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

3PLS MOVE FUNCTIONAL BEVERAGES

PEST CONTROL SOLUTIONS

CYBERSECURITY IN THE SUPPLY CHAIN

HOW PORTS REMAIN AN IMPORTANT INGREDIENT AMID

COVID-19 PANDEMIC Ports and ocean carriers institute business continuity plans to keep product moving. Issue No. 216 May 2020

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ON THE MENU

May 2020 ISSUE NO. 216 COLUMNS FOR STARTERS

The Silver Lining Behind COVID-19

Marina Mayer, editor-in-chief, says the silver lining behind COVID-19 can be what you make it—influx of automated technologies, learning new ways to do business and the industry coming together. COOL INSIGHTS

COVER STORY

How Ports Remain Important Ingredient Amid COVID-19 Pandemic Today’s ports and ocean carriers instituted business continuity plans to keep product moving amid the COVID-19 pandemic.

FEATURE

SOFTWARE & TECHNOLOGY

3PL & REFRIGERATED LOGISTICS

3PLs for Functional Beverages Grow During Global Health Crisis

3PLs will remain an integral part of the distribution process for functional beverage brands looking to scale and get closer to their customers.

Polte Corp. explains why older technologies are not feasible for track and trace.

SECTOR REPORTS WAREHOUSING

Pest Management Trends and Technology for Food Warehousing

Rail and Intermodal Powers on Despite Global Crisis

Here’s why rail and intermodal are critical infrastructures that help deliver essential goods during the nation’s shelter-in-place orders.

Cybersecurity Best Practices for the Connected World of Trucking

Trimble Technologies details the benefits of operating in a more connected ecosystem.

McCloud Services discusses how new technology can provide enormous benefits in the form of problem solving and determining the root cause of a pest problem. TRANSPORTATION

How Mobile IoT Delivers Better Location for Cold Chain

Addressing Cybersecurity Vulnerabilities in Fresh and Cold Supply Chain Amid COVID-19

Kearney discusses unlocking digital supply chains for fresh food players. OCEAN PORTS & CARRIERS

Port and Supply Chain Risk from Future Coastal Floods

Climate Central discusses how sea level rise will affect ports worldwide.

What Grocery Retailers Can Do to Address Demand Surges Now and in the Future

According to Dematic, preparation, data and planning will help grocery retailers get to a better place. FOOD (AND MORE) FOR THOUGHT

The Power of Digital Twins in Transforming Food Manufacturing

From augmentation and 3D printing to 5G and robotics-as-a-service, Lanner outlines how new technologies are shaping sectors, including food manufacturing.

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Supply Scan Food on the Move Ad Index

WEB EXCLUSIVES Learn. Innovate. News.

Knowledge. The L.I.N.K. to Global Supply Chain Intelligence foodlogistics.com/podcasts

Survey: Some Ports See Significant Changes in Storage Utilization at Ports foodlogistics.com/21129606

Study Details Supply Chain Challenges for U.S. Companies in China foodlogistics.com/12361989

www.FoodLogistics.com 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

FROM THE EDITOR’S DESK

DETAILS

THE SILVER LINING

BEHIND COVID-19 “ Marina Mayer Editor-In-Chief

I like working the trucks when they drive into the warehouse because I’m helping unload items that our customers need, such as eggs, milk and frozen pizza.” That’s my dad. He’s 67 years old, and still working as store manager of our local SuperTarget despite the Coronavirus disease (COVID-19) pandemic. Lately, he’s been helping unload trucks in place of co-workers with immunocompromised systems. I worry about him and my mom every day, but I also know that his presence in the grocery store is essential in keeping the supply chain moving. And, that’s the case for so many of our industry’s essential workers—truck drivers, warehouse managers, food and beverage manufacturers, packaging workers, software developers, grocery retail workers and so many more. What I’ve learned from being a part of the supply chain and logistics industry is that people are a part of this industry because they want to be—not because they have to be. And, for that reason, everyone is essential. The silver lining behind COVID-19 can be what you make it—inﬂux of automated technologies, learning new ways to do business, the industry coming together. For me, it’s about appreciating the better things in life. Moving away from electronics and into a good book or puzzle. Making food last. Supporting local restaurants in their time of need. Conducting Zoom calls with staff, friends and family to get some face-to-face feel. And, time. Time to actually stop and smell the tulips in bloom. This pandemic has also taught

us to work, operate, learn, function and achieve things outside of our comfort zone. It’s taught the industry to think outside of the reefer, so to speak, and be more things to different customers. Whether it’s foodservice distributors now delivering direct-to-consumer to cold storage warehouses making room for personal protective equipment storage, the supply chain and logistics industry is ﬁlled with essential workers making very essential decisions. The silver lining is the proof of concept—that food supply chains are strong and resilient. It takes a village to keep the supply chains moving. For those who have reached out to Food Logistics to provide commentary, contributed content and more, thank you. For those who have taken us along your journey to get food moving through the network, thank you. For those who have participated in podcast interviews or just checked in to say hello, thank you. While we have to do better, and must do better, I am comforted in the fact that the supply chain and logistics village is on the right path. We’re all in this together. Be sure to log on to www. FoodLogistics.com for up-to-date COVID-19- (and even non-COVID19)-related industry news, new product developments and more. Check out our new and improved podcast page titled L.I.N.K.—Learn. Innovate. News. Knowledge. The Food Logistics staff is working alongside you to help relay messaging, inform the industry and reassure readers that food is safely and effectively moving through the supply chain.

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

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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 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 | MAY 2020

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4/28/20 1:00 PM

SCN Introducing

SUMMIT

COMING IN NOVEMBER 2020 SUPPLY CHAIN NETWORK SUMMIT is the premier virtual event educating logistics professionals on the critical issues impacting – and driving – the global supply chain and logistics industry

JOIN US AS WE DIVE INTO CRITICAL ISSUES AND PROVIDE STRATEGIES AFTER DISRUPTORS: • Life After the Coronavirus • Store VS. Online – Automation and Robotics • How to Hire, Train & Speak to Today’s Youth

• Cannabis Over State Lines • Pharma VS. Food • State of the Supply Chain Industry • Supply Chain Threats

REGISTRATION IS LIMITED, CONTACT US TODAY FOR OUR EARLY BIRD REGISTRATION BRIAN HINES bhines@acbusinessmedia.com 647.296.5014 Jason DeSarle jdesarle@acbusinessmedia.com 440.476.9526 Marina Mayer mmayer@acbusinessmedia.com 920.542.1291

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4/30/20 10:00 AM

SUPPLY SCAN

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

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GLOBAL REFRIGERATED WAREHOUSING MARKET TO REACH $49.6B BY 2027

U.S. E-COMMERCE SALES GREW 14.9% IN 2019 Online spending represented 16% of total retail sales for the year, according to a Digital Commerce 360 analysis of Commerce Department retail data. Consumers spent $601.75 billion online with U.S. merchants in 2019, up 14.9% from $523.64 billion the prior year, according to quarterly e-commerce ﬁgures. That was a higher growth rate than 2018, when online sales reported by the Commerce Department rose 13.6% year over year. Total retail sales increased 3.8% in 2019 to $3.763 trillion from $3.626 trillion the year before. The performance of overall retail last year marked a slight slowdown from 2018, when sales through all channels jumped 4.1%.

The global refrigerated warehousing market accounted for $19.08 billion in 2018 and is expected to reach $49.60 billion by 2027, growing at a CAGR of 11.2%, according to a report by Research and Markets. Rising demand for perishable foods and development in the refrigerated warehousing industry continue to drive market growth. However, higher energy consumption and infrastructure costs are some of the factors restraining market growth. Based on temperature, the frozen segment is estimated to have lucrative growth in the forecast period due to increase in demand for perishable foods such as meat, ﬁsh and seafood. The demand for frozen food is increasing, particularly in the North American region. Pexels

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ONROBOT SOFT GRIPPER BRINGS FLEXIBLE, FOODGRADE-CERTIFIED HANDLING TO PICK-ANDPLACE APPLICATIONS The flexible OnRobot Soft Gripper uses three interchangeable silicon-molded cups in star and four-finger configurations to pick up almost any small object under 4.8 pounds with a delicate, precise touch. The electric Soft Gripper is food-grade-certified (complies with FDA 21 CFR for non-fatty items and EC 1935/2004) and unlike traditional vacuum grippers, requires no external air supply. “Our new Soft Gripper is challenging existing solutions for picking hard-to-grasp, delicate and odd-sized items,” says chief executive officer of OnRobot, Enrico Krog Iversen. “Unlike proprietary solutions, the Soft Gripper offers seamless integration with most collaborative robots and light industrial robots through our One System Solution.”

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

FINISTERE VENTURES FINDS AGTECH AND FOODTECH MARKETS MATURING

Finistere Ventures released its “2019 AgriFood Tech Investment Review,” which found that agtech deals continued to climb, reaching an all-time high in 2019, while later-stage venture capital valuations across the agtech and foodtech ecosystem dramatically rose. Venture capital 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. “The flow of money is shifting as the market matures. While more money pours into advanced crop protection technologies, indoor farming, alternative proteins, ingredient refinement and supply chain advances, investment in mainstays like digital ag is beginning to drop as leaders start to emerge,” says Arama Kukutai, co-founder and partner at Finistere Ventures. “Likewise, those investment reallocations will help drive a healthier, more sustainable food and ag ecosystem where fundamental value has to be demonstrated.”

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DIVERTING SUPPLY FROM FOODSERVICE TO RETAIL DURING THE CORONAVIRUS CRISIS

Ideal Warehouse Innovations’ new “power on-board” option to the Maintenance and Retrieval Cart (MARC) allows operators to access high-density storage areas and use powered cleaning tools, such as vacuums, to sanitize an otherwise inaccessible area. The MARC is a self-propelled engineered anchor system that provides operators with a “safe zone” at any location at height and depth in the rack. The MARC is often used by food manufacturers in the fast-moving consumer goods sector, where high-density storage systems are employed. These systems are configured into push back, pallet flow, double deep, and now more commonly, automated storage and retrieval systems (AS/ RS). The resulting storage configuration is both deep and high to obtain maximum density and throughput.

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IDEAL WAREHOUSE INNOVATIONS’ NEW TOOL KEEPS WAREHOUSES CLEAN

With so many Americans staying home, demand for home consumption items has suddenly surged, and food availability in the retail channel has become a concern for consumers, authorities, food processors and retailers. Sales performance data from Rabobank indicates a surge in staple and shelf-stable item sales in March, when authorities began announcing shutdown measures nationwide. Traditional items, such as pasta, baking ingredients and long-lasting dairy items, were back on consumers’ shopping lists. Rabobank estimates that every 10% drop in out-ofhome food spending (e.g. restaurants, cafes, cafeterias, etc.) translates into approximately an additional 3% in retail food spending. This estimate seeks to provide food players and grocery stores a sense of the magnitude of the challenge faced in feeding a population that was told to stay at home.

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SUPPLY SCAN

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

COMPLIANCEMATE HELPS COMPLIANCE EFFORTS THROUGH NEW APP

LEADING HARVEST SETS UNIVERSAL STANDARD FOR AGRICULTURE SUSTAINABILITY

A group of forward-looking farmers, conservationists, land owners, managers and investors launched Leading Harvest, an agriculture sustainability venture providing what is said to be the first scalable, industry-wide solution to climate change, biodiversity, the resilience of croplands and communities and more. Leading Harvest is a universal standard that can be applied across all crops and geographies while addressing a uniquely broad spectrum of societal interests. This flexible, farmer-first approach encourages innovation and new operational efficiencies that can be adapted one crop row to the next, or one farm field to another. This venture also allows for mass participation and scale, with over 2 million farmland acres committed to being enrolled. Leading Harvest requires that independent, third-party experts audit producer performance in all aspects of the standard, ranging from soil health, energy use, air quality and water management to reducing impacts on climate change and comply with applicable labor laws and regulations.

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As the impacts of the novel Coronavirus disease (COVID-19) increase and spread, foodservice establishments are diligently working to protect their guests and staff. Yet, the safest and best practices to deal with COVID-19 are evolving almost daily, and implementing and adhering to rapidly changing guidelines and best practices is a 24/7 job. Foodservice companies can go to ComplianceMate and download ComplianceMate’s free web-enabled application that works on any device. “ComplianceMate C19” supports efforts to control the unique, constantly evolving recommendations and requirements for COVID-19 safety. The app will keep foodservice operators automatically up to date on guidelines from the Centers for Disease Control (CDC), the U.S. Food and Drug Administration (FDA) and the U.S. Department of Health and Human Services (HHS) through real-time checklists and workflows. At launch, the app will include guidelines for employee wellness checks, cleaning/ sanitation checks, personal hygiene advice and procedures for returning to work after an employee tests positive. Simultaneously, the app will record actions taken by the employee, so managers can quickly and easily confirm compliance with COVID-19 measures. The app can be used by C-stores, grocery, quick-service restaurants, fast food and restaurants offering third-party delivery. “We want to help the foodservice industry successfully navigate through this trying time, so we’ve worked with leading public health professionals from around the country to develop this app,” says Tom Woodbury, vice president of national accounts for ComplianceMate. “As best practices continue to evolve, the app will be updated to reflect those changes.”

WESTSIDE PRODUCE JOINS FREE ITRADE TRACEABILITY CAMPAIGN

Wesstside Produce is the latest customer to pick up the food safety mantle and join iTrade’s iTracefresh program. “As a family business, ensuring that our customers have confidence in the safety of our food is incredibly important to us. As we continue to grow our company, iTrade’s traceability offer will also help us appeal to and comply with new buyer requirements quickly and easily. We are excited to join the world’s safest food supply chain and use traceability as a strategic differentiator,” says S. Garrett Patricio, chief operating officer at Westside Produce. Data from a year-long pilot with a major industry buyer showed that suppliers adopting iTrade traceability increased their trading volumes by an average of 55% in just 12 months. Additionally, a sample of just four new growers added a combined $10 million in revenue over the same period. “The world would be a better place if everyone knew where their food came from,” says Rhonda Bassett-Spiers, chief executive officer of iTradeNetwork. “Consumers are choosing brands that can ensure the safety of their food and we are excited to have Westside Produce join us in creating the world’s safest food supply chain.”

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4/28/20 10:25 AM

2020 Educational Webinar Series STAY ON TOP OF THE LATEST TRENDS AND BEST PRACTICES IN THE GLOBAL FOOD AND BEVERAGE SUPPLY CHAIN.

June 17

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.

September 16

Achieving Zero-Waste Footprint – Tales of a Sustainable Supply Chain Achieving a sustainable supply chain is a vital element in many company’s corporate sustainability reports. Find out from this case study on how to achieve a zero-waste footprint in a world of waste.

October 14

How Building Design Improves Cold Storage Efficiency From insulated metal panels to recycled building materials to solar roofing options, today’s cold storage facilities are built with sustainability in mind. Find out how certain building materials and design-build elements help a site achieve a sustainable footprint.

December 2

The Future of Food Supply Chains From blockchain and artificial intelligence to automation and robotics, what is the future of food supply chains? How will technology continue to impact the way product moves from Point A to Point B? Check out what’s to come supply chain-wise in 2021.

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

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BLUJAY AND LOADSMART PARTNERSHIP ENABLES BOOKABLE RATES AND CAPACITY FOR TMS USERS

BluJay Solutions and Loadsmart announced a strategic and technical partnership that delivers greater transportation efficiency and visibility to shippers. The API-enabled integration of Loadsmart’s digital freight platform with BluJay’s cloud-based transportation management software (TMS) allows customers access to Loadsmart’s instantly bookable truckload rates and guaranteed capacity directly within the BluJay platform. “Loadsmart and BluJay share a passion for innovation and a commitment to putting customers first, making this partnership a natural fit,” says Felipe Capella, president and co-founder of Loadsmart. “The integration of our industry-leading platform with BluJay’s first-of-its-kind, cloud-based TMS delivers tangible value to our shared customers, who now can more seamlessly and efficiently lock in rates and capacity through a single UI.”

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WOMEN IN TRUCKING ASSOCIATION, ESPYR SUPPORT PROFESSIONAL DRIVER HEALTH

Women in Trucking Association (WIT) and Espyr announced a partnership to support professional driver health. The partnership will provide WIT-member truck drivers with 90 days free access to Espyr’s Fit to Pass coaching program and iResolve, Espyr’s CDL Driver Support Hotline. Espyr’s Fit to Pass is a customized coaching program designed to improve the health of professional drivers and help them meet the physical requirements of the DOT recertification exam. iResolve is a tele-mental health solution that provides Pexels immediate support for driver mental health and work life-related issues. Espyr’s professional driver health services are available to all current WIT member drivers thanks to Amazon. “Our concern is for the nation’s drivers who have to cope with the added challenges brought on by COVID-19 on a daily basis and need the support these programs can provide,” says Chris Heine, Amazon’s director of transportation and WIT board member. “Drivers have always kept America moving. Now more than ever we need to care for them like they care for the products they haul.”

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CMA CGM LAUNCHES SEAPRIORITY GO

The CMA CGM Group launched SEAPRIORITY Go, a new high value-added service within the CMA CGM+ range of solutions. SEAPRIORITY Go ranks customers’ goods as priority whether it be for container allocation or loading on board. CMA CGM also launched CMA CGM+, a range of solutions that complements its conventional maritime transport and logistics services. Part of the BOOST category under the CMA CGM+ umbrella helps to expand customers’ business, even when demand is strong, giving them more agility, ﬂexibility and protection.

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UNION PACIFIC PLEDGES SCIENCEBASED TARGETS TO REDUCE EMISSIONS

RLS LOGISTICS’ NEW TEMPERATURECONTROLLED LTL SERVICE HELPS SHIPPERS AVOID RETAILERS’ FINES

To help food manufacturers deliver on time and avoid fines, RLS Logistics unveiled day-specific temperature-controlled, less-than-truckload (LTL) service to select grocery warehouses nationwide. According to RLS vice president, business development John Gaudet, “RLS is raising the bar for temperature-controlled LTL distribution by offering a service other carriers and transportation providers won’t because they’re not willing to risk it or upset their established schedules. By committing to day-specific service, we’re making a commitment to our partners and putting skin in the game.” www.foodlogistics.com

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Union Pacific announced its intention to set science-based targets to determine how much and how quickly the company will reduce greenhouse gas (GHG) emissions. A commitment letter was submitted to the Science Based Targets Initiative (SBTi), which independently assesses corporate emissions reduction targets in line with what climate scientists say is needed to meet the Paris Agreement goals. “As one of the nation’s largest freight railroads, it is our responsibility to act as environmental stewards, reducing emissions and enabling sustainable economic growth across our supply chain,” says chairman, president and CEO Lance Fritz. “This is a challenging task, as it means examining every aspect of our operation and looking for innovative solutions while continuing to create long-term value for our shareholders, customers, employees and the communities where we operate.” The company’s target will use the SBTi’s Sectoral Decarbonization Approach Transport tool, which models targets for direct and indirect transportation emissions. Union Pacific anticipates finalizing its target and submitting for approval within a year. Pexels

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

DAT ADDS ‘BOOK NOW’ AUTOMATED BOOKING TO LOAD BOARD NETWORK DAT Solutions unveiled an automated “Book Now” option on select loads in the DAT Load Board network. Book Now streamlines the tendering process, allowing carriers to search for loads and lock in a rate with the click of a button on their mobile or desktop device. In its initial release, the automated booking feature will be available on loads posted by brokers participating in DAT’s early access program for Book Now, including Knight-Swift Logistics; Kingsgate Logistics; Circle Logistics; Trinity Logistics; Cavalry Logistics; and Choptank Transport. Beginning in May, all brokers can add the Book Now option to their posted loads. “One of the problems that has plagued any attempt to automate the time-consuming freight tendering process has been scaling the solution to work for every company,” says Sarita Benjamin, director of products at DAT. “That’s the focus of Book Now, to offer automated booking that ﬁts our customers’ needs without sacriﬁcing the business relationships they rely on.” DAT

SHIPCHAIN, DISTICHAIN ANNOUNCE PARTNERSHIP TO FACILITATE GLOBAL TRADE

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ShipChain announced a new partnership with Distichain to help small- and medium-sized businesses access global markets. Distichain’s technology will bring in their established marketplace to companies of all sizes, along with the documentation pertaining to different shipments to be stored on the blockchain. ShipChain will then track and trace the shipment via blockchain technology through its delivery. Once the shipment has been tracked, payments are handled via Distichain’s system. “This new partnership with Distichain started with a vision to bring an advanced technology platform to simplify the complexity of global supply chains. To that end, we have delivered a true supply chain control tower approach, powered by Getty Images blockchain to help small and medium global businesses monitor and track their shipments all over the world. This will enable our trading partners to BRINGG, POSTMATES INTEGRATE TO capitalize on revenue in increasingly competitive PROVIDE MORE OPTIONS global markets,” says John Monarch, chief executive ofﬁcer, ShipChain. Bringg announced that Postmates will be part of the BringgNow solution. Using BringgNow, restaurants and grocers can manage their delivery operations, including in-house drivers, for free, while using Postmates for their regular delivery fees to augment delivery options in real-time. The combination will allow SMEs that were either previously unable to deliver or cope with delivery demand in the wake of COVID-19 to provide dependable, contactless deliveries. “BringgNow is about providing a free delivery solution to SMEs to help them survive the market upheaval and growing demand that COVID-19 is causing,” says Guy Bloch, chief executive ofﬁcer of Bringg. “Our partnership with Postmates is a major boost to those businesses because now they will be able to augment existing drivers, provide contactless deliveries, and not have to close up shop while only the big players are able to cope with this new environment of delivery needs.”

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BE HONORED FOR YOUR ACHIEVEMENTS! Each year, Food Logistics showcases individual and corporate leaders in the food and beverage industry. Plan now to enter your company — or a cutting-edge client or vendor — in one of these industry-leading recognition programs:

TOP 3PL & COLD STORAGE PROVIDERS Are you a leading third-party logistics and cold storage provider? Be honored for your achievements. Nomination deadline: May 29, 2020 Winners announced in August 2020 issue

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FL100+ TOP SOFTWARE & TECHNOLOGY PROVIDERS Showcasing top software and technology providers supporting the global food and beverage supply chain. Nomination deadline: September 18, 2020 Winners announced in November/December 2020 issue

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ONLINE NOMINATIONS OPEN APPROXIMATELY TWELVE WEEKS BEFORE THE DEADLINES LISTED ABOVE. AWARD RESULTS, INFORMATION AND NOMINATIONS POSTED ON:

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

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4/28/20 11:22 AM

COOL INSIGHTS

WHAT GROCERY RETAILERS CAN DO TO ADDRESS DEMAND SURGES

NOW IN AND

THE FUTURE T Mohamed Ali vice president, commercial acceleration, Dematic

The current environment may well turn out to be a tipping point for grocery businesses to accelerate thoughtful investment in automation and software technology to prepare their supply chains for major disruptions.

here are a lot of old jokes about the futility of trying to predict the future, and there’s a good reason for that—it’s human nature. But, folks in the supply chain and logistics industry can’t help wanting to know what’s to come. This is especially true in times of uncertainty. We as humans have an instinctive desire to look ahead, envision a better place and get there as soon as possible. Today, for the grocery business, a better place would no doubt be anywhere but here—a place where supply chains make sense again and are comfortably under control. The thing is, predictions won’t get us to that better place. But, preparation, data and planning will. Here’s what that means for grocery retailers.

That was then— predicting the future Previously, grocery retailers focused on meeting generally recognized supply chain challenges such as the growing volume of online orders and navigating the anticipated peaks for in-store shopping (typically seasonal). Those plans not only made sense, but also produced generally favorable results:

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· Automated solutions replaced manual processes to build repeatable efficacy. · Predictive analytics now find potential issues before they become problems, which reduced downtime. · Advanced warehouse execution software now monitors operations and generates valuable data. All good efforts, to be sure. But, as it turns out, they have been pointed a bit too rigidly at where the industry was predicted to go and not so much at maintaining flexibility to pivot to where the industry could go. Supply chains that have been working toward what was predicted haven’t necessarily been prepared for what has actually happened. To say that hindsight is 20/20 is not only a cliché; it’s also not particularly helpful. However, hindsight may help get the industry gain the proper mindset for what to do now.

cery retailers to consider to make their operations more adaptable. Many grocers have already been heading this way, but recent events have clearly demonstrated the need for some adjustments.

Revisit the customer experience The first priority of grocery retailers must remain—as it has been since the beginning of the Coronavirus disease (COVID-19) crisis, meeting customer demand any way possible—changing business hours

This is now—preparing for the future Let’s acknowledge what has happened and get on with preparing for what’s next. Here are some actions for gro-

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 Retailers that have not already been implementing automation technology should note the critical areas in this very real-world scenario where that technology would now be helping.

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to allow more time to stock shelves, re-deploying corporate employees as needed to in-store positions, evaluating demand on a minute-by-minute basis and reacting accordingly. In the midst of these activities, it’s also important for retailers to keep their eyes open for valuable takeaways and lessons to be learned. | For example, retailers that have not already been implementing automation technology should note the critical areas in this very real-world scenario where that technology would now be helping. For those who do have automation technology, the consideration should be understanding differenc-

es between how it was intended to be used and how it is actually being used. Retailers should start with “now” in terms of meeting surges in customer demands and work their way back to figuring out how to organize automation to best meet those demands.

Look to software technology for advantages Companies with automation technology in place should look to implement strategies that address continued demand surges in online and in-store shopping. Evaluating data to uncover and anticipate inefficiencies hidden in order fulfillment is especially critical, as the world moves past the initial crush of in-store activity and into increased online activity. Again, starting at the point of what is necessary for meeting customer demand today and working back to leveraging automated technology will create balance and adaptability. Today’s technology allows companies to take full advantage of software algorithms to assess picking opportunities and workflows to best optimize order fulfillment.

Move toward new distribution models Dematic

Dematic

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As the industry moves past the peak of the COVID-19 crisis, gro-

cers should start rethinking their distribution models. Recently, a single, giant distribution center feeding dozens of stores made excellent business sense and was the model of choice. But, now, in addition to the current crisis, growing trends include smaller stores and increased urbanization, and that model may not be the best fit for all cases. The need for increased speed and flexibility is pointing many grocers toward hub-and-spoke models where order fulfillment is more dispersed. Instead of a rigid, top-down hierarchy, orders can be handled more nimbly across large and small distribution centers, as well as omnichannel fulfillment from in-store stock. Hub-and-spoke models include dark stores and micro-fulfillment centers that can address unplanned surges in demand and be quickly converted, for example, from online fulfillment to immediate in-store fulfillment.

This is the future—it comes soon enough It’s entirely reasonable to make predictions about what is going to happen in the future—less reasonable to think any of us can truly know what will happen. The current environment may well turn out to be a tipping point for grocery businesses to accelerate thoughtful investment in automation and software technology. Doing so will prepare supply chains for major disruptions that spike demand and help better plan for the unpredictable. But, grocery retailers who take a deep accounting of their operations and prepare them to be as nimble and flexible as possible will be in much better shape for whatever the future brings.

 Companies with automation technology in place should look to implement strategies that address continued demand surges in online and instore shopping.

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COVER STORY

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BY MARINA MAYER, EDITOR-IN-CHIEF

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HOW PORTS REMAIN IMPORTANT INGREDIENT AMID

COVID-19 PANDEMIC Today’s ports and ocean carriers institute business continuity plans to keep product moving.

hen the Coronavirus disease (COVID-19) pandemic hit, the nation’s supply chains turned upside down. Consumers ﬂocked to grocery stores to stock up on food and supplies. Foodservice distributors pivoted in order to deliver items to grocery retailers instead of restaurants. Food and beverage manufacturers worked in overdrive to keep up with the surge in demand. And, for many of today’s maritime transportation companies, the tidal wave effect from the COVID-19 crisis was felt coast to coast. So much that the World Trade Organization (WTO), Switzerland, expects world trade to fall 13-32% in 2020, likely exceeding the trade slump brought on by the 2008-09 global ﬁnancial crisis.

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COVER STORY

continued

JAXPORT

Another WTO report reveals that tary policy. Keeping markets open the COVID-19 crisis has resulted in and predictable, as well as fostering 36% of ports reporting an increase a more generally favorable business in utilization of warehousing and environment, will be critical to distribution facilities for foodstuffs spur the renewed investment we and medical supplies. And, about will need. And, if countries work 22% of the ports report delays (6together, we will see a much faster 24 hours) or heavy delays (24-plus recovery than if each country acts hours) in cross-border road transalone.” In fact, the greatest single chalportation. One port even indicates cross-border lenge impacting trucking has been the global supply discontinued, chain for food is while 43% of COVID-19, says respondents Marc Iampface delays in of the ports report deieri, managing cross-border lays (6-24 hours) or heavy director in the trucking activtransportation delays (24-plus hours) in practice for ities. cross-border road transAlixPartners LLP, Trade was portation. New York. already slowing “This is placing in 2019 before great strains upon ocean carrier COVID-19, weighed down by trade equipment management, with contensions and slowing economic growth. But, estimates of the extainer imbalances becoming exacerpected recovery in 2021 are equally bated initially by blanked or skipped uncertain, with outcomes dependsailings in Asia, and now by demand surges. In short, carriers have their ing largely on the duration of the containers in the wrong place,” adds outbreak and the effectiveness of Iampieri. “After the Coronavirus, the policy responses. the top challenges “This crisis is first and foremost for both ports and a health crisis [that] has forced ocean carriers are governments to take unprecedentrooted in disruped measures to protect people’s lives,” says Roberto Azevêdo, WTO tion. For example, director-general. “These numbers ocean carriers are are ugly—there is no getting around dealing with the that. But, a rapid, vigorous rebound impacts of IMO is possible. Decisions taken now 2020. Similarly, will determine the future shape the ports are of the recovery and global growth challenged by the prospects. We need to lay the foun- impact of supply/ demand dynamics dations for a strong, sustained and of the carriers, but socially inclusive recovery. Trade in addition they are will be an important ingredient exposed to changes here, along with fiscal and mone-

 MSC expanded its fleet with 5,000 refrigerated containers equipped with Carrier Transicold’s XtendFRESH atmosphere control technology.

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MSC Mediterranean Shipping Co.

22%

in trade patterns, and the ports are also exposed to the consolidation in the market.” The spread of COVID-19 has created significant challenges for world trade and for the container shipping sector in general, according to Pyers Tucker, business development for MSC Mediterranean Shipping Co., Switzerland. “Our actions began in January following the initial reports of the outbreak in China. MSC announced a number of ‘blank sailings’ from Chinese ports to U.S. and Europe to rationalize capacity supply following the lower demand due to the extended Lunar New Year holidays and while much of China’s industry was on lockdown,” Tucker adds. “During that time, the pickup of reefer containers in certain Chinese ports were also impacted. This resulted in congestion of reefer containers in some ports due to a shortage of reefer power plugs at the ports. We had to divert the impacted reefer containers to various transhipment ports in Asia where the respective services call and also

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where reefer plugs are available.” Another big challenge for carriers is how to manage the re-shuffling of demand, routes, personnel and more. “Our biggest challenge as a carrier is how much to reduce capacity and costs in light of dropping demand and achieve the best balance between continuing to serve those customers still shipping, save enough costs and be ready to ramp up again quickly when the recovery starts. Some very large bets are having to be placed, with potentially existential consequences,” according to a spokesperson for Hapag-Lloyd, Germany. “Most crew changeovers are overdue with many ports forbidding crew coming ashore—and even where they may land—there are not many flights to bring in replacement crew/fly off-duty crew back home. Individual port restrictions due to local COVID-19 measures vary substantially and continue to change frequently, which makes services, port calls and schedules even more difficult to manage. And, many empty containers are in the wrong places due to a string of disruptions due to lockdown measures. But, there will be recovery.” For its part, Jacksonville Port Authority (JAXPORT), Jacksonville, Fla., experienced an 8% decline in containers from the previous March, but anticipates seeing a sharper revenue impact in April, May and June. “The extent of that impact is still to be determined. We are working closely with our ocean carriers and tenants to monitor the situation and prepare,” says Chelsea Kavanagh, public information officer for JAXPORT. “Our diversification model played an important role in reducing the impact on our revenue last month. For example, a large U.S.

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military cargo move took place in March, which helped offset some of the drop in commercial cargo volumes. We also saw an increase in demand in our forest products business. The diversification of JAXPORT’s cargo types and trade lanes will help the port to emerge from the virus more readily than a increase in canceled sailings and a port heavily leveraged in one trade reduction in cargo moving through lane or commodity, but our contain- the nation’s second-busiest port. er volumes continue to be a major “With the extended factory driver of port growth.” closures and slowdown of goods The Port of Oakland’s loaded movement in China and other Asian container volume declined 7.4% in countries in February due to Lunar March from 2019 totals, a direct re- New Year and COVID-19, we are seeing shipping lines needing to sult from the COVID-19 pandemic. cancel some sailings,” says Mario According to the port, containCordero, executive director of erized import volume in March POLB. “Once the virus is contained, dropped 10.3% from March 2019, we may see a surge of cargo, and export loads were off 5% and the our terminals, labor and supply return of empty containers to orichain will be ready to handle it.” gins in Asia decreased 23%. Cargo volume has also declined at the Port of Long Beach (POLB) Business as usual due to fewer ship calls amid the Activities account for more than overseas one-quarter of the COVID-19 outnation’s economy, support over 31 break as well as million American lingering effects jobs and generate from the trade more than $378 dispute with decline in containers billion a year in China. Terminal from the previous March, federal, state and operators and but anticipates seeing a dockworkers sharper revenue impact in local tax revenue, according to moved 538,428 April, May and June. the American 20-foot equivaAssociation of Port lent units (TEUs) Authorities (AAPA), Alexandria, Va. in February, down 9.8% compared That’s why many ports have to February 2019. Imports dropped instituted business continuity plans 17.9% to 248,592 TEUs, while exto remain open amid the COVID-19 ports increased 19.3% to 125,559 outbreak and continue moving TEUs. product in and out of the United Although the United States and States. China signed a Phase 1 preliminary For the Georgia Port Authority trade agreement in January, about (GPA), for example, ports continue $370 billion in Chinese goods steady operation with normal, 24remain under the increased tariffs. hour vessel operations and terminal COVID-19 has caused further disservices. ruption to the supply chain with an Hapag-Lloyd

ORT

T he diversification of JAXPORT’s cargo types and trade lanes, such as in Blount Island Terminal, as seen here, will help the port to emerge from COVID-19 more readily than a port heavily leveraged in one trade lane or commodity.

 Ocean-bound food transports, especially in temperaturecontrolled containers, have continuously increased, and box carriers in some fields are even benefiting from cargoes being shifted away from conventional reefer operators.

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 MSC introduced a new class of 23,000-plus TEU ships.

continued

To keep cargo moving smoothly, GPA implemented an “Isolate and Operate” strategy, where leadership teams spread out workers to minimize the risk of possible exposure. Where possible, staff members work off-site via technology established in case of hurricanes. “Our leadership and operations teams remain on terminal to ensure this vitally important gateway continues to run smoothly,” according to Griff Lynch, executive director, GPA, Savannah, Ga. “Because this is a time for the port community to come together, we are also in continuous communication with our colleagues at neighboring ports to determine best practices. Our partners at the International Longshoremen’s Association have started monitoring the temperature of union members as they report to work.” The North Carolina Ports enforced the Continuity of Operations Plan (COOP) to ensure the safety and well-being of personnel, contractors and visitors while maintaining continued operations during any crisis or event. To meet the demands of the COVID-19 event, the Port of Virginia implemented a cross-divisional planning and response team by utilizing its own COOP, which provides the framework for managing all hazardous events, including pandemics. And, for SQF-certified ports such as GT Wilmington USA, Wilmington, Del., mandatory workplace habits and behaviors such as handwashing, sanitation and personal protective equipment were already in place prior to COVID-19. “The good news is that GT Wilmington USA is prepared more than most terminals in this regard,” says Eric Casey, chief executive officer.

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MSC Mediterranean Shipping Co.

COVER STORY

Improvements move full steam ahead

fleet with IMO-approved Exhaust Gas Cleaning Systems (ECGS),” says The Coronavirus may be hampering Florian Liebetrau, director IT, maglobal trade, but it hasn’t broken the rine and maritime operations, MSC. supply chain at the Port of Oakland. For instance, in 2019, MSC That’s because it received the port’s introduced a new class of 23,000largest ship ever—the container plus TEU ships—led by MSC Gülsün, vessel MSC Anna. said to be the largest container ship The 1,312-foot-long vessel was in the world, with the lowest carbon on special assignment from MSC to footprint by design. collect a backlog of empty contain“In addition, MSC is actively engaging with potential vendors ers in Southern California before to investigate solutions related to arriving in Oakland. biofuel blends, hy“We’ve spent years, and milMSC is installing drogen fuel cells, complementary lions of dollars StarConomy control keeping ahead software on its entire Star battery power of the pace of Cool fleet, reducing energy and possibly wind and solar as part trade and the consumption by up to of a long road size of ships,” of discovery in says Danny relation to future Wan, executive policy goals,” adds director of Port Liebetrau. of Oakland. MSC also expanded its fleet The MSC Anna can carry up to with 5,000 refrigerated containers 19,200 20-foot cargo containers, equipped with Carrier Transicold’s making it what is said to be the XtendFRESH atmosphere control largest vessel ever to visit a North technology. This system manages American port. oxygen and carbon dioxide levels Outside the Coronavirus situation, another priority for MSC is the within refrigerated containers and removes ethylene, thus slowing the ongoing journey toward sustainripening of produce and helping to ability. preserve its quality beyond what “MSC is committed to reducing can be achieved by refrigeration the environmental footprint of alone. global supply chains and keeps In addition, MSC is installing investing in sustainable global trade StarConomy control software on via the largest container shipping investment program in the industry, its entire Star Cool fleet, reducing energy consumption by up to 50%. including retrofitting the existing

50%.

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will have offices, meeting spaces, crane operator rest and training areas and a full-service kitchen, as well as the backup power required to maintain critical infrastructure in the event of a power outage. The state-of-the-art facility will boast both electric and hybrid equipment to ensure efficient operations while reducing emissions. Phase 1 will house the tallest ship-to-shore (STS) cranes at the Port of Charleston with five cranes with 169-foot lift height, as well as 25 new hybrid rubber-tired gantry (RTG) cranes, all set to arrive this year. “In a little more than a year, ships will call on the country’s newest container terminal,” says Jim Newsome, president and CEO of S.C. Ports Authority. “The opening of the Hugh K. Leatherman Sr. Terminal in March 2021 will greatly enhance our cargo capacity and big ship capability. Our strategic investments and years of hard work are coming to fruition at just the right time, as more ships call on the East Coast. This new terminal propels S.C. Ports into the future.” The Maine Port Authority announced that a waterfront cold

storage facility for Iceland-based Eimskip USA, Treadwell Franklin Infrastructure, Yarmouth, Maine, and UK-based Amber Infrastructure. Called the Maine International Cold Storage Facility, the waterfront cold storage facility will serve seafood, blueberries, potatoes and other perishable exports. The ﬁnished facility will encompass 120,000 square feet with a maximum height of 75 feet, 12 loading dock bays and space for 20,000 pallets. For its part, Port Manatee unveiled a new throughput-maximizing facility to help speed shipments of fresh produce to Florida consumers and beyond. Then new transfer facility, with room for 120 trailers, optimizes capabilities for expediting movement of cargo by freeing up near-dock yard space for stacking as many as 300 containers at a time. The North Carolina State Ports Authority welcomed what is said to be the largest containerships following the completion of Phase II of the Turning Basin Expansion Project at the Port of Wilmington. The expansion allows the port to accommodate ultra-large container vessels (ULCVs) with a length of

○ Port Manatee unveiled a new throughputmaximizing facility to help speed shipments of fresh produce to Florida consumers and beyond.

Port Manatee

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“Given that 90% of the world’s goods are moved by cargo shipping and it’s by far the most energy efﬁcient mode of global cargo mass transportation, shipping will continue to play a critical role in helping consumers in different parts of the world enjoy fresh fruit and vegetables all year-round,” adds Liebetrau. Meanwhile, the Long Beach Container Terminal and SSA Marine at Pier J shipping terminals at POLB are adding new zero-emissions equipment known as top handlers. These new terminals will demonstrate three never-before-tested Taylor battery-electric top handlers (two at SSA and one at Long Beach Container Terminal) for approximately six months. The equipment is part of POLB’s Commercialization of POLB Off-Road Technology Demonstration Project (C-PORT), which is designed to test the viability of the zero-emissions vehicles used on the docks to meet the port’s 2030 goal of a zero-emissions cargo handling ﬂeet. “We expect these battery-electric top handlers to be able to make it through the daily two-shift cycle before needing a recharge,” says Cordero. “We’re eager to see the advancements in technology that come from this demonstration and what it means for the commercialization of this equipment.” The Harbor Commissions from the Ports of Los Angeles and Long Beach will both consider a resolution to approve a proposed Clean Truck Rate to accelerate the introduction of cleaner drayage trucks into the port complex. Meanwhile, the Hugh K. Leatherman Sr. Terminal at the South Carolina Ports Authority prepares to open a new container terminal in March 2021. The 34,853-squarefoot building, built by Samet Corp.,

MAY 2020 | FOOD LOGISTICS

4/28/20 11:47 AM

COVER STORY

1,200 feet. Meanwhile, the U.S. Department of Transportation’s (USDOT) Maritime Administration (MARAD), Washington, D.C., awarded more than $280 million in discretionary grant funding through the new Port Infrastructure Development Program to improve port facilities at or near coastal seaports. “Ports are gateways to the world, and port infrastructure investments will improve the regional economy, increase productivity and economic competitiveness and create more jobs,” says Elaine Chao, U.S. transportation secretary. The Port Infrastructure Development Program supports efforts by ports and industry stakeholders to improve facility and freight infrastructure to meet the nation’s freight transportation needs. Of the 15 projects awarded grants, six are located in Opportunity Zones, which were created to revitalize economically distressed communities using private investments. The topic of terminal-carrier collaboration has been on Hapag-Lloyd’s radar for quite some time. “At the same time, it will require

cross-sector cooperation and has complexities in itself with regards to compliance, competition and security. Any collaboration beyond our vessel and company networks will lead to further interconnectedness and additional technical interfaces,” adds Hapag-Lloyd’s spokesperson. Furthermore, a growing number of ports are looking to propane to meet their environmental and energy solution needs. “Ports operating propane-powered equipment are able to reduce emissions, improve air quality, decrease the negative environmental impacts surrounding facilities and help people living and working near ports across the country breathe cleaner air,” says Jeremy Wishart, director of off-road business development for Propane Education & Research Council (PERC), Washington, D.C. “This holds true whether it be a forklift, a medium-duty vehicle or even a small ocean liner moving materials throughout a port.” Propane technology can provide port operations with a variety of advantages, including increased energy efficiency, energy security

and resiliency, plus the versatility to tackle a wide variety of applications. Furthermore, ECU Worldwide, Miami, developed ECU360, a stateof-the-art online platform that provides online visibility and doorto-door rates and manages cargo transportation across a number of origin and destination points within the United States as well as other countries. ECU Worldwide also launched LCL Express Service “XLERATE,” a container-freight-station-to-container-freight-station express service that leverages MATSON Navigation from Shanghai in China to Los Angeles. Despite the COVID-19 pandemic, U.S. ports and ocean carriers continue to remain open. And, thanks to some energy efficient enhancements and an influx of autonomous solutions, the U.S. maritime industry will continue to act as an important ingredient in moving product in and out of the country. Go to https://foodlogistics. com/21128958 to find out how ports are shifting gears to help those in need.

m c

Port of Virginia

 The Port of Virginia implemented a cross-divisional planning and response team by utilizing its own Continuity of Operations Plan, which provides the framework for managing all hazardous events, including pandemics.

continued

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4/28/20 11:48 AM

COVID-19

OPENING THE BLACK BOX OF SUPPLY CHAINS AMID

f hin

aras g

t’s human nature to charge ahead without thinking about what lies in front. It takes a major event, such as an individual health scare or a global crisis, to Stefan Reidy reassess how what we do directly CEO, relates to our ability to deal with Arviem future challenges. Consider supply chains as an The days of example. For years, few compaquality control nies have been willing to properly stopping as invest in supply chains. They see it the goods purely as a cost. As buyers, we’re all leave the guilty of expecting logistics to work manufacturer without us having to pay for it–we may not realize it, but every time could well be we choose a retailer that offers free over. shipping over one that charges for it, we send a message that how our goods get to us is not worth paying for. That’s why, even as the function has commenced its own digital transformation, the focus for supply chains has been about removing cost rather than adding value. Is it surprising then that in today’s current situation, business continuity has been so comprehensively derailed?

A lack of supply chain resilience The critical part is the focus, or lack thereof, on transportation. In almost every other part of a business, quality control, health and safety and purchasing departments hold signiﬁcant power. Yet as soon as it comes to transport, all that stops. Sit in on any tender meeting between beneﬁcial cargo owners, freight forwarders and carriers, and the rate is more often than not the deciding factor. Goods are manufactured, and then they disappear into

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a black box (as far as cargo owners are concerned), only to reappear some weeks later. It’s in that black box that margins lie–as long as cargo owners don’t peer too closely, this is where logistics providers make a profit. But, with pressure on rates and fluctuating costs, there isn’t much available. And, when there’s little profit, there’s minimal room for growth or inward investment. This is why there is so little redundancy and so little capacity within supply chains.

Post-pandemic supply chain disruption Much is going to change following the Coronavirus disease (COVID-19) era, and the industry’s relationship with transportation is one of them. From individual shoppers no longer able to assume nextday delivery to major businesses stunned by the lack of capacity in their supply chain, we all must reassess how we ship and receive goods, and more importantly, how we pay for it. It’s not simply a case of shoppers willing to pay extra–a Coronavirus delivery tax, if you will. As supply chains are revised and all parts of the logistics sector reconsider how they operate, there is an opportunity to drive real change and unlock the value for customers of all types. What does that look like, and how will it be realized? The key is the black box and changing the industry’s view of it. In short, it’s about transparency, visibility and more valuable insights.

The need for visibility The days of quality control stopping as the goods leave the manufacturer could well be over. Customers at all points in the value chain are going to demand a more resilient service. But, with so many stakeholders and different players in even the shortest of logistics networks, how can cargo owners ensure that quality runs through every aspect of their transportation function? The answer lies in data-driven transparency. As data has exploded, the last thing it has given many businesses is a clear view of their organization. Yet when applied in the right manner with the correct tools and expertise, data can shine a light on what’s happening across all parts of a complex operation or network. But, what is the right manner? It’s getting data in real-time and having the ability to not only read it, but also learn and apply its insights aligned with experience. Then it needs to be coupled with an analytics platform that can make sense of the inputs and turn it into actionable insights. It is only through this that businesses will be able to track cargo, identify issues and make decisions using trusted information rather than with wild guesses. Suddenly, logistics and transportation move from only a cost to a value-add. Why? Because cargo owners are armed with evidence to make decisions not just on their transportation, but also across their entire business.

MAY 2020 | FOOD LOGISTICS

4/29/20 2:57 PM

3PL & REFRIGERATED LOGISTICS BY BRIELLE JAEKEL, ASSOCIATE EDITOR

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4/28/20 5:42 PM

3PLS FOR FUNCTIONAL BEVERAGES

GROW

DURING GLOBAL HEALTH CRISIS 3PLs will remain an integral part of the distribution process for functional beverage brands looking to scale and get closer to their customers.

n the past few years, wellness has been a growing theme with consumers in not just the United States, but also worldwide. This trend has been so pervasive that it has extended to the beverage industry, making what is known as functional beverages an important part of consumption. The demand for beverages that offer nutritional value or energy is increasing at exceptional rates, and with the Coronavirus disease (COVID-19) pandemic limiting consumers’ trips to the grocery store and ability to dine out, this growth has only escalated. According to a report from Research and Markets, before the outbreak hit, the functional beverage sector has been poised for a compound-growth rate of 11% from 2020 to 2024. Functional beverages, including energy drinks, prebiotic and probiotics, special fruit and vegetables juices, sports drinks and CBD-based drinks are any form of beverage consumed with the notion of doing something speciﬁc for the body, . Their functions can range from providing alertness and energy to anxiety reduction. But, how does this pertain to the third-party logistics (3PL) sector? These companies are responsible for the safe transportation and

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arrival of functional beverages, an exceptionally important part of the process, as these products often have shorter shelf lives, thus putting the pressure on delivery times.

Pandemic stressers In the last two months, the 3PL sector has been extremely stressed since the COVID-19 outbreak began, with consumer demand surges and regulation changes putting pressure on all parts of their businesses. In one example, RJW Logistics saw a 26% jump in functional beverage business alone after the pandemic began in the United States, prompting the Woodridge, Ill.-based company to hire almost 100 employees in just one week. “For all of our customers during COVID in the month of March, we saw a 33% increase in demand overall,” says Kevin Williamson, chief executive ofﬁcer of RJW Logistics. “Then, in just the functional beverage portion of it, we saw a 26% increase. With that heavy demand during this short amount of time, it was a challenge. We had demand go up overall for us from 1.8 million cases on average to over 3 million cases on a weekly basis. That caused a tremendous amount of pressure within our network and other ﬁelds in order to keep up.” Since functional beverages aimed at wellness grew in popularity in the post-digital-revolution age, many began their lifespan as startups and direct-to-consumer (DTC) businesses. Digital offerings and easier-to-access resources have al-

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RJW Logistics

 Timely delivery of functional beverages is key for 3PLs.

 The time that it takes functional beverages to get on shelves is imperative, as they spoil faster.

lowed many individuals with unique ideas, but who lack significant capital to still shine. With the COVID-19 affecting consumers’ ability to shop at physical grocery stores, DTC procedures are spreading throughout the entire food industry, causing other functional beverage manufacturers to adopt similar strategies. Going forward, following the pandemic, this sector along with many others will operate more closely to the consumer with more robust e-commerce options. According to CBRE Research, over the next five years, the industry will see an additional 75-100 million square feet of industrial freezer and cooler space to accommodate demand from online grocery ordering. “One of the biggest shifts in consumerism is that fewer people are not physically entering the store, which means how we get products into the hands of consumers has changed,” says Craig Laughlin, senior business development representative at Zipline Logistics. “For functional beverages, that may mean a shift to more DTC and e-comm shipping, as well as potentially altering quantities to facilitate a new mode of shipping. After a return to normalcy, brands that have

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been able to stay connected with their customers will be positioned to recapture traditional retail sales and potentially push into new markets.” With the need to get closer to consumers emotionally and operationally, these brands need to get closer to consumers physically as well. This means leasing warehousing space that puts the manufacturer’s distribution process closer to main routes or major markets. The faster these brands can get their products to their customers, the better. Last year, food and beverages accounted for several million additional square feet of the largest industrial leases compared to 2018 to support growth into home delivery, reveals the CBRE report. “Food and beverage has been looking to get physically closer to the markets it serves, and the COVID-19 crisis has only accentuated this,” says Mary Shacklett, president of Transworld Data. “One result is that more warehouse space is being leased by food and beverage companies at distribution points closer to major consumer centers. With warehouse distribution centers closer to major consumer areas, direct travel routes to nearby retail centers are shorter. This has had impact both on 3PLs that handle logistics for food and beverage companies and for companies that own and run their own fleets.”

companies saw a few of their functional beverage customers get bought out by larger companies who tend to keep logistics in house. The popularity of the brands, mixed with the capital of the large companies, creates an ideal situation for larger beverage companies to buy smaller functional beverage brands. “The smaller guys that we’ve serviced in the past 12 months, we’ve seen get bought out, one by Coca Cola and another by Dr. Pepper,” says Williamson. “That’s really the trend that we’ve seen where these smaller guys were struggling a little bit to keep up with demand and understand the forecasting. And, when you’re dealing with the big guys like Coca Cola and Dr. Pepper that have the infrastructure, they have a little bit of advantage where they can just put those items within their network and distribute for less because of the infrastructure that they’ve built over the past few decades.” Since many of these brands are so new, they lack the historical data to forecast

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Big guys buy out There are a wide variety of functional beverages backed by venture capitals and private equities, but there is also a significant number of smaller operations who rely on 3PLs to scale and complete their operations. Before COVID-19, some 3PL Zipline Logistcs

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models for the future. Major beverage manufactures have the resources and infrastructure to do so easily. With the pandemic drastically changing consumers’ behaviors and needs, this has become even more difficult. A lack of order history between the small functional beverage brands and the 3PLs could cause issues between the two, which means a projected scale is important in managing relationships. “Given the growth and lack of historical order profiles, the unknown could result in unrealistic expectations between the manufacturer and the 3PL,” says Michael Wohlwend, managing principal at Alpine Solutions. “There will need to be a sliding scale with regard to the project, so that as the business grows and the demands grow, the 3PL can flex up to meet the demands.” Newer brands are also pushing up-and-coming products that can offer relatively new health benefits such as CBD and mushroom-based ingre-

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dients. For these smaller functional beverage brands, it is a priority to push the positive effects that these ingredients can produce. However, suppliers have minimum order quantities in place, which can make ordering and manufacturing new products difficult without knowing if the product will catch on in the eyes of consumers. These brands are then unsure of how much investment should be placed on which ingredients. “Some functional beverage brands are pushing products into the market and trying to educate about the benefit of lesser-known ingredients, for example, mushrooms, sugar cane and the incredible growth of CBD,” says Laughlin. “Many young functional beverage brands routinely have issues with minimum order quantities and need to monitor true delivered cost.”

Choosing a partner For 3PLs that handle the labeling side of business, labeling is everything to the functional beverage, which increases the stakes. While taste is the leading factor of importance regarding other beverages, consumers are more interested in quality and function. They want clean labels with the beverage’s functions clearly spelled out. “For a lot of functional beverages, a big part of the value proposition is attention to the back of the label and the ingredients inside,” says Laughlin. “There has been a real trend for consumers to seek out clean labels with limited ingredients that they can understand (and pronounce). Beverage brands are innovating to create multi-functional beverages and some of them are pushing to be true lifestyle beverages—some with SKUs aimed at a midday wake up or evening calming.”

Alpine Solutions

Functional beverages often boast a shorter lifespan than other beverages, as beverages that tout wellness abilities are often made with fresh ingredients that can spoil quickly. This means 3PLs look for innovative ways to shrink delivery time as much as possible, yet still maintain freshness and even protect against freezing during the winter months. Growing technology has allowed for refrigerated containers to do just that. In addition, visibility and clear transportation times is significant. “With clean labels and minimal preservatives, a lot of functional beverages both require refrigerated transportation and have a shorter shelf life, which means transportation has to be predictable and efficient,” continues Laughlin. “Getting these products, with looming expiration dates, in front of the consumer as quickly as possible is imperative to mitigate waste and spoilage.” The smaller functional beverage brands can look for partners to help scale their business, picking a 3PL that fits with its specific needs. Capacity concerns are a significant issue with any brand looking for a 3PL partner. With the current pandemic situation, it is now even more important for brands to choose a

 3PLs help manage distribution for functional beverages brands looking to get closer to their customers.

MAY 2020 | FOOD LOGISTICS

5/4/20 12:26 PM

3PL

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MODERNIZING

BEVERAGE LOGISTICS

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partner that can meet their specific and unique needs. “In the current market environment, it is critical that beverage producers seek out 3PLs with carrier relationships [that] give them access to capacity where and when they need it. It’s also critical that your 3PL partner has strong retail experience,” says JJ Lewis, vice president of national sales at GlobalTranz. “While many retailers waived late fees at the height of consumer demand, these penalties are being re-implemented as the market trends back to seasonal norms. A strong 3PL partner can also provide beverage producers with TMS technology they need to gain visibility, drive efficiencies and manage costs. And, lastly but perhaps more importantly, shippers should seek out a 3PL with a highly experienced team to provide the hands-on service and solutions that shippers need to navigate the current marketplace.” Whether or not it will be “business as usual” following COVID-19, functional beverage brands are likely to continue growing in popularity alongside the wellness trend. And, 3PLs will remain an important part of the distribution process, as these brands look to scale and get closer to their customers.

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For third-party logistics (3PLs) that handle functional beverages, the technology is mostly similar to any other beverage shipment, only that expiration is usually more of an issue since the ingredients are so fresh. During the severe cold, many 3PLs tap antifreeze technology in transportation systems that keep beverages from freezing and vice versa for the warmer months. Some 3PLs control oxygen levels and other gases to keep fruit from ripening, and this technology can also be used with these fresh beverages if need be. However, these beverages are typically sealed airtight. Technology in both personal and professional lives has pushed individual’s expectations on extreme transparency. Customers in the business-to-business world have the same concerns as those at home, maybe even more so, and want to know where their shipments are at all times and how long it will take to get to its destination. That means that the 3PL partner’s transportation management systems (TMS) must have clear visibility, allowing the customer to see all aspects of the transportation and shipping process. The need for visibility is important in the container as well. Being able to track the environment of a container remotely while in motion can mean the difference between a spoiled shipment and a perfect one. In terms of trucking, this can also save the driver time by eliminating the need to manually check the back of a truck on a continual basis. This is where the antifreeze as well as refrigeration technology comes in; sensors track the temperature of the container and can determine what temperature to keep the shipment. For antifreeze, technology such as heated compartments and protective blankets are used. While the wide range of technology, sensors and solutions provide clear visibility on shipments, they also offer something just as valuable if not more so to both the customer and the 3PL—data. With every aspect of the logistics process being tracked, companies can tap into this data to find out what parts of the process are pain points and how to better predict or be prepared for the future.

As these technologies become more sophisticated and advanced, the need for paper diminishes. It is now possible for partners to handle all aspects of their relationship in a digital matter, including requesting quotes and publishing estimates, proof-of-delivery documents, the bill of lading and other more. Many cloud-based solutions allow for the protection of these documents and for partners to easily search for and find them when needed, no matter the location. “In the current market environment, it is critical that beverage producers seek out 3PLs with carrier relationships [that] give them access to capacity where and when they need it,” says JJ Lewis, vice president of national sales at GlobalTranz. “It’s also critical that your 3PL partner has strong retail experience. While many retailers waived late fees at the height of consumer demand, these penalties are being re-implemented as the market trends back to seasonal norms. “A strong 3PL partner can also provide beverage producers with TMS technology they need to gain visibility, drive efficiencies and manage costs,” he adds. “And, lastly but perhaps more importantly, shippers should seek out a 3PL with a highly experienced team to provide the hands-on service and solutions that shippers need to navigate the current marketplace.” In order to keep up with modern expectations, 3PLs need to continually invest in technologies such as environmental monitoring, visibility, data acquisition and cloud-based document handling. In addition to customer-based solutions, 3PLs use in-warehouse technology to help make their operations run easier. Technology such as layer picking is a growing theme. Layer picking picks an entire layer or more at one time to save a significant amount of time. “Several 3PLs have or are about to invest in layer pick technology,” says Michael Wohlwen, managing principal at Alpine Solutions. “Rather than have a picker go to a location and pick cases of product, there are several different types of technology that allow for the picking of a layer or multiple layers of a pallet at one time.”

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Get

SUPPLY CHAIN IN THE TIME OF

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he events surrounding the spread of the Coronavirus disease (COVID-19) virus have been unprecedented and profound. And, there’s never been a bigger spotlight on supply chains and food safety. In recent weeks, retailers have seen complete runs on inventory of everyday staples from the obvious and expected (anti-bacterial wipes and hand sanitizers) to perhaps arguably the irrational (bath tissue and bottled water). At the same time, shipping lanes from airfreight to transoceanic are being shut down—in many cases hindering the delivery of products most critically needed now. The impact of COVID-19 has been overpowering—not just in the moment, but perhaps permanently changing consumer behaviors and supply chain policies. Consumers have transformed quite rapidly as home delivery of foods ordered online continue to spike like never before, driven both by inventory shortages at physical stores as well as shoppers not wanting to subject themselves to crowded retail environments. China has experienced a 20% growth in home food deliveries. U.S. trends suggest greater growth amid stayat-home orders. Brick Meets Click research measured a 233% jump in March vs. August 2019. Instacart looked to hire an additional 300,000 workers due to a large increase in demand. Shoppers who have historically shied away from buying perishable foods such as meat,

poultry and produce from online grocers may be resigned to the practicality of now buying those categories online for the first time. These current spikes in online orders for home delivery strain the capacity to meet demand. Delivery dates and windows are being pushed beyond the pre-pandemic norms, and both delivery services and consumers are left with little choice but to sometimes accept sub-optimal delivery dates and times. In an eMarketer survey conducted by Bizrate Insights, 84% of online grocery shoppers bought non-perishables, while just 45% bought perishable items. A separate survey conducted by Bizrate with Varcode found only one out of every four consumers bought perishables online for home delivery. Of the 75% of respondents who had never ordered fresh or frozen foods online, 55% suggested “temperature” and “freshness” as reasons for not having done so. One reason this perception may exist is the difficulty in shipping and storing perishable goods. According to the World Health Organization, there are 48 million cases of foodborne illness in the United States each year with temperature abuse factoring into 32% of investigated cases. The economic impacts of food waste are also profound as the USDA estimates Americans throw out $160 billion worth of food annually. Though consumers can’t ascribe a fiscal value to food

wasted via temperature abuse, clearly it is a priority in the mind of the consumer. In the Bizrate survey, 99% of online grocery buyers said it would be valuable for them to have proof their food temperature was maintained throughout a shipment’s trip. To add to this, 92% of consumers said they would switch online retailers who did not offer temperature assurances if another retailer did. Another wrinkle in this growing home delivery trend is the deployment of “contactless delivery,” an attempt to mitigate the spread of COVID-19 by avoiding human interaction and leaving shipments of food and essentials unattended at consumers’ doors. Many of the top food delivery services have implemented these last-mile practices, creating new quality, safety and efficacy concerns just as upstream supply chains experience delays, diversions and other challenges. Couple “contactless deliveries” with the volume induced, sub-optimal delivery windows and the increased need for enhanced safety measures becomes obvious. Now is the time to implement new supply chain safety measures to solve these problems. The general public’s awareness and expectations with regard to such things as cleanliness, food safety, drug efficacy and how to acquire food and drug essentials may forever change as a result of this pandemic. And, while this chaos and uncertainty is challenging to all, business leaders with an eye to the future have the conviction to act on them now will emerge stronger than those that don’t.

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MAY 2020 | FOOD LOGISTICS

4/29/20 2:53 PM

SECTOR REPORTS

WAREHOUSING

PEST MANAGEMENT

pro de an tec sys

TRENDS & TECHNOLOGY FOR THE FOOD WAREHOUSING INDUSTRY

A robust pest management plan helps facilities eliminate pest concerns that may threaten a company’s reputation and brand.

he Coronavirus disease (COVID-19) crisis has enabled the medical industry to expand capabilities in technology. Although the technological accomplishments within the pest management industry pale in comparison to these medical achievements, the technology itself has the power to make dramatic changes in the protection of food from pests.

Technology and detection Cameras, infrared sensors and motion sensors are being used to detect a variety of pests. While rodents were the first pest group targeted, pests, flying insects and even bed bugs can be monitored via electronic monitoring devices today. Here at McCloud Services, we have tested a variety of different types of sensors and cameras for remote and on-site monitoring in rodent management programs. Some of the sensors will alert based on the rodent physically contacting a sensor via movement, some will alert based on infrared and others base their detection on weight changes on a pad that will trigger an alert. All types of sensors will help facilities combat pest issues, but there can be a slight disadvantage for devices that trigger based on mechanical movement. In some cases, the movement can be triggered in high traffic areas by humans

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bumping into the trap or cleaning crews hitting the trap. This makes proper placement of the trap vital, as it should avoid high trafﬁc areas and/or be placed inside a guard to protect the trap from accidental triggers. This can help reduce false alerts. In addition to sensored devices, there are standalone cameras, like trail cams, and camera-mounted devices inside stations or traps. Cameras can help identify species, patterns, times of activity and reaction of the pests to control devices. These cameras educate the industry about basic rodent behavior, behavior of speciﬁc rodent populations at a facility and how to modify the control strategies. A recent camera deployment at a facility determined routes of rodent travel and snap trap avoidance by a house mouse infestation. The cameras showed that the mice were running up the legs of warehouse racking in the 3D distribution. We then secured snap traps to the vertical rack legs in their travel paths. In another installation, cameras revealed that dock doors were being left open for extended periods of time, allowing for pest infestation. The technological advancements of cameras doesn’t end there. There are now camera-based pheromone traps and insect light traps to photograph trap captures. The photos are then sent to a pest management company for analysis. However, this new technology

Pat Hottel technical director, McCloud Services

could have potential impact with select traps located in difficult-to-reach areas. As these cameras continue to be refined through updates, they may also be able to serve other areas in a facility. In fact, the use of artificial intelligence (AI) to recognize and identify the photo captures of these cameras would be particularly useful in providing quick and more accurate data for the facility and pest management professionals (PMP).

On-site alerts vs. remote alerts While almost all devices have alerts for when a pest is found, most devices send remote alerts directly to the PMP. When a pest triggers the sensor-equipped device, an alert sends a text or email to the PMP providing information on when a pest is captured to help determine the root cause of the infestation. The device monitors 24/7, which allows for quicker dispatch to remove or respond to the capture. There is also Bluetooth-based monitoring device systems that provide alerts once the pest management company is on-site. These are short-ranged devices, so the PMP will need to be 30-100 feet from the device. The short-range sensors still provide a time stamp on when the sensor was triggered, but doesn’t provide this information remotely. Both remote and on-site systems have a place in pest management

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programs, as the type of system is dependent on the characteristics and needs of the facility, but the technological advances of these systems still continue. Remote

monitoring manufacturers and Bluetooth-based device manufacturers are working on the use of AI to help identify the pest contacting the sensor. This will allow for PMPs

to determine if it was a pest triggering the sensor or a non-target animal. For example, a device may be able to tell if it is a house mouse or cockroach, however, it cannot decipher between a ground beetle or a cricket.

What does this mean for my facility? New technology can provide enormous benefits, including problem solving, determining the root cause of a problem, a reduction in the frequency needed to service a large number of rodent trap monitors and servicing difficult-to-reach areas that require trapping. The greatest promise comes in the form of integrating pest detection devices with environmental sensors to provide a picture of a facility’s condition and the pest profiles within. As technology continues to evolve, so too will the accuracy and reliability of pest monitoring devices.

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MAY 2020 | FOOD LOGISTICS

4/29/20 2:51 PM

SECTOR REPORTS

TRANSPORTATION BY BRIELLE JAEKEL, ASSOCIATE EDITOR

RAIL AND INTERMODAL POWERS ON DESPITE GLOBAL CRISIS Here’s how rail and intermodal’s critical infrastructure helps deliver essential goods during shelter-in-place orders.

s one of the nation’s oldest forms of shipment, rail has the capacity to move impressive amounts of goods nationwide throughout all hours of the day. While the world has modernized, the rail system is still such an integral part of the food logistics system, even during a world pandemic. While the novel Coronavirus disease (COVID-19) has put a standstill on most of the world’s economy, consumers still need basic goods and agricultural shipments to live. Rail, like many other parts of food logistics, has been categorized as “critical infrastructure,” making companies who operate in this field an essential business. This allows these companies to continue operating despite stay-athome regulations. But, how are intermodal and rail operations able to stay safe and in business throughout a pandemic? The difference is palpable. According to the Association of

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American Railroads (AAR), the industry has put numerous procedures in place to keep workers safe while ensuring the delivery of essential goods. For example, employees are continually screened before shifts for any signs of the COVID-19. For those that do contract the virus and are unable to work, insurance coverage has broadened to allow for testing, telemedicine and assistance to help with the absence from work. Rail and intermodal companies are also limiting group environments, moving meetings to virtual settings instead of in person and forcing any personnel that can to work from home. Many employees are also now permitted to use their personnel vehicles at times when they would previously need to use a work vehicle. “The industry holds daily calls among cross-functional teams to share information and best practices to keep their railroad employees and their families—as well as the larger community—safe,” the AAR said in a statement. “Railroads are also in constant communication with the federal partners at the U.S. Department of Transportation, the Department of Homeland Security and the White

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Tiger Cool Express

House as well as state and local officials on evolving public health developments and efforts to contain the spread of the virus.” While these employees are figuring how to operate in the “New Normal,” like so many others, the sector is seeing an economic slowdown since COVID-19 hit the United Sates. A report from the AAR showed that weekly rail traffic saw a decrease of 11.8% of carloads and intermodal units compared to the same time period last year. However, different sectors throughout the economy are impacted differently. For instance, carloads containing auto parts were down 70% compared to the same week the previous year. But, carloads with chemicals grew by 4.6% and petroleum grew by 3.5%. “No consumer imports means no ISO boxes, which is 50% of rail intermodal volume,” says Theodore Prince, chief strategy officer and co-founder of Tiger Cool Express. “Of the remaining 50%, domestic, probably one-third is LA-Chicago, and of that 80% of the Eastbound is transloaded prior waterborne cargo, which is more volume loss. On the other hand, preponderance of owners and operators are in high risk for COVID-19 and are concerned about entering and exiting hot zones, which is good for intermodal.” Prior to COVID-19, intermodal may have already been experiencing a downturn. The Intermodal Association of North America’s (IANA) Intermodal Market Trends & Statistics report showed that domestic containers fell 2.7 % from 2018, international shipments fell 9.1% and trailers were down 21.4%, which is the

worst the industry has seen since the previous recession. “We haven’t seen full-year declines like these since the 2009 recession. Looser trucking capacity played a role on the domestic side of intermodal, while tariffs and tough comparisons to 2018 volumes affected international,” Joni Casey, president and CEO of IANA said in a statement. “A comeback could be hastened by a number of factors, including further resolution to trade issues, but it’s difﬁcult to predict that timing.”

Modernizing the fleet Like many other sectors of logistics and the cold chain, prior to the pandemic, intermodal was looking to technology to modernize. Visibility has become a necessity throughout all aspects of logistics, but intermodal companies use it to create a more symbiotic relationship between truck and rail. By tapping into electronic logging devices (ELDs), rails can be better prepared for the exact timing that a trucked shipment will arrive. For instance, project44 released an ocean-to-rail intermodal visibility. “Collecting data from trucks is connected by ELDs, telematics and other IoT devices,” Raji Bedi, senior vice president, product management at project44, said in a statement. “Unfortunately, these devices are not present on a majority of containers. project44’s solution is able to produce an IoTlike experience without a physical device within the container and deliver on our promise of end-to-

Tiger Cool Express

end visibility tracking.” Both government agencies and privatelyowned rail systems focus on more than just technological solutions to modernize the rail system—for them it’s about updating the actual fleets and infrastructure. Reducing emissions and improving efficiency are also some of the top priorities for rail operators. The International Railway Association is one of many looking to cut its carbon footprint. In fact, it maintains hopes to cut railway operations by 50% by 2030 and 75% by 2050 and cut final energy consumption by 50% by 2030 and 60% by 2050, relative to a 1990 baseline. Doing so will modernize infrastructure, and fleets can help support this, estimating a 0.3-3% emission reduction in national transport by 2030. In a post-COVID-19 future, it is unsure how the economy and the rail system will move forward. But, companies plan to keep their employees safe, while remaining in operation and eventually future proofing their operations.

○ Refrigerated intermodal units allow food to be transferred easily between trucks and rail.

MAY 2020 | FOOD LOGISTICS

4/28/20 12:29 PM

SOFTWARE & TECHNOLOGY

HOW

SECTOR REPORTS

DELIVERS BETTER LOCATION FOR S

Ed Chao CEO, Polte Corp.

ince the introduction of the U.S. Food and Drug Administration (FDA) Food Safety Modernization Act (FSMA) in January 2011, the transportation industry has been exposed to an endless array of technology solutions to help monitor and manage the perishable food and beverage supply chain. As the FDA moved from a focus of treat-

FOOD LOGISTICS | MAY 2020

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COLD CHAIN ing foodborne illness to preventing it, every step in the supply chain was tasked with maintaining consistent temperature and freshness from the grower or manufacturer to the end consumer. In response to FSMA, transportation companies have now fully adopted electronic logging device (ELD) mandates to monitor many facets of driver, truck and trail-

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er condition and location. GPS has been the go-to standard for tracking large items like trucks and trailers for the past several decades, but with the proliferation of the Internet of Things (IoT), the mindset of what can be tracked is rapidly changing.

The age of IoT Monitoring shipments becomes more complex in a multi-tiered distribution scenario. It is further complicated when a product lot is broken down into smaller shipments, even down to the pallet or carton level, then shipped on a variety of transport modes moving inside warehouses and outside to rail, trucks or barges before reaching the end consumer. Tracking and monitoring these product lots as they move through the cold chain proves challenging when each transport mode may have a different technology platform that relays intelligence from the field. Each platform can provide invaluable amounts of data, but tying these communications

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like GPS, Wi-Fi or Bluetooth is not feasible for tracking individual cases of product, as these cases change modes of transport and are broadly dispersed indoors and outdoors. The manufacturer just needs a simple, secure asset tracking solution that can provide seamless indoor and outdoor coverage at a low cost. The company can turn to specific mobile IoT technologies to tap into existing cellular networks. A mobile IoT asset tracker with years of battery life can be placed onto pallets and into cases of product, allowing for seamless tracking using ubiquitous 4G and 5G cellular networks. Assets can be managed throughout their journey regardless of the product being inside the back of a truck, out on the open road, inside a warehouse or in a retail store. The spirits manufacturer can now gain end-to-end supply chain visibility, leading to superior quality control for the product and continuous supply of stock for retailers.

platforms together in a cohesive manner that yields actionable data can prove to be time-consuming and cost-prohibitive. The proliferation of IoT helps drive simpler and lower cost tracking solutions that can be used across these multitiered distribution channels to track increasingly smaller product shipments. The transportation industry and associated enterprises can leverage mobile IoT networks to connect their millions of devices, plus add a variety of new sensors that provide intelligence not previously captured during cold chain shipments. Some of these new sensors include not only temperature, but also humidity, light sensitivity, velocity, CO2, glass break and more. However, the backbone of sensor data is location. Real-time location data provides contextual intelligence that enables immediate action to rectify a situation before it results in loss of product or productivity, as well as more control to make informed decisions based on exactly where products are in the distribution cycle. The ITU states that 97% of the worldâ&#x20AC;&#x2122;s population lives within reach of a mobile cellular signal. Mobile networks are ideal for providing connectivity for IoT devices, as these network signals reach inside buildings as well as provide outdoor coverage. Mobile IoT is less

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costly, especially for asset tracking where low bandwidth is sufficient for a majority of use cases.

A spirits manufacturer overcomes challenges Imagine a spirits manufacturer is faced with several challenges in tracking millions of cold chain containers of product as the containers travel from the manufacturing floor to the retail store. The manufacturer wants to ensure consistent temperature throughout the entire cold chain, as well as track an individual product lot to ensure freshness, reduce waste and help eliminate loss. With stringent FDA quality controls, the manufacturer could face millions of dollars in fines if not able to locate a specific lot in the event of a recall. A typical product lot encounters up to half a dozen different modes of transport, and many times can be broken down into numerous smaller batches that are then shipped to different distribution locations before reaching the final destination. Simply tracking the truck or the trailer is not adequate in this multi-tiered distribution scenario. The spirits manufacturer desires a more granular approach to tracking assets and capturing critical intelligence as products move through the distribution chain. Using older location technologies

How mobile IoT delivers With new mobile IoT technologies driving the cost of asset tracking down, companies can now track lower-value assets and gain actionable insights that have a real impact on the bottom line. While every company has unique needs and a different use case for asset tracking, be it end-to-end supply chain visibility or loss prevention, one thing they all have in common is the need for simple, low-cost location intelligence that delivers strong ROI. Mobile IoT helps to deliver that.

MAY 2020 | FOOD LOGISTICS

4/28/20 12:12 PM

SECTOR REPORTS

SOFTWARE & TECHNOLOGY

CYBERSECURITY BEST PRACTICES FOR THE

CONNECTED WORLD OF TRUCKING

I Chris Sandberg vice president of information security, Trimble Transportation

The benefits of operating in a more connected ecosystem are abundant, as trucking companies adopt technology and become more connected.

t’s not altogether uncommon to hear about data breaches around consumer brands and electronics, but data security is of special concern to the trucking industry, particularly in light of the widespread implementation of electronic logging devices (ELDs) and the increasing shift toward integrations between solutions providers. As trucking companies have adopted technology and become more connected, the benefits of operating in a more connected ecosystem are abundant, but with these benefits come vulnerabilities, too. Fleets today share their data with more partners and vendors than ever before. These integrations enable a wide variety of insights, capabilities and efficiencies, but can create problems and gaps in security if not shared safely. That’s why it’s so important for fleets to consistently employ and maintain best practices around data privacy and security.

Common cybersecurity threats Any type of company that relies on a connection to the internet is susceptible to hacking , and a carrier is no exception. The most common risk to a trucking company will likely be the back office, where the majority of sensitive information is stored. There are, of course, other more nefarious forms of hacking that might involve a physical asset such as a truck or mobile device, but these are less likely to occur, as

FOOD LOGISTICS | MAY 2020

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there may be little or no monetary incentive to a hacker in doing so. The most common cybersecurity risks that fleets will face include ransomware—malware that locks users out of their system until they pay the hacker—and phishing, or false emails that may trick a user into sending money or divulging private information such as credit card numbers, social security numbers, etc. Most hackers are in the game to make a buck—if they’re able to infiltrate a system, they’re most likely going to search for data that can be sold. This may include personnel data, banking information and more, so it’s important to make sure systems are secure. In recent years, there have also been some examples of corporate hacking in the trucking and transportation industries, where a company breaks into a system in order to steal the names of a fleet’s drivers to more easily recruit them away from their fleet. Or, they may want the names of a carrier’s customers to entice them to switch carriers. Because trucking companies frequently allow outside companies to access their data for a variety of solutions (such as ELD compliance, visibility, maintenance, etc.), these integrations themselves can sometimes become a vulnerability, potentially allowing hackers to access their data if not properly secured and monitored. That said, there are several ways a fleet can protect itself from potential risk.

Trust no one One cybersecurity best practice for fleets is to operate using the “Principle of Least Privilege” (PoLP), meaning users are only granted the minimum access to data necessary to complete a task. Rather than inherently trusting others to protect your company’s data, the PoLP helps control your data and share it sparingly, only as needed. For third-party vendor integrations, this means being selective about who receives your information, ensuring you’re not sharing more data than is necessary and that you’re able to revoke access as soon as the task is complete. This way, you’re never over-sharing information for long periods of time with vendors who may not have the same rigorous cybersecurity standards in place.

Vetting potential partners Because fleets often rely on a wide variety of hardware and software solutions or integrations, it’s of utmost importance to carefully select reputable third-party vendors that will be interacting with your data. When bringing a new partner on board, be sure to find out how they’re using your data, as well as what their own cybersecurity practices are. Set clear terms with integration partners about the length of your engagement and what data you will share with them. A few questions about cybersecurity to ask a potential vendor include: · What are the practices in place to protect your customers’ data? · Who is in charge of setting and maintaining your cybersecurity policies? · Is my fleet’s data being shared with outside sources? If so, how, and why?

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· Do you have any third-party security certiﬁcations, or have you completed any compliance audits, such as System and Organization Controls (SOC)? If the vendor doesn’t provide a clear answer or seems lax with its cybersecurity practices, pay attention to these red ﬂags and consider vetting a different provider instead, whose protocols are more robust and transparent.

Updates are crucial As the value and amount of data in the trucking industry has increased, so has the importance of keeping that data safe. You can’t just implement a cybersecurity policy once and expect your data to be protected indeﬁnitely. It’s key to continue revisiting policies, regularly review who has access to your data and update

procedures according to current best practices. Being careful about how you share your data is essential to the long-term success of your company, so spending more time implementing best practices and vetting partners at the beginning of your relationship is well worth it in the long run.

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MAY 2020 | FOOD LOGISTICS

4/28/20 12:20 PM

SECTOR REPORTS

SOFTWARE & TECHNOLOGY

ADDRESSING CYBERSECURITY VULNERABILITIES IN FRESH &

COLD SUPPLY CHAIN AMID

COVID-19 Sumit Chadha principal, Kearney

Vidisha Suman principal, Kearney

Ben Jakes principal, Kearney

Digital solutions offer significant promise for improving the safety, freshness and efficiency of temperaturecontrolled supply chains.

Fresh food supply chains have seen improvements in infrastructure, technology and ways of working between trading partners, but continue to remain a significant challenge within logistics today. As demonstrated by the Coronavirus disease (COVID-19) crisis, the balance between efficiency, flexibility and resiliency is difficult to get right. That’s because the fresh food supply chains are extremely fragile to outside shocks. Crisis response to supply constraints, product safety and waste has been a continued focus, and many in the industry have pursued digital solutions to improve traceability, visibility, temperature monitoring and speed. While these approaches have driven areas of step change improvement, they also increase the need for a focus on cybersecurity.

Understand the value at risk Maintaining product integrity from farm to plate has always been a primary concern in the industry. Across the fresh value chain, there are high levels of fragmentation and varying levels of sophistication, which make managing risk a challenge. As more of these interactions move to the digital realm, the supply chains will be exposed to cybersecurity threats. Potential risks include combating attacks

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to operational technology that threatens production or food safety, data corruption that can enable food fraud and malicious system attacks leading to financial loss and potential loss of brand equity. These risks exist today, but will increasingly manifest in the future, as more digital capabilities are adopted over a wider scale throughout the value chain. The first step is evaluating the value at risk, ranging from consumer safety, product loss, disruption of operations or financial loss. Quantification of risk, while critical, is not straightforward. The one question to address is, how much risk the organization can afford and still be able to recover to normalcy i.e. acceptable risk threshold. Then tie this to potential exposure points in the value chain, particularly third parties and the level of data and systems access to which they are exposed. By assessing both the likelihood, magnitude and potential sources of cybersecurity risk, companies can develop a strategy to better manage these threats.

Create a culture of cybersecurity With more of the workforce working remotely from home due to the impact of COVID-19, potential exposure routes have increased. Despite the unique dynamics of this crisis, individual employees have

always been the primary frontlines in ensuring cybersecurity. Monitoring VPN trafﬁc and systems activity needs to be complemented with enhanced process governance for the entire organization and third-party players—farmers, freight companies, distributors—to understand threats of cybersecurity to fresh supply chains. Recent cyberattacks have already elevated cybersecurity risk management to C-levels and the board. But, as fresh value chain partners further integrate from a technology standpoint, it needs to become a supply chain and vendor management priority as much as it is business systems priority. Creating this culture from top to bottom is critical to ensuring the safety of fresh supply chains.

Collaborating on solutions Improving cybersecurity within fresh will require collaboration between technology and operations, both internally and with trading partners. First, as value chain leaders look internally, their long-term systems investments should be made both with an eye toward data quality, security as well as operational effectiveness. Designing future state visibility, tracking and collaboration systems will need cybersecurity as a core element vs. an afterthought. Second, when making infrastructure investments such as industrial control systems, third-party providers’ cybersecurity readiness should be a key evaluation criterion. Internet of Things (IoT) solutions is making signiﬁcant improvements through advanced temperature sensors and real-time monitoring, but these systems are only as valuable as they are reliable in the event of a cybersecurity threat. While designing for the future, leaders should recognize they are only as resilient as the weakest link

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to consider integrity of the system to minimize risks of data corruption and fraud. Blockchain is one potential solution that has been experimented with by key players, including the Walmart/IBM pilot in various fresh categories. Regardless of whether the blockchain approach is the longterm solution from a technology standpoint, its vision of data permanence and openness is one the industry can continue to embrace in its ways of working. Growers, pack-

in their supply chain’s digital ecosystem. Many areas of the industry recognize the need for collaboration on digital to ensure success, such as with the Produce Traceability Initiative being driven by various industry associations in North America. Efforts between trading partners to increase visibility need

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ers, manufacturers, distributors, retailers and their logistics partners need to collaborate to identify and address cybersecurity risks across the supply chain. Digital solutions offer signiﬁcant promise for improving the safety, freshness and efﬁciency of temperature-controlled supply chains, but need to be closely managed to ensure cybersecurity does not threaten resiliency. Addressing these challenges effectively requires holistically evaluating potential threats, creating a culture of cybersecurity and collaborating across the supply chain to execute in a secure manner. As we look ahead, disciplined cybersecurity risk management will be foundational in unlocking value of digital supply chains for fresh food players.

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MAY 2020 | FOOD LOGISTICS

4/28/20 6:49 PM

SECTOR REPORTS

Unmitigated, sea level rise will affect ports worldwide and their ability to handle goods in transit throughout the inbound and outbound supply chain network.

○ This map shows different zooms of annual flood risk zones in 2050, and risk zones by water level above the high tide line (measured at Fort Pulaski).

ecent hurricanes have made the evening news look like Hollywood climate apocalypse trailers. Hurricanes show the world what several feet of water in homes and businesses looks like. And, the billions of dollars in damages are staggering. Yet we move on, saying these are random, low-probability, high-impact events. Meanwhile high-probability, relatively low-impact events such as tidal flooding are happening every week along the U.S. coast— sometimes 30 or more times a year at some locations on the East and Gulf coasts. Events like these and the increasing flood frequencies and levels being experienced at the U.S. coast, as well as our reliance on global supply chains, prompt the question: What is the future flood risk to coastal ports on which so many of our supply chains depend? While the tide gauges provide quantified evidence of flood histroy, current and past sea level and the rise in sea level, a peer-reviewed model shows excellent fidelity when run using historical data to provide a probabilistic model for estimating future local flood events. Using data from this model and a proprietary algorithm from Logistix

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PORT & SUPPLY CHAIN RISK FROM FUTURE COASTAL FLOODS

Getty Images

Solutions, which mathematically correlates ﬂooding estimates to port disruptions and lack of availability, the upstream and downstream dependencies on a port like Savannah can be determined, as well as alternative supply chain networks and possible future capital expenditures that can mitigate this risk.

Evaluation technique and analysis The data evaluated future flood risks to ports by analyzing the docks, cargo areas, roads and railway segments that contribute to the operational effectiveness of a port. After all, a port with high and dry docks cannot operate if goods and personnel cannot get in and out of the facility. Actual flood level and tide gauge data reported by National Oceanic and Atmospheric Administration are the basis for future projections of sea level rise and potential flood events. For instance, the

map below show variations of two views—different zooms of annual flood risk zones in 2050 and risk zones by water level above the high tide line (measured at Fort Pulaski). The highest water level recorded at that station was in 2016 (Hurricane Matthew) at 4.95 feet above the high tide line. Also, the projected risk of an annual flood reaching 3 feet above the high tide line in 2020 is 20%. In 2030, that risk rises to 51%. In 2040, it’s 93%. And, in 2050, it’s 100%. The projected risk of an annual flood reaching 5 feet above the high tide line rises to 100% in 2090. Hurricane Matthew-level coastal flooding at the Port of Savannah is projected to be, on average, at least an annual event by then. A proprietary portfolio analysis tool uses location coordinates to look up elevation and sample

Climate Central

Don Bain climate engineer, Climate Central

OCEAN PORTS & CARRIERS

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thousands of potential sea level rise levels (from the probabilistic model) plus local flood history from the nearest tide gauge to estimate the number of expected annual flood events during specific years in the future. These are expected annual flood events in the years 2020, 2030 and so on to year 2100. Locations with 1% annual chance flood values up to 10% annual chance flood values are shown in yellow; those above 10% up to 99% annual chance floods are shown in orange. Values greater than one, representing more than one expected flood event per year, are shown in red. This data can then be converted into port capacity measures for each of the docks, roads and rail elements to estimate the impact on future supply chains while optimizing future networks and using alternative ports and suppliers.

frequent ﬂooding events. And, companies must examine their current supply chains to evaluate their future investment in facilities, transportation and sourcing policies. Using resources like the ones that produced this assessment, supply chain analysts can determine alternatives that must be enacted today to safeguard against future calamities. Investments

today in warehouses, distribution centers, port facilities and transport equipment must be evaluated with major impacts to be felt in the next few years. Potentially dramatic impacts are sure to affect supply chains starting in 2030 with an accelerated pace. But, there is technology and—at least for now—the time to prepare for those impacts.

Here for You Safety. Commitment. Integrity.

Impact of climate change Today’s supply chains are susceptible to innumerable challenges, including supplier disruptions, demand variability, inventory imbalances, competitors, pandemics such as the Coronavirus disease (COVID-19) and in the not so far off future, climate change and sea level rise. Unmitigated, sea level rise will affect ports worldwide and their ability to handle goods in transit throughout the inbound and outbound supply chain network. Disruptions are not only or even primarily due to the sea level rise at the docks themselves, but more so due to ﬂooding of surrounding infrastructure of roads, rail heads and supporting facilities in the vicinity of the ports. All port authorities must develop medium and longer-term plans to deal with this issue, including investment, which will measure in the billions of dollars. By the same measure, companies that import or export products through these ports must plan for the inevitable disruptions caused by more

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MAY 2020 | FOOD LOGISTICS

4/30/20 10:33 AM

FOOD (AND MORE) FOR THOUGHT

The Power of Digital Twins in

TRANSFORMING FOOD MANUFACTURING

Mandy Guiberteau Tague director of business development, Americas, Lanner Group

Among this flourishing of new technologies and the rise of Industry 4.0 is the impact of predictive simulation.

○ When Mars wanted to drive efficiencies across its business without compromising the quality of products within its local markets, digital twins was the logical technology of choice.

uicker. Faster. Better. Today’s 21st century technology developments are geared up to deliver industry-wide advances more transformative than the last. But, what assurances are there that these all-new advances will work in the real world? Where do the key opportunities exist within food and beverage manufacturing, and where do the potential bumps in the road lie? From augmentation and 3D printing to 5G and robotics-as-a-service, new technologies are shaping sectors as companies come under increasing pressure to meet consumer demand, safety and industry guidelines with greater efﬁciency. Among this ﬂourishing of new technologies and the rise of Industry 4.0 is the impact of predictive simulation. That’s why digital twins have a profound advancement in how companies manage risk and growth.

Lanner Group

value and unprecedented insight.

Putting those ‘what ifs?’ to the virtual test Digital twins enable food and beverage manufacturers to model their production processes within a virtual environment whereby you can test, experiment and trial new solutions or ways of operation. They work by replicating real-life scenarios, such as existing machines or plant lines, which can then be continuously tested, highlighting opportunities for improvement. They’re so advanced that it’s possible to test conﬁgurations on virtual production lines before physical lines have even been built. Being able to ask all of the “what if?” questions allows companies to understand the future impact and consequence of each scenario, without incurring any risks in terms of costs or brand reputation. This foresight can prove invaluable to all business planning cycles.

New processes = new risks

Real life food for thought

With more and more manufacturers under pressure to innovate and meet efficiency and performance targets, new processes inevitably involve multiple unknowns that can be difficult to predict and costly and time consuming to perfect the first time. Historically, static modeling has helped in certain areas, but with the increased demand to innovate, predictive digital twins offer more dynamic and intelligent ways of modeling all stages of the manufacturing process and creating business

When Mars Inc. wanted to drive efﬁciencies across its business without compromising the quality of products within its local markets, digital twins was the logical technology of choice. At the time, it had almost three dozen product lines running across six sites in the United States. Each site involved complex internal supply chain pressures generated by varied chocolate-making capabilities, multiple chocolate types and varying product mix and consumer demands. Initial work revealed that the

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scale, complexities and interdependencies involved would require modeling capabilities more sophisticated than the company’s existing spreadsheet-based capacity planning systems. A simulation model predicted Mars’ supply chain performance based on the above variables. This provided Mars with insight into its existing and planned future operations, enabled it to identify current risks throughout the supply chain and highlight opportunities for cost savings and performance improvements. In turn, this meant Mars had the necessary foresight to develop business cases for new facilities and justify investments in its chocolate-making capacities, which enabled the company to make the right decisions at the right time.

The future appetite for digital twins The world of food manufacturing is rapidly evolving to adapt to the challenges and opportunities that Industry 4.0 presents. Technological developments are inevitable, but so too are risks, unforeseen challenges and multiple “what ifs?” Digital twins offer food manufacturers the potential to plan their futures with clarity and make the right decisions quickly with minimum hassle or impact to production outputs and supply chains. This leads to smarter risk-free business decisions and drives higher returns on investments, as discovered by Mars.

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THE ROAD AHEAD IS PAVED WITH POSSIBILITIES. Since day one, we’ve been on a relentless pursuit of greatness. As a leader in transportation solutions—including trailers, parts, and specialty services— we’re improving business for our customer by continuously planning for what’s ahead.

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