Food Logistics May 2021 by Supply+Demand Chain/Food Logistics

CANNABIS OVER STATE LINES

WEARABLES

RAIL & INTERMODAL

OVERCOMING CANAL CRISES How supply chain visibility helps today’s ocean carriers see disruptions ahead.

Issue No. 224 May 2021

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ON THE MENU

May 2021 ISSUE NO. 224 COLUMNS FOR STARTERS

04 There Will Always be

Supply Chain Disruptions Editor-in-chief Marina Mayer says supply chain disruptions will continue to happen when you least expect it.

DEPARTMENTS 06 Field To Fork COVER STORY

Overcoming Canal Crises Industry experts detail how supply chain visibility helps today’s ocean carriers forecast—and prepare for—future disruptions.

10 Food on the Move 42 Ad Index www.FoodLogistics.com

3PL / COLD CHAIN

WAREHOUSING

TRANSPORTATION

Transportation 22 Cannabis Has Surprising

Space 26 Flexible Warehousing for the Cold

5 Trends 27 Top Driving Rail Forward

3PLs transporting cannabis need to be armed with knowledge on regulations.

CBRE outlines six trends impacting the cold storage market.

After years of status quo, technology, innovation and sustainability are driving the rail industry forward.

SOFTWARE & TECHNOLOGY

PACKAGING

FOOD SAFETY

Help Solve 32 Wearables Accuracy, Efficiency

and Sanitization How to Onboard 40 Digitizing 36 Automation Drive Case Packing Trends Suppliers to Future-Proof

Requirements for 3PLs

Challenges in Food Logistics

The growing demands of e-commerce require increased track and trace.

Storage Market

Case packing in the cold chain is dominated by automation and sanitation.

Food Safety Strategies

FoodLogiQ explains the importance of digitizing how to onboard suppliers.

WEB EXCLUSIVES Supply Chain Network

The L.I.N.K. to Global

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foodlogistics.com/podcasts

Virtual Summit

Supply Chain Intelligence

Food Editors Stream Live on Social Media foodlogistics.com/videos/link-live

Published and copyrighted 2021 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

THERE WILL ALWAYS BE SUPPLY CHAIN

DISRUPTIONS I Marina Mayer Editor-In-Chief

t was March 23 when a stranded Evergreen container ship blocked navigation in Egypt’s Suez Canal. The 224,000-ton ship named EVER GIVEN, said to be the largest ship in the world, remained stuck, so to speak, for six days, creating the largest supply chain disruption in 2021 to date. Once freed, it was back to regularly scheduled programming, but here we are, in May, still talking about the ramifications from this disruption. That’s because disruptions of this magnitude don’t just disrupt supply chains; they disrupt all fashions of how companies do business, creating a domino effect that can sometimes take weeks or months to return to normal. Whatever that normal is. ClearPrism reports the canal blockage will affect approximately 25% of the U.S. gross domestic product (GDP) value, and the ripple effect will impact another 15%. But, at the end of the day, this disruption serves as a wakeup call to the supply chain industry that 1. disruptions still and will continue to happen, and 2. if you don’t

have a supply chain plan in place now, you better fix that. Now. I interviewed several ports and ocean carriers for this issue’s

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cover story (page 16) and the common theme between all of their responses is that supply chain disruptions will never go away. They will never stop. They will always be there to disrupt the way companies transport cold foods, or the way they store temperature-controlled products. Supply chain disruptions will happen when you least expect it, and could be catastrophic to your company if the proper measurements and plans aren’t in place. It’s how your company reacts to these disruptions that makes or breaks your ability to overcome and succeed. It’s your company’s ability to implement the necessary technology and solutions that aid in supply chain planning and risk mitigation. It’s the ability to embrace change and update your internal processes to ensure people, products and plants are safe and efficient. I know for me, something small like showing up late to a meeting can throw off and disrupt my entire day. That’s just a meeting. Don’t let disruptions of larger magnitudes throw off how you conduct business. There will always be supply chain disruptions. So, plan accordingly. Want to learn more? Register for our SCN Summit: State of the Supply Chain week, June 7-11, with live video presentations from leading industry experts discussing workforce development, food safety, procurement, risk management, warehousing and transportation. Register now: https://foodl.me/l7bphk.

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AC Business Media Chief Executive Officer Ron Spink 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 2021 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.

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FIELD TO FORK

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

ORBIS Integrates Sustainability into Top Frame Plastic

stock.adobe.com

Cold Chain Logistics Market to Reach $585.1B by 2027 A report by Allied Market Research found that the global cold chain logistics market is expected to reach $585.10 billion by 2027, growing at a CAGR of close to 18% over the next six years. The market across Latin America, Middle East and Africa is anticipated to register the highest CAGR of 22.0% during the forecast period. However, the market across Asia-Paciﬁc is estimated to hold the lion’s share during the forecast period. “Increase in refrigerated warehouses, adoption of automated software and growth of processed food industry and pharmaceutical sector have boosted the growth of the global cold chain logistics market. However, dearth of standardization and high operational costs hamper the market growth. On the contrary, advent of RFID technology is expected to open lucrative opportunities for the market players in the future,” says Lalit Katare, research analyst, automotive and transportation at Allied Market Research. Read more: https://foodl.me/fv7dey

ORBIS Corporation designed a new plastic top frame packaging product to unitize full pallet loads of rigid packaging such as beverage products, which then combines into larger, more stable unit loads. The idea is to create a more convenient method of handling, shipping ORBIS and storage. Apart from its sustainable and protective advantages, this top frame improves the efﬁciency of any supply chain with features such as a consistent weight for accurate transportation costs and compatibility with palletizing and depalletizing equipment. Operations can optimize this new high-pressure top frame by pairing it with a pallet and divider sheet for a full solution, reinforcing ORBIS as a one-stop shop for every transportation and storage need in the food and beverage industry. Read more: https://foodl.me/pkvn63

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C.H. Robinson’s Emissions IQ Aims to Advance Sustainability in Logistics

C.H. Robinson

C.H. Robinson released Emissions IQ, what is said to be the first free, self-serve tool to instantly show a company’s carbon emissions across all forms of transportation globally. C.H. Robinson collaborated with MIT and the U.S. Environmental Protection Agency (EPA) to provide a tool that standardizes the way companies measure the emissions of their partial truckloads. In its pilot phase, Emissions IQ has already helped 125 companies reduce their carbon emissions by a total of 350,000 metric tons of CO2 equivalents. “You can only change what you can measure,” says C.H. Robinson chief sustainability officer Angie Freeman. “Even companies committed to sustainability have struggled to capture their emissions across complex, multi-faceted supply chains. By putting useful technology and data at their fingertips, we’re not only increasing the transparency of emissions in our industry, but we’re surfacing the best strategies for customers to make meaningful carbon reductions right now.” Read now: https://foodl.me/73gs6d

M&M Carnot Reveals New CDU Product Line

M&M Carnot

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M&M Carnot added a new line of CO2 air-cooled condensing unites (CDUs) named Aquilon DS to extend its refrigeration product offerings. The company says the new line supports its commitment to environmentally safe product with natural refrigerants. The high-pressure-designed Aquilon DS product line includes fully welded stainless-steel piping, high-pressure compressors and system components as standard. All Aquilon DS CDUs have fully integrated air-cooled condenser/gas coolers with an option for adiabatic. The Aquilon DS CDUs also provide EC fans, VFD compressor drives, liquid sub-coolers and Sensible hot-gas defrost. Optional energy efﬁciency features include heat recovery and free cooling. Read more: https://foodl.me/4xeyv4

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FIELD TO FORK

Daily Updates at FoodLogistics.com

Elemica’s OmPrompt Acquisition to Strengthen Supply Chain Automation Elemica acquired OmPrompt, a UK-based technology company focused on helping businesses automate, streamline and optimize supply chain processes and documentation management. OmPrompt’s proprietary algorithms, machine learning, artificial intelligence and other tools will contribute to Elemica’s continued development and aggregation of automation technologies for the consumer packaged goods, logistics, food and beverage markets, among others. “It’s important that we’re continuously adding to our functionality and platform strengths,” says Elemica CEO David Muse. “Through market-leading innovation and strategic acquisitions like OmPrompt, current and future clients should be confident that we are the premier technology provider to help them exceed digitization targets. We can take them as far as their strategy dictates.” Read more: https://foodl.me/c3maxt

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Toyota Material Handling Reduces Repetitive Tasks for Humans

Green Life Farms to Build New Hydroponic Greenhouse in Florida C.H. Robinson

Green Life Farms is constructing its second hydroponic greenhouse in Lake City, Fla. The 24-acre parcel of land will house state-of-the-art hydroponic technology that will grow leafy greens in oxygenated water without soil, and Green Life Farms will then harvest and package in a controlled environment. This reduces risk of contamination and preserves flavor and freshness. The facility is expected to be operational in early 2022. “Following our very successful launch in South Florida, we are proud to announce this new facility to serve North Central Florida—the Jacksonville, Gainesville, and Tallahassee regions,” says Forrest Sawlaw, COO, Green Life Farms. “In light of ongoing food safety concerns across the country, now more than ever, customers are looking for locally grown, clean produce. Our innovative hydroponic technology will deliver the cleanest and freshest leafy greens, all free from GMOs, pesticides and contaminants.” The greenhouse will produce 18 harvests each year, using 90% less water than traditional farming. Within a few days of harvest, customers will receive their produce locally. Read more: https://foodl.me/ztg8g6 Deyan Georgiev - stock.adobe.com

Toyota Material Handling

Toyota Material Handling releases what it calls the Mouse and Mole, which are automated guided carts (AGCs) designed to cut down on repetitive tasks in the warehousing space while producing dependable outcomes in an efficient manner. The material handling manufacturer focused on driving down installation time and creating versatility in the AGCs while providing a fully customizable automated process. Prior to installation, Toyota personnel works with operations managers of the warehouse locations to map out the most efficient delivery routes to maximize productivity from the AGCs. The new Mouse and Mole AGCs are available in six models with capacities of up to 4,400 pounds. Both automated carts operate using wireless connectivity and state-of-the-art navigation technology, keeping the AGCs on task. High-strength magnetic tape guidance provides simple, quick installation while minimizing the likelihood of interference from magnetic fields. Laser obstacle scanners with 15 programmable views and unique RFID markers help ensure reliable performance for minimal down time and disruption. Read more: https://foodl.me/u8puvb

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NEWS FROM ACROSS THE FOOD SUPPLY CHAIN

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MAY 2021 | FOOD LOGISTICS

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FIELD TO FORK

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

AppHarvest Secures Root AI to Increase Harvest Support

IAM Robotics

AppHarvest acquired Root AI, providing the company with a baseline of harvesting support and crop care specialists. With the acquisition, AppHarvest will now have the data the robots can collect as they harvest to evaluate crop health and optimize overall operations of the facility. “Farming as we’ve known it is broken because of the increasing number of variables such as extreme weather, droughts, ﬁre and contamination by animals that make our food system unreliable. Indoor farming solves for many of those challenges, and the data gathered can exponentially deliver more insights that help us predict and control crop quality and yield,” says AppHarvest founder and CEO Jonathan Webb. “One of the key challenges in agriculture is accurately predicting yield. Many downstream decisions from work scheduling to transportation to retail planning are based on that. Any deviation between projection and actual yield can result in ﬁre drills for numerous functions to adjust for the change, and AI can help solve for that.” By gathering more data through AI, growers will be enabled to use real-time information to improve sustainable efforts and help indoor farms grow pesticide-free fruits and vegetables. Read more: https://foodl.me/wpr9cc

IAM Robotics Introduces New Autonomous Mobile Robot

ipopba - Robotics Controls

IAM Robotics introduced Bolt, an autonomous mobile robot (AMR) that’s completely autonomous, operates for up to 20 hours on a single charge and is compatible with conveyor and material handling systems. Bolt features hot-swappable battery 3.5 times the size of similar AMRs, 660-pound payload capacity, a 360-degree field of vision for warehouse safety and is flexible with various top modules. “When we built our AMR, we thought, ‘How can we make this the most powerful, flexible and collaborative solution?’ The result is Bolt, which expands on our AMMR, Swift, by turning its base into a standalone AMR. We applied what we learned with Swift, honing in on battery power and direct-drive wheels to ensure Bolt has the power to operate safely and efficiently—even with top modules attached,” says Tom Galuzzo, founder and CEO of IAM Robotics. “Bolt is already opening new doors for IAM Robotics, and it introduces us to a faster-growing market with general AMRs, which is so exciting to be part of.” Read more: https://foodl.me/wxyaep

A M King Constructs New Cold Storage Facility in South Texas

@serphoto - adobe.stock.com

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A M King is constructing a new 45,590-square-foot distribution center for GAB Operations in Laredo, Texas. The new facility will provide increased cold storage capacity for fresh produce, serving as a hub for GAB’s U.S. and Canadian customers. The space is aimed to be completed by October. The new facility will include designated spaces for truck drivers and dock employees to help create a single ﬂow through the space. “We’re happy to be working with another prominent produce company in Laredo,” says Dan Crist, A M King VP. “Our food industry expertise, coupled with our track record of successfully completed cold storage and distribution facilities, places us in a great position to design and build this project and serve as a resource for a new international client.” Read more: https://foodl.me/dgr5wm

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FOOD ON THE MOVE

LOGISTICS TRENDS IN THE INDUSTRY Daily Updates at FoodLogistics.com

U.S. Ports to See Infrastructure Improvements with New Funding Program

Kalyakan

The U.S. Department of Transportation’s Maritime Administration looks to transform the nation’s infrastructure in logistics with a new grant program that will provide $230 million to modernize ports. This new program looks to increase jobs and introduce technology into the nation’s ports to improve the U.S. logistics industry. The news follows a series of recent intramodal announcements, suggesting a renaissance for the rail industry. “Our nation’s ports are a key part of our critical infrastructure. They create jobs and make our economy more resilient and sustainable,” says U.S. Secretary of Transportation Pete Buttigieg. “This funding will build upon local investments in infrastructure to deliver long-term economic beneﬁts to American workers and communities, while also addressing climate and equity.” Read more: https://foodl.me/rur3by

Intellishift

Three in five respondents to IntelliShift’s survey say having access to real-time, non-siloed data is their No. 1 priority, while 86% noted that access to non-siloed data has provided deep insights for their organization, drastically improving operations. Additional priorities identified as critical are ease of use and/or implementation (55%) and leveraging a unified, all-in-one platform (40%). Cost reduction and resource management of people and/or assets rose, ranking 45% and 38% respectively, followed by increased monetization of vehicles and assets (30%), connecting operations processes (20%) and business intelligence (17%). “Access to on-demand data and end-to-end operational intelligence is critical, particularly in an industry where assets are constantly on the move,” says Ryan Wilkinson, chief technology officer, IntelliShift. “As we’ve seen with our customers, gaining these actionable insights through the right technology platform can increase agility and speed. It also sets the foundation for intelligently predicting and optimizing business performance, as well as understanding how individual and departmental KPIs ladder up to create a winning organization.” Read more: https://foodl.me/kb8s59

The International Association of Refrigerated Warehouses (IARW) and Associação Brasileira da Indústria de Armazenagem Frigoriﬁcada (ABIAF) formed a joint venture, creating the newly named GCCA Brazil. The objective of GCCA Brazil is to deliver services, resources and programs that will add value to all Brazilian cold chain businesses and to build upon the legacy that ABIAF has created over the years. “The incorporation of ABIAF by GCCA represents a great achievement for the Brazilian cold chain,” says Francisco Moura, SuperFrio CEO and IARW board member. “Despite the great job ABIAF’s founders and directors made over time, now Brazilian cold storage companies will be totally inserted in the global environment, with resources and tools to grow even more our industry.” kokliang1981

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Brazil Cold Chain Sees Connection to Global Resources Through Merger

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Survey Reveals Access to On-Demand Data and End-to-End Intelligence is Critical

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Read more: https://foodl.me/nnynch

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FOOD ON THE MOVE

LOGISTICS TRENDS IN THE INDUSTRY

Daily Updates at FoodLogistics.com

Georgia Ports Authority to Increase Port of Savannah’s Container Capacity by 20% The Georgia Ports Authority (GPA) announced plans to increase the Port of Savannah’s container capacity by 20%. “Right now, we are moving container volumes that we did not expect to see for another four years,” says GPA executive director Griff Lynch. “Our employees are working very hard to ensure we continue to provide our customers with world-class service. Additionally, we are expediting capacity projects that will increase the speed and ﬂuidity of cargo handling at the Port of Savannah.” The terminal enhancement, dubbed the Peak Capacity project, will establish 2,100 new grounded container slots and add 650,000 twenty-foot equivalent container units (TEUs) of annual container yard capacity in two phases, with the ﬁrst opening in September. GPA also approved a Berth 1 renovation designed to increase berth capacity by an The Port of Long Beach is a vital link in the nation’s estimated 1 million TEUs per year by June supply chain. Operational excellence and innovation 2023. make us the Port of Choice. Read more: https://foodl.me/phn4pr Georgia Ports Authority

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Moving the Economy

Container Shipping Sees Greater Visibility Through New Platform NEXT Trucking releases its Shipper Portal, which is said to reduce manual labor throughout the shipping process and provide real-time visibility access to a container’s journey. Giving shippers full control over their freight, the new platform provides automated real-time shipment track and trace from vessel to termination, customizable reporting, scheduling capabilities, automated leveraging of at-risk containers and a comprehensive dashboard with container ETAs, last free day, per diem, demurrage and more. Read more: https://foodl.me/d7vv8p

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MAY 2021 | FOOD LOGISTICS

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FOOD ON THE MOVE

LOGISTICS TRENDS IN THE INDUSTRY Daily Updates at FoodLogistics.com

Forklift Truck Sales Lag in 2020

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Sales of forklift trucks in the North American market were down in 2020 compared to 2019, partially declining due to the impact of the COVID-19 pandemic. However, truck sales declined 5.1% compared to the previous year. Despite that, 2021 ﬁrst-quarter numbers remain healthy. “The industrial truck industry had its third best year on record in 2019, and the sales decrease in 2020 with COVID-19 was not unexpected,” says Jay Gusler, chairman of the board of directors for the Industrial Truck Association and EVP operations for Mitsubishi Logisnext Americas Group. “Our industry performed well throughout the pandemic thanks to the essential nature of our products and the dedicated associates in our industry.” Read more: https://foodl.me/dncrs8

Hapag-Lloyd Reduces Sulphur Oxides by 70%

Hapag-Lloyd

Hapag-LLoyd revealed that in the past year, it has reduced sulphur oxides by 70% and optimized its ships for additional fuel savings. The ocean freight company does so by investing in innovative ships for new propulsion concepts and ways to keep employees safe. Fuel savings of around 15% were achieved on 39 vessels by removing fouling from their outer hulls. At the same time, Hapag-Lloyd is said to be the ﬁrst shipping company in the world to convert a large container ship to dual-fuel propulsion, which can operate using liqueﬁed natural gas (LNG). Read more: https://foodl.me/vgw6hc

E2Open, Dun & Bradstreet Report Analyzes Suez Canal Ripple Effect

@enanuchit - stock.adobe.com

Even though the EVER GIVEN vessel was freed from blocking the Suez Canal, the ripple effect of its lodging will have continued ramiﬁcations for global supply chains in the weeks to come as global trade resumes, goods start to be unloaded at destination ports and suppliers look to replenish shortfalls in essential materials that threatened downstream production and manufacturing of consumer goods, according to a report published by E2Open and Dun & Bradstreet. Using proprietary supply chain and shipping data, the team found that Europe is the region that will feel the strongest impact due to the blockage of the canal. Companies located in Asia will be impacted by the delay of shipments from Europe, but also by a shortage of empty containers returning to their region. “The disaster of the moment becomes a global phenomenon because it is yet another reminder of the interconnectedness that comes with globalization and our reliance of each other as contributors to the global supply chain. Companies have developed a higher level of dependency on suppliers and third parties from other countries, and that dependency is highlighted when a link in the supply chain is impacted. The Suez Canal incident gives us yet another reason for businesses to invest in data and technology to create an agile, geographically dispersed supply chain that can quickly pivot during unexpected events,” says Brian Alster, general manager, third-party risk and compliance, Dun & Bradstreet. Read more: https://foodl.me/b5w9pe

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FARM

THIRD PARTY PACKAGING/DISTRIBUTION

TRUCK TRAILER

As a result of COVID-19, the adoption of grocery and meal kit delivery services has rapidly increased and the online grocery delivery and pickup market is ﬁve times larger than a year ago. Whether you want to get your home delivery service oﬀ the ground or need to expand, there are four key things to consider: • Vehicle selection, insulation, and shelving

• Refrigeration unit selection

• Food safety best practices

• Technology advances

The number of active home delivery customers has grown from

16.1M in 2019 to 37.5M in 2020

The number of online grocery delivery & pickup numbers has increased from

16.1M in 2019 to 59.5M in 2020

Vehicle Selection, Insulation, and Shelving These selections are vital to your business. 1. Vehicle size. Determine weight and volume of products, number of deliveries per day, and ease of parking or maneuvering during delivery. 2. Insulation. Type and thickness should be based on the products being hauled. Hapag-Lloyd

3. Shelving. When upﬁtting your vehicle, consider the importance of storing products properly and ease of loading and unloading.

Refrigeration Unit Selection Not every refrigeration unit will work well for every application. Having the unit with the right capabilities on your delivery vehicle will ensure safe, on-time delivery.

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POSITION YOUR BUSINESS FOR SUCCESS IN GROWING HOME DELIVERY MARKET

SMALL TRUCK OR DELIVERY VAN

Food Safety Best Practices When it comes to home delivery, the safe transportation of refrigerated foods is of the highest priority. Here are some areas where best practices should be followed: • Packaging and staging

• Proper airﬂow

• Pre-cooling the vehicle

• Delivery procedures

Each year,

1 6 in

people in the US get sick from food borne illnesses**

• Telematics for temp monitoring and compliance

Home Delivery and the Future As more consumers move toward the adoption of home delivery services, Thermo King has products and services that can help you safely transport products throughout the cold chain.

thermoking.com/homedelivery LONG HAUL Precedent® Series • SLXi Series Temperatures: -30°F+

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TRACEABILITY TracKing® Telematics

DELIVERY T-90 Series • B-Series • V-Series Temperatures: -20°F+

* https://www.brickmeetsclick.com/tracking-online-grocery-s-growth** https://www.cdc.gov/foodsafety/index.html

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COVER STORY

BY MARINA MAYER, EDITOR-IN-CHIEF

OVERCOMING CANAL CRISES How supply chain visibility helps today’s ocean carriers forecast —and prepare for—future disruptions.

A stranded Evergreen container ship blocked navigation in Egypt’s Suez Canal for six days, creating months of supply chain bottlenecks.

n March 23, a stranded Evergreen container ship blocked navigation in Egypt’s Suez Canal. Experts claimed a lack of visibility forced the 224,000-ton ship named EVER GIVEN, said to be the largest ship in the world, to run adrift and tip on its side while en-route to China, creating the largest supply chain disruption in 2021 to date. Six days later, after hours of digging, tugging and pulling, the around-the-clock international effort eventually freed the massive vessel and re-opened the shipping lane. “This incident has brought to center stage the importance of global shipping to daily life and the delicate nature of the global supply chain it underpins,” according to a statement from Guy Platten, secretary general of the International Chamber of Shipping. “An estimated 12% of global trade passes through the Suez Canal, comprising of more than 1 billion tons of goods each year. This includes the majority of trade between Asia and Europe. I am relieved that goods like food, fuel, vital medical equipment and PPE will begin to move freely once again.” While the re-opening of the Suez Canal sent cheers and celebrations around the world, it also set the stage for what has now become a domino effect of supply chain disruptions.

Think container ships already re-routed are now ﬁnding their way back. Think goods that expired that had to be tossed. Think suppliers replenishing their inventory from other areas. With more than 1.9 million twenty-foot equivalent units (TEUs) of capacity involved in the incident, project44 warns shippers that their headaches are not over yet. “The Suez Canal incident brings home the message that shippers must be prepared for unexpected disruptions in their supply chain. With real-time visibility and advanced alerting capabilities, disruptions as well as the ability to form strategies to avoid them, are more manageable than ever before,” says Josh Brazil, VP marketing, project44. At major ports such as Singapore, for instance, more than 370,000 TEU of capacity are en-route to the port, where 83 vessels representing 299,310 TEUs were already at the port or anchored and waiting to unload as of April 12. The picture is similar at Rotterdam, where 15 ships representing 196,600 TEUs arrived that next week, lining up behind 85 ships already at the port or waiting to enter. According to project44’s port delay tracking, the inﬂux of ships will also exacerbate port delays measured in days.

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size and scale of the vessels have in some instances outpaced shore side and physical infrastructure. That’s going to take time and capital to correct and catch up and that work is well underway,” says Bob Sappio, CEO, SeaCube Containers. That’s why E2Open and Dun & Bradstreet partnered to provide insight as to how global businesses will be impacted by this blockage. Using proprietary supply chain and shipping data, the team found that Europe is the region that will feel the strongest impact, and companies in Asia will be impacted by the delay of shipments from Europe, but also by a shortage of empty containers returning to their region. Grocery stores, general warehousing and storage and trucking were among the Top 10 industries most impacted by this incident. “The disaster of the moment becomes a global phenomenon because it is yet another reminder of the interconnectedness that comes with globalization and our reliance of each other as contributors to the global supply chain. Companies have developed a higher level of dependency on suppliers and third parties from other countries, and that dependency is highlighted when a link in the supply chain is impacted. The Suez Canal incident

CEVA Logistics

Sievers, VP, global customer success for Slync. “Egypt’s Suez Canal handles about 10% of international maritime trade and is one of the world’s busiest waterways, providing a crucial link for oil, natural gas and cargo shipping between the Atlantic Ocean and the Pacific Ocean,” according to Aljazeera. com. Shortly after the EVER GIVEN’s release, more than 350 vessels were already backed up on both ends, and more re-routed to other pathways, according to the Suez Canal Authority. ClearPrism reports the canal blockage will affect approximately 25% of the U.S. gross domestic product (GDP) value, and the ripple effect will impact another 15%. The disruption is a wake-up call for those companies who rely on supply chains to be error-free at all times. “Unforeseen, disruptive events like the Suez Canal blockage are unfortunately part and parcel of today’s modern world— supply chains cannot avoid them. The problem is their fragility and vulnerability. The key with the Suez situation is the ability for the cargo ships behind EVER GIVEN Now, as of press time, the EVER GIVEN to make decisions and forecast outcomes. can’t even leave the Suez Canal until its ‘What is the impact to my end customer owners pay $1 billion in compensation for if this is longer than two days?’ ‘What the supply chain disruptions it created, additional costs will we incur by re-routing according to officials. via the Cape?’ ‘Is there a weather event on That’s because disruptions of this the alternative route that would mean we magnitude don’t just disrupt supply would be better to stay put for longer and chains; they disrupt all fashions of how see this through?’ The outcomes can impact companies do business and have continued cost, service, waste and time, all expensive ramifications in the weeks to come as commodities, so the right decisions need global trade resumes. Up to 80% of industrial and consumption to be made by scenario modeling the drivers in real time,” says Ian Stone, CEO of goods move in containers, says Nikolaus Vuealta. This isn’t the first time large vessels ran aground in the Suez Canal. “The ocean carriers have built bigger vessels to gain scale economies, basically to move more containers across the globe at a lower and more efficient cost-per-slot mile. Shippers demand lower prices, the carriers cannot Technology, customer service and contingency plans allow shipping companies to improvise, overcome and adapt to supply control price, but they can control cost. However, the chain disruptions.

The initial COVID-19 impact led to “blank sailings,” or reduced rotations of vessels, simply because the demand out of Asian markets shrunk so quickly.

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DHL

COVER STORY continued

myDHLi is said to be the only fully integrated online platform for freight forwarding customers.

gives us yet another reason for businesses to invest in data and technology to create an agile, geographically dispersed supply chain that can quickly pivot during unexpected events,” says Brian Alster, general manager, third-party risk and compliance, Dun & Bradstreet. But, prior to the EVER GIVEN disruption was the global disruption that is the Coronavirus disease (COVID-19). Despite the world being on lockdown, U.S. ports remained open and continued moving product in and out. That’s also not to say U.S. ports and ocean carriers didn’t have their own sets of challenges as a result of COVID-19. One such challenge remains the transformation of the supply-demand model. “The initial COVID-19 impact led necessarily to ‘blank sailings,’ or reduced rotations of vessels, simply because the demand out of Asian markets shrunk so quickly. The result was a controlled market that enabled carriers to re-introduce capacity as it was required,” says Josh Bowen, SVP ocean freight North America, CEVA Logistics. “This pivot meant there was never a deﬁcit situation in the supply and demand relationship. What could not have been envisioned is that the American consumer would take the disposable income not being spent on services and so quickly re-deploy it to product segments, which are seeing a boom of historic levels across numerous product categories.

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This is a truly unprecedented, COVID-19only impact.” Maintaining proper temperature controls also continues to be one of the biggest challenges with shipping cold food and beverage cargo. “It’s an issue because there are so many reasons why keeping steady temperatures can become difficult. Anything from breakdowns, power outages, fires or even blockages on key shipping routes—as we recently saw when the EVER GIVEN became lodged in the Suez Canal—can present an issue,” says Mike Burke, field practice lead, ocean marine underwriting, Travelers. “In a circumstance like this, a ship can lose power, which may cause temperature-sensitive food or beverages onboard to spoil. The EVER GIVEN’s situation may have affected cargo on other ships as well, as it caused major traffic delays on the canal.” Another challenge for ocean carriers is creating efficiencies by shipping larger quantities of cargo on bigger ships. “While this approach can save time, fuel and labor costs, it can also lead to larger losses if something does go wrong,” Burke adds. “The good news is that there are ways for shippers and ocean carriers to reduce these risks. Temperatures can be monitored by using multiple recording devices throughout each container, which can help create a record of temperature consistency during the voyage. If a shipper is only

using a single device, it’s best to locate it in the center of the container because temperatures can fluctuate. Having a reading from the middle can provide a better indication of the temperature maintained throughout the container.” The other problem facing the shipping industry is the shortages of containers themselves, says Robert Handfield, executive director of the Supply Chain Resource Cooperative and the Bank of America University Distinguished Professor of Supply Chain Management in North Carolina State University’s Poole College of Management. “China is sending out a lot more exports to the U.S. and Europe than the other way around. Its economy bounced back faster, as the virus situation within its borders was basically under control by the second quarter of last year. As a result, containers are stuck in the West when they are really needed in Asia. So, ships are literally milling around in Chinese harbors because they can’t be loaded because there aren’t enough containers to pack the shipments in. This is causing massive bottlenecks, and shipping costs have gone up by 264%,” adds Handfield.

End-to-end visibility helps companies “see” ahead

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COVID-19 was a catalyst for technology change, prompting many companies to fasttrack the development and deployment of several technology solutions, including blockchain, artiﬁcial intelligence (AI), machine learning, digital twins and more. “Many things are involved in moving shipments around the world, but digitalization deﬁnitely has the potential to not only make it easier, but also faster and leaner,” says Goetz Alebrand, SVP head of ocean freight, Americas, DHL Global Forwarding. In fact, 42.9% of survey respondents have invested in Internet of Things (IoT) to achieve supply chain optimization in transportation, followed by automation, AI and robotics, according to a poll presented during Food Logistics’ SCN Summit: Transportation session. [To learn more, go to https://foodl.me/wc9bwx]. That’s why DHL invested in myDHLi, what is said to be the only fully integrated

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online platform for freight forwarders. “[myDHLi] provides completely transparent management of freight rates, offers, transport modes, carbon emissions and all other relevant shipment data,” says Alebrand. “The highly intuitive user interface makes it easy to use and ensure that customers have all relevant information at hand. Reflecting already well-established social media functions like follow and share, relevant information can be easily accessed across organizations and trading partners. And, customers experience superior online services for full shipment visibility and control in one platform.” The Suez Canal blockage further reinforced the need for supply chain technology that allows stakeholders to plan routes, prompt end-to-end tracking of shipments and make real-time adjustments during the shipment lifecycle as challenges and opportunities arise, according to Glenn Jones, global VP of product strategy and marketing, Blume Global. Blume Global’s VIP Terminal Services provides the supply chain technology for dray carriers to retrieve customers’ cargo quickly and more predictably, adds Jones. “Blume Global is helping remove $1

trillion of waste from the global supply chain, making logistics processes more agile, dependable and sustainable with innovative execution and visibility solutions,” he says. “Blume’s service promotes further integrations with marine terminals, provides container availability for import shipments and extends with execution and visibility solutions beyond the port for true end-to-end supply chain orchestration.” Meanwhile, Blume’s CarrierGo app allows drivers to take a picture of signed bill of lading for electronic proof of delivery. Blume Maps, a digital twin of the supply chain, helps plan a freight shipment’s route, providing alternative modes, carriers and routes when shipments are behind schedule, enabling worldwide end-to-end visibility. “With Blume Maps, shippers can plan for the unexpected and reduce emissions by charting out the most expedient route before the shipment starts,” Jones says. “Tariff troubles, COVID shutdowns, the ramp up in online ordering, the Suez blockage, etc. are all part of a bigger picture. Supply chain stakeholders need to be prepared for the unknown and become comfortable operating in a world of

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uncertainty. Becoming ‘smarter’ by utilizing supply chain technology solutions is a big part of creating an agile organization that can quickly adapt to global challenges and opportunities. Organizations need digitally empowered logistics platforms that leverage data to efficiently make informed decisions.” Information technology also plays a critical role in real-time management and in-motion inventory of shipments, Bowen says. “Whether it was the proactive updates from the ship lines on arrival time adjustments, supply chain visibility tools providing real-time visibility to items at rest and in motion or warehouse technologies enabling customers to quickly adjust their planned cargo movement to transload and expedite it to end markets, all of these technology use cases by CEVA Logistics and our partners played a critical role in increasing efficiency, and thereby sustainability, in supply chains even during unprecedented times,” adds Bowen. What’s mission-critical now are endto-end solutions that integrate advanced document management capabilities, robust collaboration features and support for bookings, with end-to-end real-time tracking, according to Karthik Rajagopal, SVP, strategic initiatives at FourKites. That’s why FourKites developed the Network Congestion Map, which tracks cross-border freight movements across North America, Mexico and Europe, as well as port delays and interstate transit metrics at over 230 ports globally. “Visibility into container location is just the tip of the iceberg when it comes to efficient management of ocean freight,” says Rajagopal. “Companies also expect highly accurate ETAs that are not just dependent on the individual vessel that the container is on, but [also] on the overall state of the global ocean network, including ports and other steamship lines. In a recent survey of 160 senior ocean supply chain leaders, 60% cited their need for better document management, and more than 40% said they intend to Imports at the nation’s largest retail container ports are expected to grow dramatically during the first half of 2021, according to the monthly Global Port Tracker report.

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COVER STORY continued played a key role in creating visibility and helping to develop alternate transport plans, but this would not have been as effective if it weren’t for the various modes working together to ﬁnd ways to maximize the assets in play to deliver the needed services. As always, collaboration was the glue holding this effort together.” The Suez Canal situation showed how resilient the network actually is, adds Sappio. “Ocean carriers quickly advised customers, tracked delayed shipments, shifted routings. Trade did not stop. It may have been delayed, but it did not stop. Technology, customer service and contingency planning allowed shipping companies to improvise, overcome and adapt. At the end of the day, the impact on actual consumers is negligible,” says Sappio.

Ports power through Despite disruptions, imports at the nation’s largest retail container ports are expected to grow dramatically during the ﬁrst half of 2021 as increased COVID-19 vaccination and continued in-store safety measures enable additional shopping options, according to the monthly Global Port Tracker report released by the National Retail Federation (NRF) and Hackett Associates. April is forecast at 1.9 million TEUs, up

World Trade Organization

upgrade their systems by investing in the further digitalization of their international processes.” For its part, ClearMetal offers global visibility and predictive ETA solutions, so that carriers, ports and shippers can more efficiently plan ocean and landside operations. “For example, through ClearMetal’s advanced ETAs and predictions of ‘availability for pickup,’ drayage providers can be more accurately scheduled to reduce unnecessary trips or idling in congested terminal pickup lines,” says Adam Compain, CEO of ClearMetal. Plus, the development in cargo growth and recovery continues to directly impact the supply chain infrastructure. “Although the supply chain remained undeterred, it would be disingenuous to say that the system performed at a high level during these record cargo flows,” says Mike Wilson, CEO of Consolidated Chassis Management (CCM). “Challenges persisted (and still persist) throughout the network. Whether one looks at ships, terminals, railroads, trucking or warehousing, the infrastructure available was not sufficient to optimally move cargo through the supply chain. Even with these challenges, we did see the continued importance and impact of increased transparency and flexibility in the supply chain. No doubt, technology

The World Trade Organization says volume of world merchandise trade is expected to increase by 8% in 2021 after falling 5.3% in 2020.

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18.2% year-over-year; May at 1.92 million TEU, up 25.2%; June also at 1.92 million TEU, up 19.6%, and July at 2.02 million TEU, up 5.3%. “We’ve never seen imports at this high a level for such an extended period of time,” NRF VP for supply chain and customs policy Jonathan Gold said in a press release. “Records have been broken multiple times and near-record numbers are happening almost every month. Between federal stimulus checks and money saved by staying home for the better part of a year, consumers have money in their pockets and they’re spending it with retailers as fast as retailers can stock their shelves.” The value of exports from Latin America contracted by 3.2% in the beginning of 2020 compared to the same time period in 2019, according to a report by the InterAmerican Development Bank. Although in recent years, China had been the main driving force behind Latin America’s external sector, its demand for imports came to a standstill. Inter-American Development Bank’s report also detailed that the ﬁrst subregion to experience the trade contagion of the COVID-19 pandemic was South America, whose exports are concentrated in commodities. Its exports contracted at an estimated rate of 7.6% after dropping 6.2% on average in 2019. What’s more is, the World Trade Organization (WTO) says volume of world merchandise trade is expected to increase by 8% in 2021 after falling 5.3% in 2020. However, trade growth is then projected to slow to 4% in 2022. “The strong rebound in global trade since the middle of last year has helped soften the blow of the pandemic for people, businesses and economies,” WTO directorgeneral Ngozi Okonjo-Iweala said in a press release. “Keeping international markets open will be essential for economies to recover from this crisis, and a rapid, global and equitable vaccine rollout is a pre-requisite for the strong and sustained recovery we all need.” On the other hand, large shipping losses are at a record low, falling by over 20% year-on-year, according to a report published by Allianz Global Corporate & Specialty SE (AGCS). South China,

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the terminal enhancement will establish 2,100 new grounded container slots and add 650,000 TEUs of annual container yard capacity in two phases, with the first opening in September. The Port of Wilmington’s $70.8 million Waterfront Development Program, which is funded through the Port of Los Angeles’ Public Access Investment Plan, includes construction of a community park, a waterfront promenade, a public pier, a public dock for commercial vessels, a 2,500-square-foot pad for commercial development and more. Meanwhile, the North Carolina State Ports Authority partnered with Scoular to lease land and develop an agricultural transload facility on the Port of Wilmington. This at-port facility will receive, store and load agricultural products. For its part, the Port of Oakland experienced an unprecedented containerized import surge following a January decline thanks to increased U.S. consumer spending. This is after supply chain disruptions elsewhere drove its January import totals down nearly 12%. “It’s what we expected,” Port of Oakland maritime director Bryan Brandes said in a press release. “Oakland continues to benefit from an unrelenting trade boom. We also completed the assembly of three new giant cranes, which will further improve efficiency.” The Maryland Department of Transportation and the MDOT Maryland Port Administration renewed and expanded their collaborative efforts to strengthen environmental initiatives at the Helen Delich Bentley’s state-owned, public marine terminals. The agreement calls for a continued committed effort to reduce diesel and greenhouse gas emissions and increase energy efficiency at the port. And, the Port of Hueneme welcomed the first of two cutting-edge, energy efficient Del Monte Valiant vessels, signifying the port’s mission to be the cleanest, greenest, most efficient port possible. The Valiant and her sister ships are fitted with environmentally beneficial features,

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Indochina, Indonesia, and Philippines, maritime region remain the top loss locations thanks to high levels of trade, busy shipping lanes, older fleets, typhoon exposure and safety issues on some domestic ferry routes. However, the number of reported shipping incidents increased by 5% year-on-year, driven by machinery damage, which caused over one in three incidents. “[The] Coronavirus has struck at a difficult time for the maritime industry, as it seeks to reduce its emissions, navigates issues such as climate change, political risks and piracy and deals with ongoing problems such as fires on vessels,” says Baptiste Ossena, global product leader, Hull Insurance, AGCS. “Now the sector also faces the task of operating in a very different world, with the uncertain public health and economic implications of the pandemic.” Meanwhile, the rise in demand for cargo transportation through ships and an increase in trade-related agreements continue to boost growth in the global shipping containers market. The global shipping containers market is projected to garner $12.08 billion by 2026, according to an Allied Market Research study. Even further, the global autonomous ships market is estimated to rake in $165.61 billion by 2030, according to another Allied Market Research report. Despite canal crises and global pandemics, today’s U.S. ports continue to forge ahead with infrastructure projects designed to make room for larger and smarter shipping vessels. For instance, the Georgia Ports Authority (GPA) approved capital improvement projects that will increase the Port of Savannah’s container capacity by 20%. “Right now, we are moving container volumes that we did not expect to see for another four years,” GPA executive director Griff Lynch said in a press release. “Our employees are working very hard to ensure we continue to provide our customers with world-class service. Additionally, we are expediting capacity projects that will increase the speed and fluidity of cargo handling at the Port of Savannah.” Dubbed the Peak Capacity project,

FourKites developed the Network Congestion Map, which tracks cross-border freight movements across North America, Mexico and Europe.

including a Hybrid Scrubber system to reduce pollution and control emissions of noxious substances, and shore power connection, so that the ships are zero emission while docked at the port. Even though EVER GIVEN is free, its six-day blockage created months of bottlenecks. Industry experts talk of pricegouging and equipment shortages. The Federal Maritime Commission is cracking down to make sure ocean carriers are meeting legal obligations. And, there’s rumors of peak season surcharges. “Beyond the delay to cargo on board those ships affected, there will inevitably be a knock-on impact for those involved in discharging the containers at destination ports when they finally arrive, as well as the final-mile delivery carriers. While the immediate impact may be a lack of cargo arriving when expected, presenting market supply challenges, it is when the cargo does start to turn up that further potential risks emerge,” says Mike Yarwood, managing director, loss prevention, TT Club. To learn more about these and other transportation trends, register for SCN Summit: State of the Supply Chain Week, which kicks off June 7 with sessions covering food safety, procurement, risk management, warehousing and transportation. Go to https://foodl.me/gunhes to register today!

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3PL / COLD CHAIN

BY BRIELLE JAEKEL, ASSOCIATE EDITOR

CANNABIS TRANSPORTATION HAS SURPRISING REQUIREMENTS FOR 3PLS

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he legalization of marijuana spreads throughout many states in the United States, CBD grows as a trend in wellness and hemp offers a pathway to sustainability, another growing trend. The cannabis plant is certainly an important part of the U.S. economy today, which greatly impacts the logistics industry. In 2020, cannabis sales increased 48% in just one year, reaching $21.3 billion worldwide, according to BDSA. The organization predicts an increase to $55.9 billion by 2026, a compound annual growth rate (CAGR) of more than 17%. Third-party logistics (3PL) companies are often tapped for shipping cannabis-related goods because of this popularity influx. There are several intricacies in this area that makes a keen eye and significant know-how necessary for 3PLs that participate in cannabis transportation. For one thing, transporting cannabis across state lines is still illegal given the federal government’s stance on the legalization of marijuana. And, while the transportation of compliant hemp is allowed per the Farm Bill of 2018, there are a variety of different regulations across state lines that transporters need to pay attention to. “Some 3PLs with no cannabis or hemp experience are attempting to jump into the industry and ship hemp to bring in more revenue for their companies without understanding the proper laws and regulations at the various state levels,” says Kevin Schultz, co-founder and president of The 357 Company and 357 Hemp Logistics. “This is resulting in confiscations of product, loss of investments for shippers and breakdowns in momentum within the hemp supply chain.”

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How does technology help?

Security is key But, it is not just regulations that make the transportation of cannabis a complex sector. Security is an extremely important issue for 3PLs moving cannabis product. “Cannabis transportation has the added element because it is coveted cargo, which exposes the transporter to theft more than other industries,” says Pierre Rouleau, CEO of ManifestSeven. “We have to be very careful and methodical on discretion and thoughtfulness. The BCC regulations cover some of these situations, such as leaving unattended cargo overnight on long hauls for example, but we have to be extra vigilant and smart about our processes, as compared to other types of 3PL categories.” GrowFlow CEO Travis Steffen suggests that those who professionally transport cannabis should follow similar protocol as those who transport cash, with armored vehicles and added security. He also states that many times cannabis transporters must also be responsible for moving large amounts of cash along with the cannabis shipments, adding to the need for security. The increased threat of security issues and possibility of loss of product due to regulation missteps requires a deep dive

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into the insurance policies of the 3PL partner to be sure hemp and cannabis are included. Steffen explains that the same 3PLs that are quick to jump into the industry without enough understanding may also run into trouble with cargo insurance. “These same 3PLs are misleading shippers by telling them their cargo insurance covers hemp, when in fact many times the shipper is stunned to find out they were never covered when they file a claim for loss of product,” he says.

As with many other sectors, technology plays a major role in the security of hemp and cannabis transportation. Visibility is a vital trend throughout all of logistics, but especially with cannabis, as the security issues mean shippers want to know where their product is at all times and want increased communication surrounding the transaction. “3PLs are using technology providers like Onfleet, Nabis and Distru to make sure that cannabis transportation is safe and compliant,” says Robert Fierro, director of partnerships at Onfleet. “The use of technology also allows for greater clarity in track and trace and better just-in-time delivery communication to operators receiving large expensive shipments. These specialized distributors focus on security through the use of specialized vehicles that include real-time video monitoring using telematics from such telematics companies as Azuga.” In addition to video monitoring, 3PLs often use such precise tracking that doesn’t just track the trucks themselves, but also the individual packages within the load. Schultz explains that thousands of shipments were lost last year through some

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Schultz supports the idea of needing additional insurance measures, exemplifying that 357 Hemp Logistics provides up to $50,000 of verifiable hemp cargo insurance for every load transported with the option to go higher if needed. That’s because most cargo insurance does not cover hemp.

Regulation in cannabis is very strict.

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3PL / COLD CHAIN continued

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cannabis, which is an important part of protecting the product. Due to the numerous companies involved in the supply chain and logistics industries, there is always room for improvement when it comes to software and technology. Unfortunately, there is often fragmentation in technology for a wide variety of reasons. “There are numerous small providers that differ by state,” says Steffen. “While a few of the larger, more established cannabis software companies are moving into the distribution and transportation software game, the actual providers themselves are still statespeciﬁc operations for the most part, and there are very few (if any) transportation companies with operations in multiple states. This will also be something that changes relatively quickly.” “In many ways, cannabis is similar to other high-priced goods,” says Fierro. “It needs to be protected, tracked and insured. In regards to some extracts, refrigeration comes into play in order to maintain freshness.”

shippers, but the use of technology and tracking can ensure that goods are not lost, stolen, wrongly delivered or even swapped out for inferior product. But, it is not just location that technology assists within the logistics of the cannabis industry. Schultz also details that blockchain technology helps create one source of truth for all characteristics and information on a speciﬁc batch of hemp. 357 Hemp Logistics uses Global Smart Commodities Group to integrate logistics, shipping and product into blockchain.

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“Unlike a load of corn or soybeans, hemp is highly regulated, and its value can be vastly different due to minor characteristic differences,” he says. “Characteristics, such as THC level or presence of heavy metals can determine whether the shipment is legal or illegal, high value or completely worthless. Providing information on the batch’s characteristics can improve trust at all levels of the supply chain and can be attractive for potential investors.” Technology may also help with temperature monitoring when transporting

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Future growth As cannabis becomes more popular, other trends beyond technology and insurance come into play. Since the cold chain consists of fresh product that can go bad with various fluctuations in demand, smaller vehicles with more “just-in-time” deliveries are becoming more popular, says Rouleau. He also says that as the industry becomes more mainstream, there is less need for cash transactions. “There is also a trend for the industry in general to eliminate cash transacting due to the fact that banking is slowly becoming more accessible for the cannabis industry. These two trends combined allow for less cash transportation, which leads to reduced risk and enhanced safety,” Rouleau adds. These small trends, technology innovations and demand growth are nothing compared to the disruption that a federal legalization bill would cause, positive and negative. As regulations change on a federal and state level, the industry will have to continue to adjust and make changes along the way. “[Cannabis transportation across state lines] is absolutely forbidden for now, and until there is the declassification of cannabis as a Schedule 1 Substance at the Federal level, that will not change,” says Rouleau. “The Federal Government, in our opinion, will declassify cannabis eventually, then we will probably have to tackle with some additional state restrictions. “Cannabis will remain a regulated substance for a while and the big changes will occur when state borders open up to inter-state distribution. That will change the landscape drastically. When that happens, companies from neighboring states will have the right to compete without border restrictions. That will probably result in accelerating consolidation and refining distribution as a whole.” Right now, cannabis must be locally grown and only used and sold legally by those who license by the state and only within that state, according to Fierro. He believes that federal legalization of cannabis will allow for interstate movement of goods and transform the industry. “Just like we receive produce from suppliers outside our home state, cannabis may soon be grown in farming states and shipped to high-demand states,” he says. Steffen agrees that interstate commerce of cannabis is also on its way, stating that it “isn’t an if, it’s a when.” Once this occurs, security will heighten even more. “Inevitably, cannabis transportation will look a lot more like cash transportation services, where you have trained personnel who expect and actively work to protect themselves against attempted theft,” he says. “The larger software providers will very quickly provide services for transportation services in the same ways they provide services to other plant-touching businesses.” Cannabis is an exciting industry to be in today, which will attract a range of 3PLs and logistics providers to join in. However, research and industry knowledge and the ability to be flexible will continue to be key as the nation evolves its laws and regulations regarding the substance.

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SECTOR REPORT

WAREHOUSING

FLEXIBLE SPACE WAREHOUSING

FOR THE COLD STORAGE MARKET T he United States has approximately 3.6 billion cubic feet of food commodity cold storage capacity covering 180 million square feet of industrial space and 2 billion cubic feet of similar capacity covering 300 million square feet of retail space. But, when something like the Coronavirus disease (COVID-19) hits, thus transforming the grocery retail market, that cold storage capacity also transforms to become a more flexible solution for all ever-changing demands.

appreciate the difference in scale between a traditional cold storage warehouse, which typically would be between 150,000400,00 square feet, while a pharmaceutical cold storage facility would typically be between about 20,000-60,000 square feet. Even if pharmaceutical cold storage facilities expand their footprints significantly, the overall impact to the broader sector will be relatively minor. Nevertheless, vaccine storage demand should present opportunities for those not intimidated by high costs per square foot for critical facilities.

Vaccine distribution drives investment opportunities

The need for new facilities

COVID-19 vaccine distribution certainly presents opportunities for the cold storage sector, but the most important element may very well be cold chain logistics. Some pharmaceutical cold storage capacity will be needed as pharmaceutical cold storage volumes rachet up. While the emergence of the vaccines and their ultra-cold requirements has drawn global attention, pharmaceutical cold storage is a very small subset of the overall industrial cold storage sector, so the investment opportunity will naturally also be rather limited.

New opportunities for real estate investment

Capital sources targeting cold storage sector There is an abundance of capital interested in cold storage warehouse investing. Sources vary from real estate investment trusts (REITs) to institutional investors, private equity firms, family offices, high net worth individuals and foreign investment. Prior to COVID-19, interest in cold storage had already increased, but acceleration witnessed in e-commerce, online grocery and meal kit sales created very visible needs for additional and more modern cold storage facilities. Most investors are still primarily focused on buying buildings in core industrial markets with strong credit tenants and long-term leases. This somewhat coincides with overall @kokliang1981 - adobe.stock.com

The logistics cold chain will continue to see tremendous investments in mobile cold storage units. It is also important to

New facilities, or at least a large number of expanded facilities, will be required to handle the new vaccines. These facilities may not differ too much from existing pharmaceutical cold storage facilities. It is hard to imagine that storage for those products can be economically stored in warehouse environments, unless they are in mobile, ultra-cold freezer units.

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industrial rental rate growth, which is near record-high due to industrial demand and strong absorption rates. Interest in developing or owning “cold storage” has become a key focus by many developers over the last couple of years, and has been magnified during the pandemic with a tremendous push by developers to learn how to build “cold storage” on speculative basis. Cold storage buildings are costly, often 3-4 times the cost of dry warehouses to build, and the returns can be slightly less than dry warehouse buildings, while the risks are higher.

Available returns for investors Investors/developers in cold storage are seeking higher, double-digit returns to compensate for the perceived additional risk associated with more complex and costly assets. These higher returns may become more difficult to achieve as competition has certainly increased in the cold storage sector. As more investors have entered the space, the yield premium associated with stabilized cold storage warehouses has certainly narrowed.

Obstacles to investing in cold storage facilities The first and most significant obstacle to investing in cold storage is scarcity. The sector is relatively small, and a large percentage of cold storage operators insist on owning their own facilities. Additionally, cold storage warehouses only comprise 1-3% of industrial warehouses within most parts for the United States. Go to https:// foodl.me/xf7hl6 to read more.

ABOUT THE AUTHOR KEVIN KELLY cold storage specialist and SVP, CBRE National Food Facilities Group

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SECTOR REPORT

TRANSPORTATION

BY MARINA MAYER, EDITOR-IN-CHIEF

TOP 5 TRENDS

DRIVING RAIL FORWARD

1. Visibility. Being able to forecast and somewhat prepare for future supply chain disruptions is a key piece to the supply chain puzzle. That’s why many of today’s rail and intermodal providers are implementing supply chain visibility. For starters, KALERIS launched Transport Analytics, a business intelligence offering to increase enterprise analytics across the rail supply chain. Transport Analytics visualization tools and dashboards help users analyze large data sets, aggregate key performance indicators (KPIs) and quickly identify and manage exceptions to improve asset utilization, inventory turns and productivity. And, GS1 developed EPCIS for Rail Vehicle Visibility, a new GS1 application

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standard that allows rail stakeholders to leverage Electronic Product Code Information Services (EPCIS) to obtain complete visibility of rolling stock in realtime.

2. Technology and innovation.

The U.S. Department of Transportation, for example, developed the Automated Vehicles Comprehensive Plan to advance rail safety, promote collaboration and transparency, modernize the regulatory environment and prepare the transportation system for disruptions. As discussed in Food Logistics’ SCN Summit: Transportation session (foodl.me/ wc9bwx), 42.9% of survey respondents

One thing rail has been doing a lot of is innovating. Whether it’s implementing augmented reality, holographic projection and 3D laser scanners to shipment visibility solutions, advanced fuel management systems and machine learning, the revival of rail involves everything high tech and operating With a surge in imports and increased e-commerce demand, intermodal continues its streak of monthly year-over-year gains. smarter. Association of American Railroads (AAR)

or some time, rail remained the underdog in the transportation sector, taking a backseat to its trucking and shipping counterparts. But, when something like the Coronavirus disease (COVID-19) strikes, rail becomes the go-to solution for moving goods across the country. Here are Top 5 trends and technologies driving the rail industry forward.

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Despite the COVID-19 pandemic, rail and intermodal continue to operate as sustainably as possible. @tostphoto - adobe.stock.com

are investing in Internet of Things (IoT) to optimize their transportation supply chain, while 14.3% are investing in automation. “Widespread deployment of new technologies like Positive Train Control (PTC)—strategically designed to address human error—are opening an exciting new era of safety and efficiency improvement for U.S. freight railroads,” says Luisa Fernandez-Willey, assistant VP, policy and economics for Association of American Railroads (AAR). “The nation’s largest railroads, known as Class I, successfully met the congressionally mandated deadline to have PTC fully operable by the end of 2020. Today, PTC is fully implemented and in operation on 100% of Class I PTC route-miles network wide.”

3. Sustainability Despite the COVID-19 pandemic, rail and intermodal continue to operate as sustainably as possible. For instance, railroads already have deployed advanced fuel management systems, giving locomotive engineers real-time power and speed recommendations to improve fuel efficiency up to 14%, Fernandez-Willey says. “Improved rail car designs and distributed power (placing a locomotive in the middle or rear of a train) reduce the horsepower needed to move a 125-car train. Additionally, some railroads are also testing potentially game-changing technology such as battery electric and

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hydrogen fuel cell locomotives,” she adds. “Preserving the environment and combatting climate change is a responsibility railroads take seriously. Thanks to targeted investments, innovative technology and evolving operations, railroads are the most fuel-efficient way to move freight over land. In fact, one train can move 1 ton of freight more than 470 miles on 1 gallon of fuel, on average.” Ward Proctor, director, business solutions for Railinc, adds that freight rail is the most efficient and sustainable way to transport goods across North America. “With just 1 gallon of fuel, a ton of freight can be moved more than 470 miles and less than 1% of all U.S. greenhouse gas emissions come from freight railroads,” he adds. “Railinc’s visibility products enable adoption of fuel-efficient rail by a broad spectrum of shippers who require a high level of supply chain visibility when moving perishable shipments or products that must be protected from tampering or contamination. With enhanced visibility through Railinc’s RailSight Suite, shippers can confidently choose rail as a sustainable shipping option.” For its part, Schneider announced a new set of corporate goals in achieving a sustainably-focused culture. These goals includes a commitment to reducing carbon emissions by 7.5% per mile by 2025; a commitment to doubling Schneider’s Intermodal size by 2030, thus reducing carbon emissions by an additional 700 million

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pounds per year; and a commitment to achieving net zero status for all company-owned facilities by 2035, among others. “Schneider has committed to the future of fleet electrification, making necessary short- and long-term investments such as testing electrified powertrains, developing strategic zero-emission vehicle (ZEV) adoption plans and building relationships with key stakeholders and industry partners. The company has been piloting the use of an electric eCascadia truck by Freightliner in California for local and regional delivery and pick up,” says Craig Paulsen, VP, intermodal sales and marketing for Schneider.

4. Real-time results. Advances in rail shipment estimated times of arrival (ETA) make it possible for shippers to use both intermodal and carload shipments that provide essential time-to-market performance and reliability, Proctor says. “The RailSight Suite of Applications provides more than 11 million daily shipment and equipment management events that enable 3PLs, equipment owners and other customers to easily plan operations and respond to issues,” he adds. “Railinc’s RailSight has launched a new advanced ETA service that utilizes machine learning to provide more reliable ETAs than what has been available. Using neural networks, the advanced ETA service now dynamically uncovers origin destination-speciﬁc patterns

from Railinc’s event stream that can more appropriately account for the complexity required to predict arrival times. With the resulting signiﬁcant ETA improvement for both freight and intermodal lanes, shippers can better plan plant operations, manage inventory and inform customers.”

5. Intermodal makes comeback. Total intermodal volumes rose 9.6% year-over-year in the fourth quarter of 2020, according to the Intermodal Association of North America’s (IANA) Intermodal Quarterly report. Domestic containers gained 8.7% year-over-year 2020; international shipments, 9.4%; and trailers, 17.5%. “Intermodal continued its comeback in the fourth quarter after declines in the ﬁrst half of the year,” Joni Casey, president and CEO of IANA said in a press release. “Against the backdrop of COVID, all market sectors posted gains, setting the pace into at least Q1 of 2021.” Intermodal also hit record-breaking levels in November and December 2020 due to imports and increased e-commerce demand and businesses re-stocking inventory, says Fernandez-Willey. “Once the economy re-opened by mid-2020, we saw recovery across many carload categories and intermodal,” she adds.

As discussed in Food Logistics’ SCN Summit: Transportation session (foodl.me/wc9bwx), 42.9% of survey respondents are investing in Internet of Things (IoT) to optimize their transportation supply chain, while 14.3% are investing in automation.

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SECTOR REPORT

TRANSPORTATION

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FREIGHT TECHNOLOGY: HOW EMERGING TECH IS RESHAPING THE LOGISTICS INDUSTRY

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or decades, the logistics industry has relied on a core, largely consistent set of methodologies and tools to manage supply chains, people and communications. From phone calls and emails to good old pen and paper, as much as freight has changed over the past decade, many of its processes still rely on analog solutions. The idea that a multi-trillion-dollar industry rests on the shoulders of largely outdated processes is concerning. The truth is, there are a lot of moving parts in logistics, and while these processes are tried-and-true, they are quickly losing their place in an industry that demands efﬁciency. So, what are the alternatives? To be honest, there aren’t as many substitutions as there are replacements. Companies are quickly beginning to revamp their supply chain’s efﬁciency by means of new technology and operational models.

The integrated freight marketplace The last few years have seen phone calls and email chains replaced by algorithms and digital platforms. Waiting hours for a call or a conﬁrmation email wastes time, resources, and ultimately, money. More and more logistics professionals are looking for ways to automate away those rote tasks while simultaneously creating a more coherent communication stream across the entire supply chain.

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As evidenced by the mass Coronavirus disease (COVID-19) disruptions and the more recent Suez Canal incident, being able to respond to delays in real time is not just convenient, but critical, for modern logistics. Digital marketplaces are helping move the needle for both data sharing and transactions. By consolidating parties onto a single platform, it’s easier to connect shippers and providers more directly and in real-time.

What is a managed marketplace? Managed marketplaces are online portals that help shippers and carriers connect via a live, interactive platform while providing the background operational support of a more traditional brokerage. Marketplaces allow for: · Shippers to find carriers to move their product. · Carriers to filter through loads from multiple sources. · Real-time pricing and capacity. · Customer-carrier matching. · Online support. This means that carriers no longer need to make multiple phone calls to fill their trucks or get details on a specific load. It can also help reduce their empty miles and improve overall efficiency. For shippers, marketplaces provide

access to a large network of carriers and an easy way to intake bids. Because the marketplace is managed, the carriers are all fully vetted, and in some marketplaces, scored based on service. This means that shippers can enjoy the volume of carriers offered on a traditional load board, while still having the peace of mind provided by a more carefully cultivated pool of drivers. Integrations have become a popular feature of transportation management systems (TMS) as well as managed marketplaces. Rather than having to learn how to use a new platform, many businesses are now able to integrate these new tools and features into their current TMS and existing portals. Integrating enhancements into pre-existing platforms creates a shorter learning curve and speeds up adoption for users. This translates into less time ﬁguring out how to use something and more time actually using it.

Tracking and visibility One other feature some platforms offer is real-time tracking, which brings invaluable visibility to shippers. Drivers are spared the hassle of reporting their location and ETAs while shippers can regularly check in on their freight’s location whenever convenient. This is particularly useful and arguably necessary when transporting goods cross-border.

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The case for cross-border technology Mexico is notorious for being a region where freight can become lost or unheard of until it arrives at its destination. Known as the “black hole” of freight, Mexico does not have the same ELD regulations as the United States or Canada. A cross-border shipment is a multi-party process with numerous handoffs on both sides of the border. A typical Mexico-U.S. northbound shipment can involve up to six people just to effectively communicate a truck’s location: 1. The driver 2. The dispatcher 3. Mexican fleet manager 4. U.S. fleet manager 5. Logistics provider 6. A rep from that same provider This same group of people would be responsible for communicating location on a southbound leg as well. What you get are hours of waiting and multiple phone calls before a shipper knows where their freight is. By that time, the location has already changed. This wastes time and money, can create freight safety concerns, and ultimately, hinders a supply chain’s effectiveness. By taking a proactive approach at utilizing tracking tools, shippers and carriers can improve visibility and ultimately profit by maintaining a tighter grip on their freight and minimizing the parties involved in their cross-border supply chain.

of many small companies, the disruption of markets and the ﬁnancial burdens that came from the early days of the pandemic gave the logistics industry a very clear message—adapt or die. Whatever the next crisis is, companies are more likely to survive (and even ﬂourish) if they are willing to leave the pen and paper behind.

ABOUT THE AUTHOR CHRISTIAN GUAJARDO digital marketing specialist, Forager Group Inc.

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Technology adoption in the age of pandemics Many of these tools and platforms have existed for a few years, but the arrival of the COVID-19 pandemic has accelerated the need for their utilization. When the pandemic hit, leaky and inﬂexible supply chains broke down. Many companies were left scrambling to rebuild while ﬁghting for capacity or attempting to relocate production out of China. Digital supply chains were able to respond to the crisis and adjust their operations more quickly and easily. Some were able to leverage their tech adoption to meet demand and even grow. The collapse

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MAY 2021 | FOOD LOGISTICS

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SECTOR REPORT

SOFTWARE & TECHNOLOGY

BY GIGI WOOD, STAFF WRITER

WEARABLES HELP SOLVE ACCURACY, EFFICIENCY CHALLENGES IN FOOD LOGISTICS

t only takes a moment to realize the merits of advanced technology in the warehouse. Watch a picker use barcode scanners, voice command devices, headsets, smart gloves and other wearable devices, and it’s instantly clear how much more efﬁcient workers can be when equipped. In coming years, the rate of adoption of these devices is only expected to increase and the technology itself will advance. “As wearables continue to grow in adoption, logistics automation will also evolve to improve omnichannel efﬁciencies,” says Thierry Mole, logistics practice director at Symphony RetailAI. Wearable devices and the software they use provide real-time visibility into inventory and replenishment needs, which can be especially important in fresh food warehousing and logistics. “New IoT technologies that are compatible with wearable solutions

will continue to improve and simplify the process for the picker,” Mole says. “These innovations include the wearables themselves, such as connected glasses and corresponding devices, such as digital tags and technologies that support automatic positioning, such as gravity, WiFi and beacons.”

Warehousing in a new age The Coronavirus disease (COVID-19) pandemic presented countless challenges to the warehousing and food logistics industries. “During COVID-19, supply chain disruption hit an extreme,

intensifying issues around inventory, fresh item management and forecasting,” Mole says. “With more shoppers ordering products online, click-and-collect services put a greater strain on warehouse operations, as well as increased the use of dark stores to manage fulﬁllment. Many retailers continue to operate in siloed systems that cause inefﬁciencies and unclear communication. By breaking down these siloes, retailers can leverage internal knowledge along with

“Food logistics certainly requires stricter hygiene standards than many other industries and wearable scanners can address this concern better than conventional scanners. Not only are they easier to sanitize, but they also eliminate germ-spreading vectors like a shared scanner gun,” says Ilhan Kolko, chief product officer of ProGlove.

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consumer trends and demands to effectively ensure unified planning and execution processes.” The pandemic illuminated the deficiencies of the supply chain industry and many warehouse and logistics providers felt the brunt. “The pandemic really showcased the weak points of many industries,” says Ilhan Kolko, chief product officer, ProGlove. “It was clear that there was a strain put on warehouses that were unprepared for the challenges of COVID-19 and found themselves behind on shipments and short staffed due to illness and lockdown measures.” Companies were forced to quickly adapt and reduce inefficiencies. “By improving the speed and efficiency of the worker, shaving seconds off each scan allowed for more to be accomplished and get food logistics back on track,” Kolko says. “ProGlove incorporated push audio, visual and haptic alerts on the deployed devices to not only help shop floor staff avoid accidents and injuries, but to [also] allow for a non-intrusive way to remind workers of social distancing.”

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New e-commerce expectations The pandemic accelerated the use of e-commerce and that trend is expected to continue, with higher expectations from end consumers. According to a McKinsey report, the e-commerce channel experienced 10 years of growth in three months in 2020. Now that e-commerce has a wider audience, the channel is going to have to meet new demands. In the world of food logistics, this is especially true in online grocery ordering. “In this new

@Gorodenkoff - adobe.stock.com

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Wearables help companies protect the health of its warehouse workers.

world that we’re in, with the changes in consumer habits, the accuracy of fulfillment is becoming more and more important,” says Keith Phillips, president and CEO of Voxware. “The accuracy factor is going to increase. In conversations that we’ve had with large grocers, this is one of the things that they are really challenged with. Grocers are trying to figure out how to support the new consumer in terms of how people are now purchasing groceries, ordering online, showing up to pick them up and expecting them to be accurate.” The days of Instacart shoppers walking down grocery aisles with in-store shoppers will soon be a thing of the past. Instead, the entire online grocery shopping operation will need to move to micro-fulfillment and distribution centers or dark stores. “When you get into a distribution center environment, the picking of the items is traditionally very different than the way items are picked in a grocery store,” Phillips says. “In addition to the accuracy, when you’re picking that volume from one

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 Industrial wearables can also be used to track employees’ physiological health, like the Kenzen device’s dashboard software pictured here.

distribution center, the efficiency comes back into play because you also have to be able to deliver it on time.” A similar demand will likely exist in foodservice and restaurants as more begin to re-open. “If I’m a restauranteur and I place an order with you, and one of the items on there is filet mignon, and you show up in the morning to deliver my order, and there’s no filet mignon, then that means I have to remove the most profitable item from my menu that night, which doesn’t make me happy,” Phillips says. “So, the accuracy and the efficiency will continue to be the top priorities across foodservice as a whole.”

Focus on health The focus on industry safety and sanitation has increased since the passage of the

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“We believe that promoting human machine collaboration is pivotal as we FDA’s Food Safety continue to digitize @nasmStudio - adobe.stock.com Modernization Act the shop floors around a decade ago. Since the the world,” he says. “There is pandemic, safety and sanitation are at the no denying that the human worker will forefront in a new way. Now, the limelight remain indispensable for the foreseeable is on the health of warehouse workers, the future. On top of that, ensuring that the spread of disease and keeping employees worker is comfortable with new wearable healthy and efficient. Wearables can help in technology is very important for it to be that equation, says Kolko. fully embraced. It’s one thing to invent a “Food logistics certainly requires new tool, but it’s another to have workers stricter hygiene standards than many adjust to using it. However, we’ve been other industries, and wearable scanners lucky that workers have been adapting can address this concern better than really quickly with our scanners because conventional scanners. Not only are they they recognize the tremendous relief and easier to sanitize, but they also eliminate the benefits right away.” germ-spreading vectors like a shared Industrial wearables can also be used scanner gun,” Kolko says. to track employees’ physiological health, Wearables can also be used to improve says Heidi Lehmann, co-founder of Kenzen, employee comfort on the warehouse floor. which produced a monitoring platform

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en,

A future of increased visibility With heightened demand for health, safety and a greater volume of e-commerce orders, companies will become more reliant on operational visibility, Kolko says. “They will need a reliable picture on how their implemented processes really play out on-site,” he says. “They will need to be able to visualize their shop ﬂoors, identify hotspots and blockers, see whether they have enough workers assigned and so forth. This requires a new approach to data and process analytics.” Kolko says the idea of the “Human Digital Twin” is popular at ProGlove. The concept is based on three pillars—a digital representation of the workers and their movements, a virtual image of the shop ﬂoor and a digital industrial engineer who narrates the processes to allow for actionable insights. The industry is trending toward the use of combined technologies to interpret large volumes of data, create analytics and make predictions and recommendations. Increased visibility through advanced technology helps reduce errors, improving order accuracy, Mole says. “The warehouse is the heart of getting goods where they need to be, so it’s critical that warehouse operations run smoothly,

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Voxware

designed to predict and prevent injuries on the warehouse floor. The device is worn on the upper arm and sample’s a worker’s physiology every five seconds. “As individuals, we are all different physiologically depending on gender, age, cardiovascular health, pre-existing medical conditions and medications,” she says. “This is why monitoring workers on sites at the individual level is so important. Customized work/rest schedules, hydration plans, as well as shift changes at the site level all contribute greatly to total worker health.” The worker is the only one who can see their own biometric information in detail and in real time. Other user groups only see the information they need to keep the worker safe. For example, a safety manager sees a team dashboard, and whether a worker needs assistance or needs to rest, yet they don’t see any specific personal health details.

“In this new world that we’re in, with the changes in consumer habits, the accuracy of fulfillment is becoming more and more important,” says Keith Phillips, president and CEO of Voxware.

efﬁciently and accurately,” Mole says. “Wearables remove manual steps within day-to-day processes, as well as provide real-time, comprehensive data about item location, status and inventory levels. When it comes to picking goods, voice picking is one of the most efﬁcient methods available today, and a wearable device can make the process hands-free.” When workers are scanning at a fast pace, real-time visibility can make a dramatic difference in order accuracy, says Kolko. “Let’s face it, containers look alike or cannot be distinguished because of additional wrappers and so forth,” Kolko says. “So, human error is a hazard that may generate damage when items are confused because of a fast-picking pace. Yet, this issue can be resolved with an immediate feedback option that is pushed onto the device, so that workers know right away they are picking the correct articles.” Voxware uses natural language voice recognition and vision technologies to improve visibility in picking process, Phillips says. “With either vision or scanning technologies, you can

confirm the accuracy of the pick,” he says. “So, you can make sure, if the order is for filet mignon, that the worker actually picks filet mignon by scanning a barcode.” As many indicators point out, to remain competitive in a world of e-commerce and consumer demand for accuracy, the future will require real-time visibility throughout the logistics chain. That kind of visibility needs advanced technology, including mobile devices, voice and visual picking and analytics.

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SECTOR REPORT

PACKAGING

BY BRIELLE JAEKEL, ASSOCIATE EDITOR

AUTOMATION SANITIZATION DRIVE CASE PACKING TRENDS C

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neering’s Ryan Glenn (see page 38) explains that case packing automation machines and systems are a core part of the end-of-line process, automatically constructing as well as packing cases. New machinery needs to seamlessly integrate with the rest of the production line workﬂow to correctly identity and place products. “Case packers can pack individual items Case packing becomes high tech. Signode

ase packing is an important part of the packaging process in warehousing, allowing numerous products to safely ship all together at one time. It speeds up the loading and unloading process while offering a safer environment for products, as cases offer greater physical stability. The process is done in various ways, including by hand or through a case packing machine. But, with technology making significant strides throughout the past few years and the Coronavirus disease (COVID-19) pandemic pushing the need for greater physical distancing, automation is one clear trend making its way through the packaging industry. However, warehouses look to automation in case packing for more than a decline in physical labor; they’re also looking for greater efficiency. “The biggest trend is the push for automation,” says Drew Wenrich, global product manager of general-purpose strapping and case equipment at Signode. “As companies are looking for ways to increase output and reduce downtime, automation becomes the clear answer. Signode has invested significant resources into building our automation portfolio to help support this transition to more automated solutions.” An expert column from Brenton Engi-

together as a unit,” he says. “Different designs assemble and ﬁll cardboard boxes, seal and label packages and more. These systems vary depending on the type of industry and process line they are part of and can perform custom packing operations such as top-loading and side-loading.” In the cold chain speciﬁcally, automation can help reduce work time in an unfavorable environment when having to case pack in cold temperatures and alleviates strain on the human body when dealing with heavy items.

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Another trend in cold chain case packing is cost, which the efﬁciency of automation can help drive down. But, material is also a factor when it comes to expenses in the supply chain. It is an important issue throughout most industries, and that is still the case when it comes to case packing. Jason Bennett, regional sales manager at Brenton, a ProMach Product Brand, says that there is a push to decrease secondary packaging cost, opting for alternative materials to do so. “Some have gone from PET cases to either waxed or standard corrugate and others have improved the bottom line by switching from a more expensive wax

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Case packing is an important part of the supply chain.

coded to standard corrugate when applicable,” Bennett says. “We have had one customer improve the bottom line by approximately $3 million per year by doing this very thing.” When it comes to transporting food in the cold chain, temperature can affect these materials. For instance, the adhesive for tape may be affected by the refrigeration’s temperature. “Humidity and cold temperature are major factors in case packing and can negatively affect the adhesion of the tape,” Wenrich says. “Our recommendation would be to use acrylic pressure sensitive tape which is ideal for humid and cold temperature conditions.”

Bennett explains that anything below 32°F can affect the electronics systems for case packaging, which means technology providers need to consider this when designing robotics and automation systems for cold warehouses. However, humidity is the bigger issue between the two, which affects product handling and case blanks. More so than automation and cost, sanitization is at the front of the line when it comes to trends in case packaging. Sanitization efforts have grown in popularity throughout the years, but since COVID-19, it is even more vital. The washdown capabilities of the equipment is paramount, and must limit harbinger points as much as possible, says Bennet. The need for sanitization becomes heightened once guidelines are involved regarding food in the cold chain. Wenrich warns of the signiﬁcant setbacks that can occur by not adhering to the correct guidelines. “Sanitary guidelines are critical to watch out for when it comes to case packing the food supply chain,” Wenrich says. “Additionally, it is important to keep a keen eye on the versatility across multiple packages and that there is sufﬁcient productivity throughput and maximum reliability/uptime with the machines that you are choosing to work with on your line.” The increase in sanitation guidelines and practices will likely remain long after COVID-19, as well as the continued use of automation. Case packing is an integral part of the cold chain, as consumer demands shift throughout the pandemic and beyond.

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Automation grows in case packing.

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SECTOR REPORT

PACKAGING

CASE PACKING DESIGNED FOR EMERGING BRANDS’ PACKAGED PRODUCTS

FOOD LOGISTICS | MAY 2021

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ing brands often include creative packaging as a competitive edge to attract customers. Automating this type of packaging requires machines with robust, flexible programming and hardware to handle imaginative packaging designs. 3. The brands may have limited engineering staff to integrate separate units. Ensuring that multiple pieces of endof-line equipment work in synchrony and on the same platform requires significant engineering. Emerging brands often do not have the staff or the bandwidth for this type of process, and thus must delegate it to the manufacturer of the case packing equipment. The manufacturer would need to work with the brand to deliver a turnkey @soho a studio - adobe.stock.com

s emerging companies grow, they find the need for automation in their end-ofline processes. Automation is essential for all brands seeking to drive down perunit costs and streamline their workflows so they can remain competitive in their respective markets. When it comes to automating case packing processes, emerging brands share a unique set of needs. Here’s why. 1. They are typically smaller and have less experience with automation. The idea of automating existing processes can appear prohibitively complex and expensive to an emerging company, particularly since the company may anticipate growth that could quickly outpace the abilities of

the newly purchased automation equipment. They need strategically engineered automation processes that deliver both a quick return on investment and the ability to rapidly scale upwards using the same equipment. 2. They may offer new or unique package designs to attract customers. Emerg-

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solution that is fully integrated with the company’s existing infrastructure and whose parts work together. 4. They may have a small and/or unskilled staff of maintenance crew and machine operators. A smaller workforce often means emerging brands have thin maintenance staff, as well as machine operators without the requisite skill set to run

Case packers can pack individual items together as a unit. Different designs assemble and fill cardboard boxes, seal and label packages and more. These systems vary depending on the type of industry and process line they are part of and can perform custom packing operations such as top-loading and side-loading.

ery should provide full end-of-line solutions for brands with limited engineering capacity to tie the entire system together. The new technology should come with full project management to ensure the system operates smoothly both between its separate pieces and with the company’s own processes. Design and changeover flexibility.

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complex, automated machinery. To address this need, emerging companies require high ease-of-use and a short time-to-proficiency in training their operators and technicians. The machinery should largely require toolfree adjustment. Furthermore, the case packing equipment manufacturer would need to provide troubleshooting, remote support capability and a team of technicians for remote support if needed.

Case packing technology Case packing machines and systems are a core part of a brand’s end-of-line process. These machines can automatically construct and pack cases, preparing products for sale and distribution. This requires that the new machines and processes be integrated with the rest of the production line workflow to correctly identify and place products.

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Supporting the needs of emerging brands Case packing technology improves brands’ bottom line by automating processes relating to folding, packing, gluing and taping cardboard boxes. Systems designed for emerging brands’ specific pain points address their issues in a number of ways. Implementing the appropriate level of automation. Because of its flexibility, case packing technology should be scaled to the appropriate size for the brand’s needs. The manufacturer should help determine this scale based on throughput and the brand’s anticipated rate of growth, allowing the brand to scale upwards as it grows. This is critical to ensuring the brand sees a satisfactory return on investment as it introduces new products to the line. Integration with existing systems. The manufacturer of the case packing machin-

Companies with novel packaging concepts should be able to easily program the machine to create highly-customized package designs that will appeal to customers and set the brand apart. Changeovers should be able to be accomplished quickly. Quick to commission and service. For emerging brands time to market is crucial, and few have the bandwidth for extended lead time for delivery and commissioning of equipment. And for most, having access to a remote support team that can assist when help is required is necessary.

ABOUT THE AUTHOR RYAN GLENN VP of sales, Brenton Engineering

MAY 2021 | FOOD LOGISTICS

5/3/21 2:10 PM

SECTOR REPORT

asiandelight

FOOD SAFETY

DIGITIZING HOW TO ONBOARD SUPPLIERS

TO FUTURE-PROOF FOOD SAFETY STRATEGIES

n January 2020, the food supply chains were humming along with business as usual. Refrigerated and frozen proteins, fruits, vegetables and consumer package goods made their predictable journeys from manufacturing to distribution centers along to retail and restaurant locations worldwide. Similarly, the way we engaged our supply partners was predictable, albeit cumbersome, often involving numerous departments like quality assurance, purchasing, category managers and accounting. Each department would likely have different procedures, including manual processes and back-and-forth phone calls and emails. It would likely take weeks to bring a new product into the supply chain, let alone an entirely new supplier. Then one day in March 2020, it all came to a screeching halt, quite literally overnight. It seems like a lifetime ago, but over the past 12 months, companies have re-thought every aspect of how to engage with a supplier, source materials and bring products to market. The abrupt and chaotic disruption to the supplier network in the days and weeks that followed the shutdowns made it very apparent that the industry underestimated digitalization and automation in their supplier management and sourcing processes. In the decades leading up to 2020, we were slow to adopt new methods. After all, the supply chain is a 24-hour, seven-days-a-week business; products keep moving day in and day out. Embracing innovation and affecting change across a supplier network felt complex and cumbersome at best. It was easier to stick with the systems we had. It might have been uncomfortable and inefﬁcient, but it worked. This was very much the “boiling frog” syndrome in action. As the industry began to triage its way through the supply chain crisis, many industry folks felt digital transformation was no longer too complex or unapproachable. For most folks, it couldn’t come fast enough.

FOOD LOGISTICS | MAY 2021

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SR: FOOD SAFETY continued Post-pandemic, we will most certainly never return to the status quo. Sourcing suppliers and products will have to have a digital transformation. It’s critical that procurement and category managers source products and ingredients from well-vetted, reputable suppliers. In many cases, it will be necessary to have multiple suppliers available to supply the same product to mitigate supply disruptions.

Where and how to start A solid and modern digital process starts with a solid strategy. For example, when you’re sourcing a new supplier and a new product, what documentation will you need to gather? Who will need to review and approve the documentation, and how accessible will it be after it’s approved? Likewise, how are you going to evaluate the product that you were sourcing properly? What tools do you have at your disposal to allow you to document and approve the product specifications? Another critical element to a solid digital process is the communication flow between the supplier and the various departments that will need information. Multiple departments such as quality assurance, accounting and procurement will need to collect different information and documentation about a supplier’s product and business. A single contact or a single process in which a supplier can pass the required information and distribute it to the appropriate people will allow for a higher compliance rate and a quicker turnaround

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time to getting them active in your supply chain. Besides digitizing supplier and product evaluation and documentation, another critical element to consider is total cost of ownership (TCO). This pertains to the cost of labor, transport, storage, tariffs, waste/ damage and other costs associated with bringing a product into the supply chain. The TCO needs to be considered when building out a digital supplier sourcing strategy. It’s recommended to calculate these costs when evaluating a supplier and provide a forecast for accurate budgeting. But, given the volatile and unprecedented disruptions experienced since the start of the Coronavirus disease (COVID-19) pandemic, it is clear that more needs to be done beyond just forecasting these costs. We need to evaluate them as close to real-time as possible. Collecting feedback

directly from the loading docks, warehouse floor or restaurant and retail locations will allow you to evaluate both the supplier and your processes to determine whether or not suppliers are meeting your expectations. Finally, you should consider “what comes next,” and this doesn’t just pertain to the next supply chain disruption or another pandemic. Will your digital strategy carry you into the future? Or, is it simply a Band-Aid for the here and now? In the foreseeable future, there will be additional regulatory changes such as FSMA 204 that will require the collection of critical tracking events along with documentation such as Bill of Ladings, Certificate of Analysis and other information relevant to the batch-lot level for a product provided by a supplier. Digitizing how you onboard suppliers to evaluate the TCO and future-proofing your strategy might feel a little daunting, but it’s important to know that we’re all in the same boat. Every business, big and small, has felt the impact of the past 12 months. Making a move to a more automated and digitized process will not happen overnight. Start with the greatest need and build out your plan. From there, take the time to network with industry peers and brainstorm on best practices. We’re all in this together.

ABOUT THE AUTHOR BRYAN COHNFOOD safety solutions engineer, FoodLogiQ

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

ADVERTISER...............................................................................................................PAGE

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Thermo King.............................................................................................................................. 15

Lily Transportation..................................................................................................................... 35

TOTE Maritime.......................................................................................................................... 31

Mack Trucks.............................................................................................................................. 43

Uline.......................................................................................................................................... 33

MSC Mediterranean Shipping Co............................................................................................... 2

FOOD LOGISTICS | MAY 2021

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Food Logistics May 2021

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