foods and beverages for consumers has to be a priority, no matter the cost. Since consumers are demanding fresh products with less additives, this sector will be greatly impacted. It is the industry’s job to make sure readyto-eat products are available, but with the highest level of safety in mind.”

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Why packaging matters One of the most pertinent but often overlooked ways to keep the food supply chain safe is with the label, says Lee Patty, vice president and general manager of NiceLabel Americas, Wauwatosa, Wis. “As consumers demand more transparency and FDA regulations continue to evolve, it’s critical that food and beverage manufacturers do more than simply comply with current legislation—they need a system that’s ﬂexible and agile enough to adapt to future changes in the industry for tomorrow and beyond,” says Patty. “Legacy processes and systems simply won’t sufﬁce, and a mislabeled product

can be devastating for a brand, and worse, potentially deadly for a consumer.” According to a study from Digimarc Corp., the Beaverton, Ore.-based creator of the Digimarc Platform for digital identiﬁcation and detection, for manufacturers that monitor label accuracy, 80% will report a problem from mislabeled products on their primary production line, and 67% still use manual inspection methods. “Manufacturing quality requirements are becoming more challenging as speed of production and complexity of product lines increase,” says Bruce Davis, chief executive ofﬁcer, Digimarc. “No reads and misreads of label matches

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COVID-19 TESTS FOOD SAFETY IN THE SUPPLY CHAIN By Mackenna Moralez, Web Editor On Jan. 30, the International Health Regulations Emergency Committee of the World Health Organization (WHO) declared the Coronavirus disease (COVID-19) outbreak a public health emergency of international concern. Originating in China, the virus has spread to at least 75 other countries, including the United States. At the time of this publication, over 190,000 cases have been confirmed, with 6,500-plus fatalities—more than what was originally predicted. And, as of press time, the WHO declared the outbreak as a pandemic. China’s industries, including food and agriculture, are bearing the immediate brunt of the coronavirus outbreak, according to a report published by Rabobank. The overall impact, which is most severe for foodservice and on-trade channels, could be more serious and longer-lasting if the virus is not contained within Q1 2020. From a logistics standpoint though, the biggest strain has been on limited capacity through hubs in China, including the aviation sector suspending flights. And, dis-

ruptions to inbound and outbound air cargo shipments, trucking and rail cargo services continue to persist. “We have seen that in the way that it’s spreading across into different hubs where we see alternative routes to be overly burdened, such as the rail system,” says Koray Köse, senior director of supply chain research for Gartner, Stamford, Conn. “Now with the crisis and the hubs being closed and product movements are still active to some extent, but not necessarily from those regions, will become crowded and impacted. This means that there’s an additional strain on the overall network to move material.” Go to https://foodlogistics.com/21122485 to learn more about how the Coronavirus disease (COVID-19)’s impact is felt in nearly every cold food and beverage sector in the supply chain. And, keep an eye out for Food Logistics’ May 2020 issue on ports and ocean carriers to learn more about COVID-19’s impact on imports and exports of cold foods and beverages.

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on packaging can be very costly. The list of beneﬁts of package enhancement for consumer brands continues to grow, providing further impetus for adoption.” Technologies such as label management systems allow manufacturers to implement a standardized method for producing labels and marking packaging across all processing locations. Food and beverage processors can also integrate labeling with other business solutions like manufacturing execution systems (MES) and enterprise resource planning (ERP) systems. Meanwhile, cloud-based label management systems help companies store, change and approve all labels from a centralized location. “Advancements like these can eliminate manual data entry errors and drastically reduce the potential of a recall due to a mislabeled product,” says Patty.

Improving food safety supply chain management At the end of the day, the last-mile carriers between the distribution center and grocery store or foodservice establishment are the most impacted from a tampered food supply chain. “These carriers are dealing with multiple stops, and when the doors are opened at each stop, the temperature in the back of the trailer can raise to unsafe temps, so product monitoring is key,” says Sharpe. “This is why pallet and product level monitoring are crucial in the transport of food. Gone are the days of looking at an ambient/ compartment temperature reports with erratic data points tied to door opens and reefer shut offs. The new best practice is technology that gives real-time alerts, reporting on the pallet and reefer with a true read on the temperature of individual products. It’s really

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changed the game, allowing distributors and food operators to feel proud to share their temperature reports with their customers knowing they will solidify trust and safeguard them from FSMA fees and fines.” To improve food safety in supply chain management is a combination of the people, processes and technologies involved, says Cahn, especially since specific sectors are more relevant than others when it comes to food fraud. “Supplier relations programs and performance tracking is a key initiative for many organizations to begin with to help mitigate potential risk. Initiatives to track ingredients by a lot or supplier needs to be able to go beyond a single tier of visibility to a multi-tiered network for complete visibility. Today, resource and implementations of digital supply networks is only growing at this point to accommodate the food safety or quality risks beyond the first tiers in the supply chain,” he adds. Additionally, there are several tools and technologies available to help food processors obtain—and sustain—a safe food supply chain. This includes everything from well-trained employees who strictly follow standard operating procedures to organizations who have adopted and implemented recognized quality processes and programs to highly sophisticated pasteurization equipment such as high-pressure processing (HPP), says Woodward.

“Robust inventory tracking and management systems also provide a vital step, allowing brands visibility throughout processing and distribution,” he adds. “Processors must be willing to constantly seek ways to improve safety, and they must be willing to commit the appropriate resources. All sectors of the food industry are impacted by improving food safety standards.” Other challenges relate to

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COVER STORY

continued

changes in the environment leading to food contamination, consumer preferences, ageing demographics and habits, the limited ability to reduce foodborne illnesses by improving food safety-related behaviors and practices and overall price volatility, Cahn says. “All processors can be strengthening the food safety culture in their operations,” adds Turney. “A strong food safety culture is a prerequisite to effective food safety management. We will not make dramatic improvements in reducing the burden of foodborne disease without doing more to inﬂuence how employees demonstrate a commitment to food safety in how they do their job.” Plus, e-commerce giants and shifting consumer expectations are challenging the industry to be more agile and transparent than ever before, says Sergent. “Doing so requires a very different approach to cold chain management and transportation. Rather than relying on full truckloads delivering into regional distribution centers, e-commerce cold chains rely on more frequent refrigerated less-than-truckload (LTL) shipments, originating from a larger number of conditioned warehouses (or even retail locations) located as close to the consumer as possible,” he says. “Experienced 3PLs can offer access to refrigerated truckload and LTL capacity in a tight market, and also provide entry to conditioned facilities for the storage of products throughout the distribution network. Some 3PLs offer realtime monitoring of temperature sensors to ensure the integrity of products in transit, while also mitigating claims and lost revenues resulting from rejected loads. Most importantly, a good 3PL can act as a strategic partner to develop a customized approach to a shipper’s transportation and logistics needs that are aligned with their goals and plans for the future.”

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TARS ROCK S LY CHAIN UPP S E H T OF

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MEET THE 2020 CHAMPIONS OF THE FOOD SUPPLY CHAIN The additional 2020 Rock Stars of the Supply Chain Champions didn’t print in Food Logistics’ March 2020 issue. We apologize for the confusion. Here is a list of the additional winners:

Allan Dow president, Logility Amy Gerdes director of logistics, Werner Enterprises Bradyn Kelly product manager, Cimcorp Automation Ltd. Dave Saoud co-CEO, FreezPak Logistics David Abney vice president of food safety quality assurance, Sonic Drive-In Dawn Salvucci-Favier vice president of product management, 3Gtms Eric Rempel chief innovation officer, Redwood Logistics Grant Taylor general manager, warehousing, Taylor Logistics Inc. Greg Braun senior vice president of sales and marketing, C3 Solutions Jason Chester director of global channel programs, Infinity International Inc. Jeremy Hudson director of consulting services, Open Sky Group Joe Couto CEO for Africa, Asia Pacific & Latin America and global solution leader for 3PL, transport and retail execution, HighJump (Part of Korber Logistics Systems)

John Flynn CEO, Fleet Advantage John Richardson vice president of supply chain analytics, Transportation Insight Kelly Adams warehouse manager, slotting coordinator, SGC Foodservice Kristy Knichel CEO, Knichel Logistics Marco Ehrhardt president and CEO, Ehrhardt Partner Group Matt Brosious CEO, FreightCenter Matt Yearling CEO, PINC Neil Soni vice president of sales and business development strategy, Omnichain Patty McDonald global solution marketing director, Symphony RetailAI Peter Zalinski supply chain architect, Barcoding Inc. Rick Zaﬀarano vice president of consumer products solutions, Transportation Insight Robin Gregg CEO, RoadSync Royce Neubauer president and CEO, SFL Companies Srini Muthusrinivasan vice president of solutions advisory, JDA Software Stephen Dombroski director of consumer products and food and beverage vertical markets, QAD Inc.

Travis Wayne product manager, TEKLYNX International Vincent Rivait market analyst, BOA Logistics www.foodlogistics.com

4/5/20 3:42 PM

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How Food Safety Drives Cold Chain Logistics Food safety in the supply chain continues to be a sticky point. And, as FSMA laws and other federal regulations continue to change, companies are grappling with how to maintain a safe food footprint. Find out how your company can master the food safety challenges within a supply chain network.

October 14

Warehouse Automation Warehouse automation continues to transform the supply chain and logistics industry. From forecasting and inventory refill to visibility and end-to-end traceability, today’s warehouse solutions are designed to improve the way company track and trace product. But, how else do these solutions optimize the warehouse? Discover how warehouse automation helps boost companies to the next level.

December 2

The Future of Food Supply Chains / Executive Outlook Automation, robotics and Internet of Things remain hot topics going into 2021. But, how do things like a global pandemic transform the way these trends are implemented? What are companies doing differently to mitigate risks and better protect their people, product and planet? This industry outlook details what the future supply chain looks like, and how cuttingedge technologies help companies better prepare for what’s to come.

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4/7/20 11:44 AM

3PL & REFRIGERATED LOGISTICS

BY GIGI WOOD, STAFF WRITER

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Here’s how technological capabilities, government regulations and everchanging consumer demands transform the growth in 3PLs.

he third-party logistics (3PL) market is set to become an over $1.8 trillion sector by 2026, as reported in the latest study by Global Market Insights, Inc., Shelbyville, Del. Rapid globalization, increasing consumerism and expanding e-commerce are some of the key factors driving growth in 3PLs. What’s more is, within the 3PL sector is the rise of the frozen fulfillment industry, as more and more customers turn to 3PL providers to meet increasing customer demands. For instance, the growing impact of “The Amazon Effect” and the increasing expectations of e-commerce customers are examples of how 3PLs need to adapt to changing commerce trends, consumer expectations and technology in order to address these changes, as outlined in 3PL Central’s State of the Third-Party Logistics Report. “With the continued growth of e-commerce, third-party logistics providers stand on the brink of a technology revolution that can either propel them to growth or leave them behind in the face of rapidly escalating competition,” says Andy Lloyd, chief executive officer of 3PL Central. “As more retailers move their e-commerce to 3PL fulfillment, 3PLs will need to offer accuracy, speed, cost-efficiency, consistency and an impeccable customer experience.” Here’s how the fresh and frozen logistics sector incorporates federal regulations, technology updates and ever-changing consumer demands to heat up the 3PL market.

Changes to the cold chain logistics industry  According to the Global Cold Chain Alliance, there were 68 3PL acquisitions between 2009 and 2019; 11 of those were in 2019. www.foodlogistics.com

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With both the rise of e-commerce and the increasing expectations of a consumer-like experience for business-to-business, 3PLs are experiencing pressure to evolve regardless of their customers. For instance, 86% of American shoppers use a minimum of two

channels and spend up to 11 hours a day engaging with electronic media, according to the 3PL Central study. Additionally, in the United States alone, e-commerce grew 14.2% in 2018, reaching $517.36 billion. 3PL professionals looking to take advantage of these developing channels will need a partner to help provide the ultimate customer experience, shipping needs, reporting metrics and more. This growth also includes increased interest for services such as blast freezing, advanced packaging and labeling and e-commerce solutions. “Cold chain logistics companies have evolved their services to customers over time. Instead of customers looking at refrigerated warehouses just as a commodity for the temperature-controlled space, they are now looking at third-party logistics companies as partners who can deliver full supply chain solutions,” says Lowell Randall, vice president of government and legal affairs at Global Cold Chain Alliance (GCCA), Arlington, Va. And, as grocery delivery and meal kit services become more prevalent, shippers are looking for new business-to-consumer solutions, says Steve Taylor, director of sales, food logistics, for AIT Worldwide Logistics, Itasca, Ill. For instance, GPS tracking and tamper-proof and temperature-monitoring devices are being used to ensure quality and food safety, he says. “On a broader scale, shippers are frequently asking for the ability to monitor and, at times, make adjustments to temperature on truckload

moves while in transit,” Taylor says. “We’ve also seen a push for e-signatures/sign-on-glass technology to help resolve disputes and avoid chargebacks from large retailers.” Meanwhile, the demand for fresh produce is as strong as ever.

Ad obe Sto ck

“Consumers today want just-intime, high-quality food options year-round, so that means cold chain logistics has no room for error when delivering perishable products,” says Tony Hammonds, executive vice president of Arrive Fresh, a new division of Arrive Logistics. “It’s all about freshness and getting products on the shelves as quickly as possible, undamaged. The logistics industry is under huge amounts of pressure to reduce costs, follow new government regulations all the while meeting these consumer demands. However, the result of these pressures is the supply chain innovating on strategy, focusing on creating efficiencies and getting smarter on the needs of perishable goods shippers.”

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3PL

continued

Key trends driving cold chain logistics

 As grocery delivery and meal kit services become more prevalent, shippers are looking for new businessto-consumer solutions, according to AIT Worldwide Logistics.

r new

When it comes to frozen and perishable shipments, the industry is experiencing several ongoing developments, including consolidation, automation and warehouse capacity. For example, according to the GCCA, there were 68 acquisitions between 2009 and 2019; 11 of those were in 2019. And, more than 20 private equity firms have a position in a cold storage facility, says Randall. “Much of the growth in cold storage warehouses has been organic, however, acquisitions are increasingly used to fuel growth,” he adds. Acquisitions allow 3PLs to broaden their networks, reduce costs and solve labor shortages. Meanwhile, some providers turn to automation to lessen the impact of labor shortages. “We’ve reached a tipping point where automation has become a very viable way to augment labor,” Randall says. “We see demand for cold chain technology that efficiently and effectively addresses these costs. For example, many cold storage companies are investing in automation that enables more efficient labor usage.” The pressure to automate processes and eliminate paper-based workflows also creates the “paperless” warehouse.

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“The companies embracing new technology and connectivity will excel and remain competitive in today’s environment. 3PLs can reap the benefits of using cloudbased technology to ensure they receive a steady stream of product improvements, without additional hardware or software costs, and without having to add expensive technical resources to their staff,” Lloyd says. Another trend driving cold chain logistics is sustainability, as vendors and

suppliers increasingly look into incorporating sustainable building practices such as solar, fuel cells and energy efficient battery technology as well as new refrigeration technologies to reduce energy usage and contribute to customers’ sustainability goals. Doing so also helps tighten up warehouse capacity. “Many facilities consider 82-84% full, as they need space to operate

and manage distribution,” Randall says. “Cold storage capacity is impacted by inventories for all perishable commodities. There are a number of factors that influence capacity, including increases in SKUs and inventories to meet retailer demands, increases/changes in production and trade issues.”

New products and data analysis For its part, AIT Worldwide Logistics sees industry growth in two areas—plant-based products and data analysis. “Plant-based dairy and protein products are driving new opportunities in cold chain logistics,” Taylor says. “Many of these companies began as start-ups and their popularity has skyrocketed, so they’re faced with new logistical challenges. Logistics providers should be prepared to educate and offer solutions that scale along with their customers’ growth.” Case in point: Data released by the Plant Based Foods Association, San Francisco, and The Good Food Institute, Washington, D.C., shows U.S. retail sales of plant-based foods have grown 11.4% in the past year, bringing the total plant-based market value to $5 billion. Case shipments of plant-based protein from broadline foodservice distributors to foodservice operators increased by 20% in the year ending November 2018, reports The NPD Group, Port Washington, N.Y. As data analysis becomes more accessible and affordable, more

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clients are requesting such features as part of their 3PL network. “Quality management has become more data-driven in recent years,” Taylor says. “We’re gathering and analyzing an increasing variety of data points to validate and improve performance. Primary examples include milestone and temperature data reporting. This documentation provides powerful evidence to verify improvements to a customer’s supply chain performance and product safety.” Arrive Logistics also experienced an increase in the use of automation and data in the logistics space. “There is a myriad of technologies at the disposal of shippers to track shipments and improve different aspects of the supply chain as they strive to be paperless, frictionless, automated and connected,” says Hammonds. “At the end of the day, choosing a technology really comes down to what your business goals are and what data you need to be successful.” For instance, data capabilities are something clients should be looking for when selecting a carrier, he says. “When it comes to choosing a carrier, shippers need to make sure the carrier they select can provide the data, tracking and service they want,” Hammonds says. “It’s important to remember that technology does not equal service. You need a team that knows how to deliver a

product on-time and in-full.”

The checklist for shipping perishables Provisions of the U.S. Food and Drug Administration’s Food Safety Modernization Act (FSMA) Sanitary Transportation of Human and Animal Food Regulation (STF) mandate the safe storage and transport of foods. That’s why the American Frozen Food Institute (AFFI), Arlington, Va., in partnership with the American Trucking Association (ATA), Arlington, Va., developed an online self-assessment tool to assist shippers, carriers, loaders and receivers to determine their readiness for implementation of FDA’s STF rule. GCCA also published a best practices guide to assist companies with STF compliance. “Generally speaking, frozen products are lower risk to food safety concerns when it comes to temperature control,” Randall says. “This has been recognized by the FDA as a part of its implementation of the FSMA. FDA has found that it is rare for frozen product to be [time and temperature-controlled for safety] food. If temperature is not appropriately maintained with frozen food, there is generally quality impact before there is a problem with safety.

Fresh product is more likely to be a time and temperature control food, where temperature control is critical for food safety, as well as quality.” In addition, GCCA launched a new Certified Cold Carrier program where carriers receive certification for demonstrating knowledge and adoption of industry best practices related to the sanitary transportation of food. From regulatory challenges to state-of-the-art technologies, the rise of the frozen fulfillment industry prompts 3PL providers to keep innovating in order to meet increasing customer demands.

By combining Arrive Logistics’ split distribution model and technology with commodityfocused training, Arrive Fresh can identify carriers with the optimal experience and expectations for moving perishable items from farm to shelf.

Arrive Logistics

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APRIL 2020 | FOOD LOGISTICS

4/5/20 3:51 PM

3PL & REFRIGERATED LOGISTICS

Dave Cox president, Polaris Transportation Group

Fortunately, trade continues to flow despite the economies of the rest of the world.

Goods being moved by truck could very well be the best way to go in an emergency like this, but that doesn’t mean companies shouldn’t be diligent about adapting to present realities.

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This also included minimizing the amount of paper ﬂow at the head ofﬁce by having drivers scan their pick-up and delivery documents directly into the system. As for goods being moved, for a company like Polaris, we only ship palletized freight, which means movement of the skid is on a forklift and transferred on or off to a trailer. This is crucial to ensure that everything employees touch is palletized. This way employees aren’t actually touching anything. There is no physical hands-on interaction. Communication is also essential, so it’s a good idea to create a pandemic planning team with company executives and directors who take part in a regular conference call. At Polaris, it’s called a “daily pandemic call,” and includes

HOW THE TRUCKING I NDU

COVID members of the management team, including the chief financial officer, chief operations officer, chief technology officer, chief human resources officer and others responsible for IT, customer care, safety and marketing. Human resources plays a large

Polaris Transportation Group

n mid-March, the Canada-U.S. border closed to all non-essential travel as both countries took measures to try and stem the spread of the Coronavirus disease (COVID-19). This border is not only the longest land border in the world, but is also essential, as Canada and the United States are each other’s major trading partners. Indeed, some $2.7 billion in goods and services cross that border every day, and any glitch would present huge repercussions in the supply chain for the food and beverage industry, not to mention the supply chains of other industries. Fortunately, trade continues to flow despite the current economies of both countries, not to mention the rest of the world. But, so far there’s not been a significant dip or notable change in the volume of traffic and goods being carried by those trucks moving across the border. Goods being moved by truck could very well be the best way to go in an emergency like this, but that doesn’t mean companies shouldn’t be diligent about adapting to present realities. Here’s an outline of steps the trucking industry can take to combat the COVID-19 crisis and adapt to the “New Normal.” For starters, while one could argue truck drivers readily adapt to the concept of self-isolation since they are alone in the cab, the fact is, those drivers and the goods they carry are still not immune to the virus. For companies where the vast majority of employees were not already working remotely, it’s important to implement social distancing. Here at Polaris Transportation Group, Canda, this meant eliminating the morning coffee that drivers pick up at the customs office.

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is why it’s important to establish procedures and policies to prevent critical systems from being infected or breached. If we think of ourselves as “systems” and want to protect the health of our people, we must do the same thing with our computer systems. Having a pandemic plan in place allows companies to function and operate all critical business systems, while keeping people safe. Because of Polaris’ investment in digitization, automation and robotic process automation, we can automatically read emails and process attachments, create customs broker packages and send them to brokers and conduct machine learning to facilitate classiﬁcation of required documents and data extraction Taking your business digital leads to a cleaner order-to-cash process and removes typical bottlenecks and obstacles. This can be a huge advantage to a company involved with the supply chain, as it creates a better experience for internal customers and a better experience

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role in helping get the right cadence and “tone” for any internal communications sent company-wide. These messages must be friendly, consistent and to the point. Meanwhile, the marketing team should ensure that customers know your company is still open for business and ready to support their needs. As for IT, consider this scenario. Your CEO gets a call from operations leaders and learns that a member of the IT team is infected and must go into quarantine. If that’s not bad enough, all the order processing and email systems are down. What do you do? Who do you call? How do you deal with clients and all your partner networks? Proper planning means to prepare for unexpected emergencies, and COVID-19 is no exception. This

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NG I NDUSTRY DEALS WITH

for external customers. Here are some IT-related steps to implement in order to achieve proper pandemic planning: · Install remote systems that operate with minimal IT user interventions. This means integrated systems with clients, partners and staff all operate with minimal intervention and are managed remotely, hence, there is no requirement for physical staff to be on-site. · The entire user community can work remotely either at home or at an alternate location set up as a safe site. This way everyone has full access to ﬁles, key applications and core systems. · With communication platforms, it’s best to set up an internal messaging system that deploys emergency information out to the user communities, as well as an external messaging system that communicates with multi-media outlets. This should include everything from SMS (text) to email to social media applications. · Prepare containment procedures ready for areas of infection within the facilities. For instance, Polaris runs a digital lab that can be sealed off and used as a command center that keeps users safe, provides cleansing stations and ensures that any infected user equipment is contained and quarantined for sanitization purposes, or at the very least, safely disposed of. · Have an alternate chain of command procedure in case of executive absence, with all responsibilities outlined and communicated for key decision-making responsibilities. When preparing for a pandemic of any kind, it’s important to include organizational departments of all kinds, as well as your partners and clients.

APRIL 2020 | FOOD LOGISTICS

4/7/20 7:46 AM

SECTOR REPORTS

WAREHOUSING

THE DASH TO THE DOORSTEP—

HOW TO OPTIMIZE

E-COMMERCE ORDER FULFILLMENT FOR PEAK DEMAND

A Johannes Panzer, head of industry solutions, e-commerce, Descartes

In order to get ahead of order rushes, e-commerce companies need to ensure that their fulfillment processes are capable of meeting consumer expectations.

s online shopping becomes the first choice for many consumers, and more and more e-commerce companies begin to surface, retailers are faced with the pressures of peak shopping seasons combined with the added challenges of outshining their competition and fulfilling more orders in less time. Today, more than 40% of worldwide Internet users have purchased a product online, according to a Statista report, and the fight to claim a large portion of this pie is in full force. Furthermore, today’s shoppers focus on convenience, and whether they’re shopping for weekly grocery hauls, upcoming holidays or just the latest sales, they want their products at their doorsteps faster than ever before. As a result, the ability for retailers to get products into the hands of consumers as quickly as possible is no longer a bonus—it’s a competitive advantage. In order to get ahead of order rushes, e-commerce companies need to ensure that their fulfillment processes are capable of meeting consumer expectations while improving sales margins and maintaining a competitive edge against other players in the space.

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With this in mind, here are ﬁve tricks to optimizing e-commerce fulﬁllment and exceeding customers’ expectations during times of peak demand.

1. Automate internal processes During peak shopping seasons and other demand spikes, many organizations are faced with an exponential spike in order volumes—with increasingly less time to fulfill them. To better manage these circumstances, companies need to explore options that automate fulfillment processes to save time and improve accuracy. And, to keep up with the fast pace of orders and the limited time available to fulfill them, companies can utilize a variety of technology solutions. For example, by implementing a cloud-based and e-commerce-enabled warehouse management system (WMS), organizations can streamline warehouse workflows to increase fulfillment speed, maintain order accuracy and improve customer relationships—all while eliminating the efforts associated with manual, paper-based legacy systems. What’s more, because automated order fulfillment solutions

are equipped with system-guided processes and user-friendly interfaces, organizations can save time and money on training temporary and seasonal staff members during significant demand increases. In addition to improving order accuracy and customer relationships, streamlining warehouse workflows and fulfillment processes deliver added benefits. Automating pick, pack and ship processes through the use of barcode scanners in a warehouse can help an organization increase order accuracy and workflow productivity—improving the prospect of on-time delivery performance for the customer while helping to minimize operational costs across the board.

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2. Streamline workflows via technology In order to thrive in an increasingly competitive space, companies need to prioritize the customers’ needs and overall experience. As consumer expectations around acceptable shipping windows continue to grow, delivering orders when promised cannot be overlooked, or organizations run the risk of losing customers to competitors. Organizations working to meet these expectations will benefit from automated, cloud-based shipping platforms that can accelerate fulfillment accuracy and speed by integrating with an organization’s back-end financial systems, parcel shipping providers and online marketplaces. What’s more, leading shipping solutions enable users to “rate shop,” or compare shipping rates, delivery options, transit times and more from multiple vendors side-by-side and in real-time. This process helps retailers meet customer expectations while better understanding total delivery costs.

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3. Cross the finish line Delivering an item when it’s most convenient for the customer is now a significant competitive advantage. Delivery is no longer just about “quick” and cutting-edge shipping and delivery strategies focused on the consumer; instead it’s also about cutting costs for the retailer. For organizations aiming to wow their customers and hold their own against bigger players in the

overall retail sales. In fact, U.S. digital revenue will grow 13% year over year, according to SalesForce, accounting for total sales of $136 billion from Nov. 1-Dec. 31, 2019. With the presence of over 90 individual existing shopping channels and the rise of Google Shopping Actions, there are countless opportunities for consumers to prioritize online marketplaces when shopping. Because of this

To get ahead of the potential consequences of a challenging return management environment, and to do so in less time than ever before, companies can benefit from automated, barcode-based reverse logistics technologies. Through these types of capabilities, an integrated put-away ABC classification can expedite internal processes with return orders to re-stock shelves and accelerate future picking.

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space, an automated scheduling and optimized routing strategy can help increase delivery times while decreasing overall costs. For example, organizations can manage consumer expectations by providing dynamic booking options or by giving the customer multiple delivery choices at the point of sale (e.g., same-day, next-day, 2-hour window, 4-hour window). In addition, automated dispatch and tracking provides much-needed real-time visibility into delivery status, which gives companies the information they need to proactively manage customer expectations— especially critical during peak season’s increasing order volumes, last-minute shopping and other demand spikes.

4. Embrace online marketplaces As the world becomes increasingly digital, online marketplaces account for an ever-growing portion of

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connectivity, retailers are able to reach a broader pool of consumers both domestically and beyond. To capitalize on this growth, retailers will find additional benefits from an e-commerce-enabled WMS in peak season and beyond.

5. Prepare for returns Some gifts keep on giving while others are sent back. Getting deliveries in the hands of consumers is a challenge, and can be even harder to manage their returns. Returns can have negative financial consequences, including reduced profit margins and watered-down conversion rates, but their impact on a company’s bottom line doesn’t end there. In fact, according to Statista, return shipments in the United States are expected to cost $550 billion by 2020, and as 89% of shoppers report returning an online order, these costs show no signs of subsiding.

In addition, by optimizing returns processes, a retailer is better positioned to re-sell returned items faster. Separating the receiving and classification processes for inbound returns enables organizations to replenish various sales channels faster. These shipping technologies can further streamline the process by creating return labels on behalf of the consumer, ultimately simplifying their role in the returns process and driving a more positive customer experience. Optimizing internal processes to streamline e-commerce supply chains is a challenge, but it’s not impossible. By using readily available technologies and solutions to help automate and streamline internal warehouse procedures and fulfillment processes, e-commerce retailers are better equipped to handle the peak season rush and exceed consumer expectations.

 Using readily available technologies and solutions will help automate and streamline internal warehouse procedures and fulfillment processes.

APRIL 2020 | FOOD LOGISTICS

4/5/20 4:14 PM

SECTOR REPORTS

TRANSPORTATION

FARM-TO-TABLE PROTECTION THROUGH ADVANCED

TECHNOLOGY

The transportation and logistics aspects of any food supply chain are among the most critical functions for supporting and enhancing food safety.

ehicle customization and advanced technology are becoming more prevalent for companies in order to meet the Food and Drug Administration’s (FDA) Sanitary Transportation of Human and Animal Food mandate. Sanitary breaches in the food and beverage cold chain are dangerous to consumers and brands. And, as Food Safety Modernization Act (FSMA) regulations continue to grip the industry, companies are building new strategies to get products safely to store shelves and on to consumer’s plates. The transportation and logistics aspects of any food supply chain are among the most critical functions for supporting and enhancing food

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are built in safety. compliance Investments of regulations in modern, and prevent customized, food spoilage. temperatureFor example, controlled Fortune Fish equipment Darin Cooprider, vice president & Gourmet, a and fleets, and general manager of supply chain Bensenville, Ill.software and solutions for consumer packaged based processor technology and goods, Ryder Transportation. and distributor highly trained of meats, cheeses personnel are and seafood, relies heavily on its mandatory yet sizeable. fleet to deliver products within exFood safety in transportation begins with a vehicle and trailer that ceptionally short delivery windows. Its custom spec’d fleet of 85 vehiis customized to customer specicles have dual temperature controls fications to fit particular needs. To to transport frozen foods, fresh fish accomplish this, companies need to and live seafood such as lobster, work with original equipment manoysters, clams and mussels. ufacturers (OEM) to ensure units

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Along with custom specifications, advanced engine and diagnostic technology improves the ability for companies to track, trace and keep records during food transport. This technology, which connects the driver, dispatch, fleet manager and customers, can warn of temperature changes in the refrigeration unit, fault codes on engines and real-time location of the products. Furthermore, connectivity allows fleet managers and their customers to monitor the temperature of the vehicle where the goods are being stored, and ensures they are within the approved range for the product. This gives proof of clear custody and control of the product if questions www.foodlogistics.com

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surround the product quality. Technology that gives visibility into the movement of products and connects everyone on the supply chain is also a primary need for companies. One example is RyderShare, a digital platform that provides real-time visibility and collaboration on goods moving through the supply chain. It eliminates industry silos and creates a virtual ecosystem that connects all parties and enables the sharing of data between shippers, receivers, brokers, customers, operations and carriers. The data captured through RyderShare is turned into business intelligence by operators to make strategic changes and continuously improve operations. As a result of the visibility and collaboration, what took days and hours of numerous phone calls now takes minutes. Preventing breakdowns through regular maintenance is critical to any operations. As any food shipper can attest, a vehicle breakdown when a temperature-controlled shipment is in transit can be disastrous and costly. This is also where shippers beneﬁt from advanced engine technology that keeps them connected to their vehicles. Just as ﬂeet managers are connected to their vehicles, their maintenance technicians can be connected as well. Service centers and technicians gain better visibility into the performance of the vehicle, the engine and integrated systems. They can then plan for the maintenance activities because of the data provided by the engine technology. And, as a result, this connectivity can alert all stakeholders before a breakdown happens that prevents major downtime and product loss. “We deliver six days a week, and most of our orders

have to be turned around in less than 12 hours. Having a customized and reliable ﬂeet that is able to keep up with these demands ensures our customers are satisﬁed,” says Sean O’Scannlain, president and CEO of Fortune International. Ultimately, the food and beverage supply chain is responsible for ensuring that products are safe for consumers. It’s a responsibility that begins at the farm level and ends at the point of consumption. Maintaining food safety throughout the supply chain therefore involves compliance with numerous regulations, implementing the latest technology tools for track and trace and applying advanced supply chain strategies in transportation to support a safe and secure food supply chain. To achieve this, food producers and shippers are increasingly partnering with logistics professionals that offer expertise in food safety to meet these new and evolving demands.

The transportation and logistics aspects of any food supply chain are among the most critical functions for supporting and enhancing food safety.

APRIL 2020 | FOOD LOGISTICS

4/5/20 4:16 PM

SECTOR REPORTS SOFTWARE & TECHNOLOGY

BY MACKENNA MORALEZ, WEB EDITOR

EMERGING

TECHNOLOGIES WILL FILL, NOT STEAL

Technology and automation will not steal jobs away from humans, but instead will fill positions, so employees can focus on more demanding tasks

pon ﬁrst entering 2020, all sectors of the supply chain were seemingly optimistic about the new emerging technologies. Now, as the Coronavirus disease (COVID-19) begins to temporarily lay off human employees, emerging technologies—especially those implemented in the warehouse—are becoming more important than ever in helping to sustain the supply chain. “Focusing on the technology can be a fast path to disillusionment. The focus of the organization needs to be on the issue or challenge that is trying to be solved or helped with the technology. Companies should think with the end in mind and focus on the variables that they are trying to change; only then can they determine how technology best ﬁts into the equation,” says Matt Tichon, vice president of industry strategy at LLamasoft, Ann Arbor, Mich. The future of the supply chain, whether it be food or beverage, retail or pharmaceuticals, will be digital. However, technology and

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automation will not steal jobs away from humans as often perceived, but instead will ﬁll positions, allowing employees to focus on more demanding tasks. That’s because technology has the ability to cover those roles when a severe disruption, such as the Coronavirus, occurs. Oftentimes, technology implementation is met with resistance. But, it is important to keep team members together for an extended period post implementation, so that the technology can be monitored after it goes live. The team can then investigate and discuss what needs to be tweaked and if the expected results are not being achieved. “Organizations also need to build a team of cross-functional experts to lead the implementation team for new or emerging technologies. Having representatives from information systems, data analytics, process change experts, relevant SMEs and end users can help assure that a ‘system’-thinking approach is being used during the implementation. Taking this approach will save a lot of re-work later down the road,”

Tichon says. Right now, one of the main goals for manufacturers is to develop products efficiently and with high quality. Technology helps increase the speed at which products are produced, which is essential in the food and beverage industry. “Having real-time data that monitors the flow of goods from receipt of the order to consumption and includes the full supply chain gives manufacturers and their associates on the plant floor the ability to avoid bottlenecks and keep production moving,” says Mark Hungerford, vice president of global customer support at Leading2Lean, Sparks, Nev. “Using cloud solutions brings immediate, timely transparency to the flow interrupters in manufacturing plants. It also allows maintenance to quickly locate and repair, which keeps operations running. Cloud-based technology also allows ease of training and implementation without disruption.” One of the main challenges, though, is the short shelf life of certain food and beverage products. Extensive downtime is considered

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an enemy within the supply chain, however, it is imperative to keep the lines moving. At the end of the day though, it’s about speed, and technologies like artificial intelligence (AI) and machine learning (ML) help achieve this by identifying problems in real time. “We want to see food and beverage products spend as little time on the floor as possible. AI will help plant floor teams identify and fix problems immediately and adopt a get-it-right-the-first-time mentality. Machine learning will help with ongoing maintenance, looking for abnormalities or slow performance, so problems can be fixed by employees before the machines stop working,” Hungerford says. “When you have reliable real-time data or suggested repair items based on machine historical and output parameters, it’s much easier to make the right decision vs. relying on tribal knowledge or trial and error. In our experience, technology helps humans make faster and more accurate changes/decisions.” Connectivity also allows every single employee to have information on hand, whether it be through a tablet, laptop or smartphone. Hungerford suggests that by being connected, it is more economical and convenient to both the employee and the consumer. In this dayand-age, consumers want to be connected to the supply chain more than ever. Companies can no longer work in a “just-in-time” manner—

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customers want to see where their food is coming from and how long it takes to get there. Meanwhile, consumers demand more choice, personalization and convenience at an ever-increasing rate. The desire for high-quality products will continue to put pressure on food producers to drive efficiency. This, in turn, will create the need to use technologies that help achieve continuous improvement of the production process. “The one area that customers will continue to gain interest related to technology in the supply chain will be in the area of last-mile delivery and customer experience. The brickand-mortar experience is losing relevancy as the user experience shifts to digital,” says Tichon. “Apps become the interface and the last-mile experience is where supply chain technology will be a consideration of the consumer. Proactive updates that are pushed to the customer on delivery notification with geofencing technology should become the new norm.” Consumers are also willing to pay more for products made by companies dedicated to sustainable manufacturing initiatives. Innovative solutions—such as blockchain— make it possible to track and trace the food supply chain from farm to fork. Companies will need to find efficiencies in order to compete, and technology will continue to play a key role in this pursuit. As we enter uncharted territory within the supply chain, emerging technologies will be utilized more than ever. In fact, emerging technologies may be the solutions to many of these unsolved problems.

The following technologies will play a role in the future of the food and beverage supply chain, according to Matt Tichon, vice president of industry strategy for Llamasoft: Drones and delivery bots will play a larger role in serving as the last-mile delivery agent, especially now with the broad outbreak of the Coronavirus in the United States. As people look to maintain “social distancing,” less people are leaving their homes and thus direct-to-door deliveries will become a regular occurrence. Machines also present a safer option, as the container for the delivery can be sterilized before heading to the customer and sterilized again when the drone or delivery bot returns to the fulﬁllment center. Internet of Things (IoT) sensors will deploy to a greater extent in the production operations

of food and beverage manufacturers. More software application providers are now offering predictive maintenance and quality assurance systems. AI systems analyze historical sensor data that leads up to known offspec production occurrences. AI will then proactively monitor the sensor feeds and use advanced pattern detection to warn SMEs when variables are trending toward a future off-spec occurrence. Blockchain will become more prevalent in tracking and tracing food products. Consumers will be able to scan a 3D barcode with their phones and determine the origin of products to ensure they conform to sustainable standards and practices.

APRIL 2020 | FOOD LOGISTICS

4/7/20 2:46 PM

SECTOR REPORTS

OCEANS & PORTS

HOW SMART PORTS DIGITIZE

TODAY’S PORTS FOR TOMORROW

W Greg Tuthill, chief commercial officer SeaCube Containers

The Smart Ports concept is becoming more commonplace, as most global terminal operators adopt forwardthinking strategies to coexist in a 100% digitized processes environment.

hen the topic of Smart Ports comes up, most consumers don’t think of Domino’s pizza delivery. However, the concept, technology and the digitization applications are almost the same. With over 65% of all transaction being conducted digitally, Domino’s is now said to be one of the leading e-commerce powerhouses in the technology space. That’s becuase Domino’s has developed one of the most efficient processes in the food industry, with a focus on enhanced operational efficiencies ranging from waste elimination to on-time delivery. Utilizing advanced logistics and technology solutions have been instrumental in Domino’s ability to outperform competitors and consistently gain market share. After all, who wants their Ultimate Pepperoni Pizza to arrive cold? Along those same lines, who wants a refrigerated load of frozen shrimp to arrive warm? On-time delivery with efficient predictive analytics is playing an important role at major ports. That’s why the Smart Ports concept is becoming more commonplace. Most global terminal operators are adopting forward-thinking strategies to coexist in a 100% digitized processes environment.

Digital open architecture platforms Most ports and terminal operators

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have been adopting smart hub technology, whereby efﬁciency is attained by real-time handoffs from delivery to ship loading. Impressively, more sophisticated ports have essentially eliminated wait time, idle containers and standby labor. While all cargo segments beneﬁt from the advent of cooperative data sharing and predictive analytics applications, it has had a transformative impact on the reefer sector. For instance, live reefer loads can now move directly from cold storage to a vessel terminal with essentially zero dwell time. This means lower risk of refrigerated transport failures as well as better outcomes, with more consistent temperature and atmosphere-controlled environments. From shippers to truckers to terminal operators, the industry utilizes digitization to ensure chilled and frozen commodities are transported with a farm-to-table approach. This methodology has enabled increased cargo visibility, seamless event transfer, lower food waste and higher levels of service. Smart Ports have also enhanced control of the most critical aspects of the refrigerated cargo transport process, including minimized idle time and reefer load monitoring. The emergence of the Internet of Things (IoT), including GPS, telematics devices and remote monitoring, has transformed the industry. Furthermore, the improved ability for real-time control of re-

frigerated container environments yields signiﬁcant positive results in reliability and predictability of successful delivery rates. This realization has been attributable to the terminals, vessel operators and logistics service providers receiving early-warning diagnostics and data-sharing control to remotely make changes to temperature, humidity, air exchange or other settings, thereby mitigating the risk of lost refrigerated loads.

More capacity and more efficiency for on-time delivery When it comes to digitization, ports and terminals have been lagging behind most industries. However, recent initiatives and technology cooperatives haved allowed port operations to adopt more integrated processes than ever before. For example, enhanced reservation systems have been an important advancement in terms of driving balanced cargo loads. What’s more, the technology has enabled improved “under the hook” vessel loading, which removes

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From shippers to truckers to terminal operators, the industry is utilizing digitization to ensure chilled and frozen commodities are transported with a farm-to-table approach.

handoffs, reducing labor costs and improving capacity throughput at most ports. Collaboration among logistics partners contributing to open data networks has also produced numerous benefits. The efficiency gains have been exponential over the past 3-4 years, with optimized vessel load planning, gate receiving efficiency, sequenced truck moves and final lift loading. Although blockchain was a common term in the foray of terminal and logistics digitization strategy, there have been various associations, technology partner cooperatives and industry collaborative groups that have made significant contributions to the advancement of digitization and data sharing. The innovation surrounding prescriptive and predictive early planning data allows for enhanced pre-planning at the port hubs, resulting in lowered transaction costs and improved delivery vessel loading cycles. Recent planning methodologies offer early visibility, which enables more accurate origination to

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destination cargo mapping. Similar to e-commerce retailer’s fulﬁllment approach to provide consumer delivery visibility and reliability, Smart Ports play a pivotal role in the nextday delivery chain with data moving well ahead of the cargo.

Driving down cost while increasing terminal throughput Digital nodes are driving the efficiency of Smart Ports by utilizing electronic switching to control the flow of cargo while eliminating dwell times. Eventually, Smart Ports will provide reverse planning notifications to trigger shipper loading, trucking move execution terminal receiving and eventually vessel loading. Synchronization through digital controls will be optimized to the point that handoffs will take place in a matter of seconds. This enables loading directly from truck to vessel, eliminating the need to transfer cargo from truck to yard to vessel. This efficiency will also allow terminals and ports to increase volume throughput without any increase in

landscape footprints. The translation of this efﬁciency will drive lower cost, higher move count per shift and less cargo handling. For special commodities such as higher value cold chain products, this will improve total transit and essentially eradicate any concerns for cargo disposition changes from the delivery to vessel load. In addition, these efﬁciencies will also allow ports to leverage off-peak hours to increase capacity thereby, maximizing vessel operation loading. As a result, this will compress vessel port times and reduce transit times.

Is cargo teleporting next? Imagine shipping your goods in a matter of seconds without any dependency on cargo ships? This would mean instant transportation with instantaneous delivery. This sounds pretty far-fetched or something from Star Wars, but maybe this idea is closer to reality than we think. While it may not sound realistic, Smart Ports represent a radical transformative change for the supply chain that is already positively impacting the industry. With reduced cycle times, highly visible and predictable cargo movements, as well as reliable data that works through a trusted network environment, these enhanced capabilities provide unmatched process efﬁciencies never before seen in the industry. Who knows, maybe the next advancement to follow could be moving from the physical logistics world to an atomic and subatomic logistics one. Just as long as my Ultimate Pepperoni Pizza arrives hot.

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FOOD (AND MORE) FOR THOUGHT

Using Data Standards Today Create Blockchain Opportunities for

TOMORROW B

Kraig B. Adams VP, blockchain, GS1 US

Blockchain can be transformative if careful consideration is given to the problem it will solve and the quality of data that is supplied.

lockchain technology has the potential to unite supply chain and logistics partners in a way that many likely never thought possible. Touted as a way to reduce the abundance of emails, spreadsheets, manual labor and data silos that supply chain managers have grown accustomed to, blockchain seems almost too good to be true. Despite claims of it being an overhyped technology, blockchain can be transformative if careful consideration is given to the problem it will solve and the quality of data that is supplied. There are many questions that need to be addressed before a supply chain use case is considered. They may include: How accurate and complete is the company’s data? Is blockchain really the right solution, or can this problem be solved another way? Early adopters ﬁnd that applying blockchain to supply chain use cases can expose unique data sharing and digitization challenges. According to a Gartner study, 80% of supply chain blockchain initiatives will remain at a proof-of-concept or pilot stage through 2022 because supply chain use cases still rely heavily on analog data. Researchers state that the need to digitally capture data from a multitude of sources is critical to achieving a requisite level of visibility that leads to blockchain maturity.

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Blockchain use cases in the supply chain require a foundation based on global data standards. Key food industry players have discovered that an adherence to global data standards, such as GS1 Standards, is a critical part of preparing for this heightened level of automated and external data sharing. Here are three ways that standards can help a supply chain prepare for digital transformation through blockchain.

Data sharing beyond “one up, one down” The food industry is under pressure to step up traceability after an abundance of recalls and the U.S. Food and Drug Administration unveiling of the New Era of Smarter Food Safety last spring. In this plan, the agency called for a greater exploration of technology to modernize the supply chain and a stronger commitment to traceability to protect the public health. This activity, coupled with the Food Safety and Modernization Act (FSMA) traceability rules, means food companies will need to take action to digitize their supply chains. They will now be expected to possess far greater traceability capabilities than the minimal “one up, one down” record-keeping that is in place today, where a company may only have knowledge of where a product has come from and

where it is going. GS1 Standards gives food supply chain partners the ability to share data among different information systems, so they can essentially speak the same language and carefully map their blockchain ecosystem. Standards also enable data capture and transactions between partners to be completed automatically, without the need for manual look-ups and conversions or follow-up with customers and suppliers to check basic facts about invoices, credits, delivery receipts, stock numbers, quantities, units of measure, purchase orders and other data sets being placed on a blockchain. One particular standard that is foundational to data exchange in a blockchain implementation is called Electronic Product Code Information Services (EPCIS). Think of EPCIS as a standardized application program interface (API). Typically, an API is used to specify how software components should interact. EPCIS removes barriers that can be caused by the use of disparate, proprietary data systems. It allows businesses to capture and share information about the movement and status, the what, where, when and why of products, logistics units and other assets in the supply chain.

Sharing quality data With standards in place, a company

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FOOD (AND MORE) FOR THOUGHTcontinued

testing blockchain is also more likely to commit to effective data quality management, with strict data governance and attention to detail before any data is shared externally. Without standardsbased collaboration for data sharing systems, manufacturers and their partners risk creating and sharing an expensive and inefﬁcient ledger of potentially bad data. The root causes of data quality issues are usually basic inaccuracies (errors during item setup, for example) or incompleteness (a lack of full product attributes in a listing). Think of blockchain as a mechanism to record data. It has the unique features of immutability, more security and smart contracts to execute pre-determined terms and conditions. However, it is not designed to add data where none exists or to ﬁx errors. If supply chain partners identify products according to GS1 Standards and capture and share data in a standards-based framework, data can be transmitted in more consistent formats to feed quality information to a blockchain. Quality data is imperative to achieving the most popular blockchain use cases in the food industry right now—food safety and product information transparency. Without complete and accurate information, recalls can be slowed down or allergens may not be properly declared, both putting consumers at risk. In an industry

where all trading partners should be working toward the common goal of food safety, it is worth the investment of time and effort to ensure data quality issues are dealt with before errors become unchangeable through blockchain.

Collaboration opportunities Companies cannot simply go “get a blockchain” on their own. The full trading partner network has to be open and ready to implement the technology for it to fully function as intended. Sometimes, that network can achieve a supply chain use case such as traceability or transparency even without the use of blockchain, through standardsbased collaboration. The Independent Purchasing Cooperative (IPC), the supply chain purchasing organization for Subway restaurants, is one example of a company that evaluated blockchain and found that their existing systems based on GS1 Standards were already capable of doing what blockchain could do. Now, their blockchain initiative has been paused while the organization focuses on bringing more of their partners on board with the standards that will eliminate manual work and provide the best foundation for food traceability. Collaborating with partners is now the focus. “Having all parties using standard unique identiﬁers for products and

locations and being able to capture and share data so it’s all easily understood from system to system is the critical starting point. With traceability, it is in everyone’s best interest to start with a single source of the truth. Standards provide data consistency as the information and products move between partners,” says Lucelena Angarita, director, supply chain systems and standards at IPC Subway. IPC and others are not swearing off blockchain altogether. Instead they are ﬁnding that there are aspects of it, such as smart contracts and the ability to automate accounts receivable and accounts payable processes, that can be useful in the future. While a company may not choose to continue with a full implementation of blockchain, the exploration of blockchain forces them to take a closer look at how to support a future where massive amounts of data will be shared in new ways. This is really what’s at the heart of the blockchain explosion—a renewed interest in sharing quality data farther and faster. Even though blockchain remains in a nascent stage, supply chain managers are faced with tremendous pressure to innovate quickly. Taking a thoughtful and coordinated approach to preparing for a new frontier of digital transformation now ensures the supply chain of tomorrow will operate with more ﬂuidity and consistency.

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