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

AUTONOMOUS VEHICLES CATERING TO FOOD

THE LEASE VERSUS OWN DILEMMA

PROVIDING FRESHER FRUIT FASTER

Food Logistics

Global Supply Chain Solutions for the Food and Beverage Industry

GET BACK TO BASICS

WITH FOOD CHAIN SECURITY

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A company’s greatest adversary is likely lurking within its own four walls—meaning appropriate security measures must occur now.

Issue No. 210 October 2019 FoodLogistics.com

Refined by more than 10 years in production and tens of thousands of units sold globally, the Thermo King SLXi Local transport refrigeration unit (TRU) comes to North America with built-in street cred. The SLXi Local is our quietest unit ever and designed for urban distribution trailers from 28 to 53 feet long. Plus, itâ&#x20AC;&#x2122;s six inches thinner and nearly 100 pounds lighter than the competition.

Proven in the worldâ&#x20AC;&#x2122;s largest urban areas, the SLXi Local is coming soon to North America.

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Learn more from your Thermo King representative.

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ON THE MENU

October 2019 ISSUE NO. 211 COLUMNS FOR STARTERS

Rethinking the Global Food Supply Chain— It’s Possible

Sustainable food production means making a commitment to adjust our diets to incorporate more insect protein—and, plant protein.

COOL INSIGHTS

Identify your most likely adversary and take the proper steps.

The right controlled atmosphere protocol and the proper system will help extend transit life potential of fresh produce.

Food Chain Security: Getting Back to the Basics

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Reduce Food Loss with an Optimized Cold Chain

COVER STORY

FEATURE

FOOD (AND MORE) FOR THOUGHT

THIRD-PARTY & REFRIGERATED LOGISTICS

The food and beverage industry is serving its markets with a variety of autonomous vehicles.

SECTOR REPORTS WAREHOUSING

A New Age For Voice Picking

Voice-picking technology advances for greater efficiencies and comfort for users. TRANSPORTATION

The Lease Versus Own Dilemma: What’s Right for Your Operation?

Start with stepwise decision-making, advise the experts.

SOFTWARE & TECHNOLOGY

Winning With a Smarter Delivery Fleet

In a world of consolidation, routing technology helps food distributors stay competitive. OCEAN PORTS & CARRIERS

Providing Fresher Fruit Faster

Americold and the Port of Savannah boost cold chain capabilities for perishable shippers.

Permaculture’s Link in the Global Food Supply Chain

Permaculture’s whole systems approach is a template for the kind of holistic thinking that is required from us today.

DEPARTMENTS

Supply Scan 14 Food on the Move 8

WEB EXCLUSIVES 5 Food Logistics Champions You Need to Know foodlogistics.com/ 21085391

Autonomous Vehicles Catering to Food

Five Tips for Recruiting Gen Z to the Supply Chain Industry foodlogistics.com / 21087389

Could Blockchain Provide the Key to a Safer Food Supply Chain? foodlogistics.com/ 21088495

www.FoodLogistics.com

Published and copyrighted 2019 by AC Business Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher. Food Logistics (USPS 015-667; ISSN 1094-7450 print; ISSN 1930-7527 online) is published 10 times per year in January/February, March, April, May, June, July, August, September, October and November/December by AC Business Media, 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices. POSTMASTER: Send address changes to Food Logistics, P.O. Box 3605, Northbrook, IL 60065-3605. 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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SLXI LOCAL T Urban distribution just got lighter, greener, quieter, and smarter.

he SLXi Local from Thermo King is an innovative transport refrigeration unit (TRU) that will offer immediate advantages to the PUP trailer and urban distribution markets. Reﬁned by more than 10 years in production and tens of thousands of units sold globally, this refrigeration technology has been proven in the world’s largest urban areas and provides clear beneﬁts for inner city deliveries in trailers ranging from 28 to 53 feet in length.

More Payload, Higher Revenue Surpassing competitive units, the SLXi Local is the lightest trailer refrigeration unit available in North America. By taking nearly 100 pounds out of the TRU compared to competitive units and almost 200 compared to their current platform, there’s now more payload space within the trailer. This brings you one step closer to not worrying about weighing out before cubing out, which

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increases payload opportunities to improve your top line.

Greening Up the City Utilizing next-generation R-452A refrigerant, the SLXi Local reduces global warming impact by 45% over competitive units. R-452A is a lower-emission refrigerant that is the safest, most environmentally responsible—and technically and commercially viable—replacement for current TRU refrigerants. SLXi Local even reduces the amount of refrigerant required by 22% compared to its nearest competitor. Plus, it releases 11% less Nitrogen Oxide (NOx). The SLXi Local is ideal for non-California customers or California customers with a trade cycle under seven years in order to avoid adding a Diesel Particulate Filter to the TRU. Bottom line: Everyone will breathe easier while you stay ahead of the sustainability curve.

Peace in the Neighborhood More than 200 of the top 500 largest cities in the U.S. have commercial day and night decibel-based noise restrictions. While the trend of urban delivery is increasing,

it’s become inherently critical for larger trailers to produce the lowest decibels possible while maintaining performance to avoid impacting delivery operating hours and reduce risk of ﬁnes for noncompliance. With a Whisper® kit as standard, the SLXi Local operates quieter to support challenges of urban distribution—day or night. The Whisper kit is comprised of noise-dampening material, a condenser bafﬂer and sound-resistant bottom panel doors. This package is an adaptation of the package for the European market, which faces stricter noise restrictions than the U.S. and Canada.

A Smarter TRU Thermo King is committed to making their units smarter by standardizing the telematics hardware. Whether you connect up front or down the line, it’s easy with the flip of a switch. No additional hardware costs, labor to install and, more importantly, time off the road to get your unit set up. With ConnectedSuite™ telematics, you can monitor and control your assets for temperature traceability and Food Safety Modernization Act (FSMA) compliance. This technology delivers real-time and historical temperature data alongside fleet information – all to help you increase fleet efficiency and reduce the potential for cargo loss. The SLXi Local features reduced overall unit weight, quieter operation, a slim line design, next-generation refrigerant and more – all aimed at offering you an urban solution to meet customer, environmental, legislative, and food safety requirements. Learn more from your Thermo King representative.

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FOR STARTERS

FROM THE EDITOR’S DESK

DETAILS

RETHINKING

THE GLOBAL FOOD SUPPLY CHAIN—

SOWINSKI

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s I write this month’s For Starters column, the Amazon is still on fire. The BBC reports that 80,000 wildfires have broken out in the Amazon rainforest this year, a record number that is compromising the “lungs of the planet.” Deforestation caused by cattle ranching is largely to blame for the fires, but illegal logging and other human activities are also responsible. When I joined Food Logistics eight years ago, I started learning a lot about the global food supply chain, including sustainable food production. Entomophagy—the eating of insects—could figure significantly in feeding the world’s population in the coming years, particularly if the developed world starts to embrace it. Eighty percent of the world’s population already includes insects in their diet. But, the middle class is growing in Asia and other developing regions of the world—and with that comes the financial means to afford beef and other animal proteins. It’s going to take a commitment from the existing carnivores to adjust their diets to incorporate more insect protein—and, plant protein. Two California-based companies, Impossible Foods and Beyond Meat, are making notable

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progress in the plant protein sector. These companies share similar goals: improve animal welfare and human health, lower the impact of food production on the world’s natural resources, and reduce carbon emissions. Beyond Meat’s products are making inroads at several fast-food chains, including Carl’s Jr., TGI Fridays, Dunkin’, and most recently, McDonald’s, which announced in late September its plan to offer a P.L.T. (plant, lettuce and tomato) burger for a limited time in Canada. Frankly, I’m a little surprised at how quickly plant-based “meat” is catching on with consumers. It’s encouraging, but there are other changes that need to take place in order to move the needle—or fork, as it were. Over the years, Food Logistics has covered other sustainable food production trends, such as 3D printing of food, and growing micro-greens in converted shipping containers. It’s not just the sustainable food production angle, but equally important, what these trends mean for transportation, logistics, and the global food supply chain as a whole, that attracts us. We’ll continue to do our job in helping connect the dots on this front. In the meantime, ﬁre up the grill and dig into that plantbased burger. Enjoy the read.

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

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

WWW.FOODLOGISTICS.COM PRINT AND DIGITAL STAFF Group Publisher Jason DeSarle Associate Publisher Judy Welp Editorial Director Lara L. Sowinski lsowinski@ACBusinessMedia.com Editor John R. Yuva jyuva@ACBusinessMedia.com Web Editor Mackenna Moralez mmoralez@ACBusinessMedia.com Contributing Editor Barry Hochfelder Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com Creative Director Kirsten Wiskus Audience Development Director Wendy Chady Audience Development Manager Angela Franks ADVERTISING SALES (800) 538-5544 Associate Publisher (East Coast) Judy Welp (480) 821-1093 jwelp@ACBusinessMedia.com Sales Manager (Midwest and West Coast) Carrie Konopacki (920) 542-1236 ckonopacki@ACBusinessMedia.com National Automotive Sales Tom Lutzke (630) 484-8040, tlutzke@ACBusinessMedia.com EDITORIAL ADVISORY BOARD Jaymie Forrest, President & CEO, Activ Technologies, Inc. John Haggerty, Vice President of Business Development, Burris Logistics Robert A. Norton, Ph.D., Professor of Veterinary Microbiology, Public Health and Biosecurity, Auburn University; Coordinator of National Security Initiatives, The Futures Laboratory Jon Shaw, Director of Sustainability and Global Marketing Communications, UTC Climate, Controls & Security Smitha G. Stansbury, Partner, FDA & Life Sciences Practice, King & Spalding CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (847)-291-4816 circ.FoodLogistics@omeda.com LIST RENTAL Jeff Moriarty, InfoGroup (518) 339-4511 jeff.moriarty@infogroup.com REPRINT SERVICES Carrie Konopacki (920) 542-1236 Fax: (920) 542-1133 ckonopacki@ACBusinessMedia.com AC BUSINESS MEDIA Chief Executive Officer Barry Lovette Chief Financial Officer JoAnn Breuchel Chief Digital Officer Kris Heineman Chief Content Officer Christoph Trappe Vice President, Sales & Marketing Amy Schwandt Director of Digital Operations & IT Nick Raether Director of Digital Strategy Joel Franke Published and copyrighted 2019 by AC Business Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without written permission from the publisher.

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Be innovative • Be committed • Be successful

IT’S POSSIBLE

It takes more than sound technology and know how to plan and realize the best logistics systems.

For every task, the right solution WITRON‘s storage systems offer a cost-efficient and ergonomic solution for every application across all industries regardless of the branch, whether it is handling large-volume or small-volume articles, whether the article range is small, broad, or inhomogeneous, whether maximum dynamics is required, or a continuous work process is needed. It doesn‘t matter if the products are picked into totes or cartons, onto trays, pallets, or roll containers, or other dispatch units. All warehouse solutions – whether highly automated, semi-automated, or manual – are modular and based on standardized system components.

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About WITRON Since 1971, WITRON Integrated Logistics designs, realizes and operates customized logistics and material flow systems that generate sustainable competitive advantages for its clients. WITRON has all the decisive key elements of a successful project under one roof: logistics design, information and control technology, mechanics design and production, as well as functional responsibility as general contractor for logistics. The WITRON Corporate Group has 3,100 employees worldwide. WITRON’s annual revenue in 2017 amounted to 635 million USD. Aside from it’s headquarters in Parkstein, Germany, WITRON has offices in Arlington Heights, Illinois (USA), Toronto (Canada), Venray (The Netherlands), Stoke-on-Trent (UK), Madrid (Spain), Strasbourg (France), and Singapore. WITRON Integrated Logistics, Inc. 3721 Ventura Drive Arlington Heights, IL 60004 Phone: +1 847-385-6000 info@witron.com

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SUPPLY SCAN

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

USDA OFFERS RESOURCES FOR FARMERS HIT BY EXTREME WEATHER

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Farmers that were affected by natural disasters in 2018 and 2019 can apply for assistance through the Wildfire and Hurricane Indemnity Program Plus (WHIP+). “U.S. agriculture has been dealt a hefty blow by extreme weather over the last several years, and 2019 is no exception,” U.S. Secretary of Agriculture Sonny Perdue says in a statement. “The scope of this year’s prevented planting alone is devastating, and although these disaster program benefits will not make producers whole, we hope the assistance will ease some of the financial strain farmers, ranchers and their families are experiencing. President Trump has the backs of our farmers, and we are working to support America’s great patriot farmers.” WHIP+ will be available for eligible producers who have suffered likely losses of certain crops, trees, bushes or vines in counties with a Presidential Emergency Disaster Declaration or a Secretarial Disaster Designation (primary counties only). Losses must have resulted from the following: · Volcanic activity · Hurricanes · Floods · Snowstorms · Wildfires. · Tornadoes · Typhoons

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The food & beverage sector report released by Edge by Ascential found that leading retailers have begun to prioritize their e-commerce presence by expanding their online assortment and fulﬁllment options. Online grocery is expected to increase at a CAGR of 13 percent through 2024, increasing total online sales to $162 billion. Amazon and Walmart will continue to lead the pack of grocery leadership. However, the companies will continue to go head to head to be ranked number one. Amazon will reportedly grow its food e-commerce sales from $8 billion to $15 billion by 2024, while Walmart will increase from $6 billion to $14 billion. “We’re going to see a major shift to online and omnichannel over the next few years with edible grocery,” says Violetta Volovich, associate analyst and report author for Edge by Ascential. “The barriers to adoption and growth in this sector are coming down, and retailers are investing heavily in technology, supply chain and partnerships that will make for an easy, seamless customer experience.”

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www.foodlogistics.com

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Tippmann Innovations

EXPANDED FULFILLMENT OPTIONS WILL DRIVE ONLINE GROCERY SALES

SUPPLY SCAN

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

MCDONALD’S SPEEDS UP DRIVE-THRU ORDERING WITH VOICE-BASED TECHNOLOGY

Tippmann Innovations

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McDonald’s has acquired Apprente, an early stage leader in voice-based conversational technology. “Building our technology infrastructure and digital capabilities are fundamental to our Velocity Growth Plan and enable us to meet rising expectations from our customers while making it simpler and even more enjoyable for crew members to serve guests,” said Steve Easterbrook, president and CEO for McDonald’s Corporation. “Apprente’s gifted team and the technology they have developed will form McD Tech Labs, a new group integrated in our Global Technology team that will take our culture of innovation one step further.” The agreement advances employee and customer-facing innovations while strengthening the chain’s technology. With Apprente’s technology, McDonald’s will have faster, simpler and more accurate order taking at the drive-thru with future potential to incorporate into mobile ordering and kiosks. “McDonald’s commitment to innovation has long inspired our team. It was quite clear from our various engagements that McDonald’s is leading the industry with technology,” said Itamar Arel, Ph.D., co-founder of Apprente and vice president of McD Tech Labs. “Apprente was borne out of an opportunity to use technology to solve challenging real-world problems and we’re thrilled to now apply this to creating personalized experiences for customers and crew.”

TIPPMANN INNOVATION TO BUILD FREEZER EXPANSION FOR GROWING COLD STORAGE OPERATION

Tippmann Innovation (Ti) will break ground on a new freezer expansion for Mattingly Cold Storage. The company’s growth has enabled them to contract with Ti to complete a 1.4 million cubic-foot freezer expansion. For Mattingly, this new zero-degree, 6,100 pallet freezer will enhance the diversity of its product line with current customers. “After listening to a lot of other success stories of people who have worked with Ti, we felt very confident in their ability to build us a high-quality freezer that will allow us to meet the growing needs of our customers,” said Angie Schmidt, executive VP for Mattingly. The companies both have a long-standing relationship in the cold storage industry as Ti partners and Mattingly President, Andy Hess, have known each other for several years. “We’ve known Andy and his family for over 20 years, and have a lot of respect for them and the way they do business. We are excited to work with them on this latest project,” says Rob Adams, Ti Partner. Construction is scheduled to begin this fall with completion in the spring of 2020. www.foodlogistics.com

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SUPPLY SCAN

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

CARRIER TRANSICOLD INTRODUCES INDUSTRY’S FIRST CONTAINER REFRIGERATION UNIT CONTROLLER WITH WIRELESS CONNECTION CAPABILITY

Carrier Transicold’s latest Micro-Link 5 controller enables shipping line personnel to monitor and access container refrigeration unit operations from a old smartphone or tablet. sic an Tr r The Micro-Link 5 controller is the industry’s first container e rri Ca refrigeration unit controller with wireless connection capability for improved visibility, diagnostics, convenience and productivity. The controller allows personnel to interface with refrigerated containers through Carrier Transicold’s new DataLINE Connect app for mobile devices without any physical contact with the refrigeration unit itself. This allows operators standing dockside or on a ship deck to securely monitor temperature readings, check alerts, review diagnostics and download data from nearby Carrier Transicold refrigerated containers. The DataLINE Connect app provides information-rich, intuitive displays so operators can quickly and easily see and respond to relevant container information. Wireless connectivity is just one of several advances over Carrier Transicold’s standard Micro-Link 3 controller. The new controller features a 32-bit ARM processor that is 150-times faster than its predecessor, has twice as many inputs/outputs, enabling the use of additional sensors and significantly expanding its range of capabilities. In addition, it has an expanded memory for data storage and programming. “This represents a major leap in visibility, accessibility and functionality compared to traditional controls,” says Willy Yeo, director of marketing for Carrier Transicold. “Wireless technology enables greater and more convenient customer access to their container refrigeration systems for greater productivity. The Micro-Link 5 controller offers the potential to support more features and digital offerings.”

CARGILL TO OPEN INNOVATION LAB AT UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN

Cargill is opening a new Innovation Lab at the University of Illinois at Urbana-Champaign campus, allowing students to focus on solving the world’s greatest challenges across the global food and agriculture supply chain. The Lab will be led by Cargill’s digital labs team of data scientists, enabling students and staff to work directly with business leaders, operations teams and customers to help move digital ideas to test mode in a matter of weeks. “Cargill’s commitment to engaging our students in its innovation process will add a new dimension to their educational experiences at Illinois,” said Robert J. Jones, chancellor for University of Illinois at Urbana-Champaign. “I had the good fortune to visit Cargill’s headquarters and engage with their leadership in this process. I am excited that Cargill has decided to join the dynamic environment in our Research Park.” The Innovation Lab will provide Cargill with professional talent as students take on the challenge of modernizing agricultural supply chains and food systems across the globe. “We are on a constant search for new innovations and new talent, whose fresh thinking can help us bring new technologies to life,” said Keith Narr, vice president, Cargill’s digital labs team. “With an impressive engineering and computer science program, the University of Illinois is an ideal partner to spur the growth and innovation in our digital business.”

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PROLOGIS BUYS NEW SITE NEAR PORT OF LOS ANGELES

Prologis has purchased an 11-acre industrial site that has an 85,000-square-foot industrial facility for $41.4 million. The company reportedly drew interest in the property as it was located near dense populations, terminal transportation facilities and its close location to downtown Los Angeles. In addition, the site has easy access to the Ports of Los Angeles and Long Beach. “This was an extremely rare, off-market opportunity for us, and we jumped on it,” Darren Kenney, a vice president and investment officer at Prologis tells the Los Angeles Business Journal. “Properties like this very rarely come to the market and when they do, they’re very desirable.” Los Angeles’ industrial market is currently incredibly tight as e-commerce booms throughout the area. According to the Business Journal, the vacancy rate in the area was 1.9 percent. During the latest quarter, 11.8 million square feet of warehouse space was sold or leased.

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SUPPLY SCAN

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

Kroger revealed that Apeel’s longer-lasting avocados will be available in more than 1,100 Kroger stores in the U.S. In addition, the company’s asparagus and Apeel limes will also be offered through a pilot in its Cincinnati market this fall. “Kroger is excited to offer more customers Apeel avocados and introduce longer-lasting limes and asparagus, marking another milestone on our journey to achieving our Zero Hunger | Zero Waste vision,” said Frank Romero, Kroger’s vice president of produce. “Apeel’s innovative food-based solution has proven to extend the life of perishable produce, reducing food waste in transport, in our retail stores and in our customers’ homes.” Apeel’s plant-derived technology provides produce with a little extra “peel” that slows the rate of water loss and oxidation—the primary causes of spoilage. “Kroger is leading the way to alleviate the food waste crisis at every level, from its supply chain to its retail stores to the homes of over 11 million customers who shop at Kroger every day,” said James Rogers, CEO of Apeel Sciences. “We’re excited to expand our partnership with Kroger to further prevent food waste while simultaneously giving families more access and time to enjoy healthy fresh produce.”

UTILITY TRAILER MANUFACTURING CO. ANNOUNCES RESULTS OF SUSTAINABILITY PERFORMANCE REPORT

Utility Trailer Manufacturing Co. has revealed the results of a third-party sustainability performance report conducted by Ramboll, a leading engineering, design and consultancy company. Ramboll used over 20 years of data from all five of Utility’s manufacturing plants across the United States, providing insight into the benefits and impact of the company’s effort to responsibly reduce its overall air emissions, waste and energy consumption. Utility participated in numerous green initiatives, eliminating ozone-depleting emissions from their inject-foam insulation process and reduced their overall waste and emissions. Results show that Greenhouse Gas (GHG) emissions decreased by 27 percent, volatile organic compounds (VOC) emissions were cut down 62 percent and Hazardous Air Pollutants (HAP) air emissions sunk 97 percent. “We are honored to say that all Utility manufacturing plants are classified as Minor Sources of Emissions under the USEPA’s Clean Air Act regulations,” says Brett Olsen, marketing manager for Utility. “We take pride in managing our production and manufacturing with integrity as it relates to forward-thinking environmental practices.” In addition, the company sources 100 percent of its wood from forests certified by the Sustainable Forest Initiative and cardboard recycling yielded a 23 percent increase. While Utility was enhancing its environmental practices, the company was also able to improve worker safety as well, with injuries decreasing 63 percent.

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KROGER USES APEEL TECHNOLOGY TO MAKE PRODUCE LAST LONGER ON SHELVES

A. DUIE PYLE ANNOUNCES PARTNERSHIP WITH OAK HARBOR FREIGHT LINES

A. Duie Pyle has partnered with Oak Harbor Freight Lines to expand its coverage area to the West Coast for the first time. This is the company’s first foray into the area and aims to improve transit times while reducing dock congestion and cost impacts upon customers. “Being able to work with another family-owned and operated company who shares similar core values and service standards is something that is important to all of us at Pyle,” says John Luciani, COO of LTL Solutions at A. Duie Pyle. “With our similar business model and combined strength in the market, we are confident adding Oak Harbor Freight Lines to our elite partnership network is going to prove valuable for customers across the U.S.” The partnership provides predictable, quality service that offers better than long-haul standard transit time, all while reducing dock handling to improve quality. Combined, the companies have a total of 4,800 employees, 58 service centers, 2,100 tractors, 4,600 trailers and nearly 200 years of experience to both the West Coast and Northeast markets.

*Source

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www.foodlogistics.com

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You promised a quality product from start to finish. We’ll help deliver.

The last thing your customers need are surprises. When you work with Old Dominion, they won’t happen. Because we are 23,000 dedicated logistics professionals working toward perfection. Our dedication is proven by our #1 rankings for value, satisfaction, responsiveness and overall performance.* So no matter how or when you need to ship, you can feel confident that you have several thousand partners by your side. For more information, visit odfl.com or call 1-800-235-5569. *Source: 2018 Mastio & Co. National LTL Carrier Report Old Dominion Freight Line, the Old Dominion logo and Helping The World Keep Promises are registered service marks of Old Dominion Freight Line, Inc. ©2019 Old Dominion Freight Line, Inc.

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

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SHIPPING INDUSTRY TO EXPAND DIGITAL TRANSFORMATION OF MARITIME FREIGHT MARKET According to the Digital Transformation of Maritime Freight Market by Transparency Market Research, the global digital transformation of maritime freight market is predicted to reach $38.4 billion by 2027, increasing at a CAGR of roughly 10 percent over the next eight years. Growth of the market is driven by the increased importance of emerging technologies within the shipping industry. According to the report, the software solution segment was valued at $15.3 billion in 2017. Currently, the digital transformation of the maritime freight market is dominated by North America, followed closely by Europe. Digitizing the sector has greatly improved the efficiencies of companies as they have begun enabling the integration of artificial intelligence technologies, blockchain, Internet of Things and robotics. These technologies help by forecasting long-term traffic and intelligent coordination models.

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DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

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

One of the most telling freight indicators is the load-to-truck ratio, which represents the number of loads posted for every truck posted the spot freight market. In the middle of September, the national average ratio for refrigerated freight was 4.5, meaning there were roughly 4.5 loads available for every available truck. As a general rule, three loads for every truck is when the market (and pricing) starts tipping in the carrier’s favor. Indeed, on September 15, the national average spot reefer rate was $2.17 per mile, 3 cents higher than the August average. But it’s worth noting that the average load-to-truck ratio in September 2018 was 5.9. And it was 10.5 in September 2017. Why are load-to-truck ratios sitting at a relatively low 4.5 today? There’s plenty of freight. Spot reefer volume in August increased 2 percent from

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July and was 6 percent higher compared to August 2018. With the number of loads trending higher, much of the decline in the load-totruck ratio can be attributed to an influx of capacity. Buoyed by last year’s rate

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environment, strong volumes, and having made it through ELD implementation and enforcement, fleets added trucks and spot rates slipped. Ample trucks and lower rates are good news for shippers heading into the fall and winter holidays.

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Flickr

LOGISTICS TRENDS IN OUR INDUSTRY

Statement of Ownership, Management, and Circulation

Pexels

(Requester Publications Only)

WALMART EXPANDS GROCERY DELIVERY MEMBERSHIP TO 1,400 STORES

1. Publication Title

2. Publication Number

3. Filing Date

Food Logistics

015-667

September 15, 2019

4. Issue Frequency

5. Number of Issues Published Annually

6. Annual Subscription Price

Free to Qualified Subscribers

Jan/Feb, March, Apr, May, June, Jul, Aug, Sept, October, Nov/Dec

7. Complete Mailing Address of Known Office of Publication (Street, City, County, State, and Zip+4)

Contact Person

AC Business Media 201 N. Main Street, 5th Floor Fort Atkinson, WI 53538-1807

Telephone

Angela Franks

(920) 542-1259

8. Complete Mailing Address of Headquarters or General Business Office of Publisher

Walmart will expand its reach of “Delivery Unlimited”—a grocery delivery membership option for customers—to 1,400 stores. The program allows customers to have the option to pay a yearly $98 fee or a monthly $12.95 fee to receive unlimited Walmart Grocery Delivery orders. Tests of Delivery Unlimited began in four markets earlier this year. Based on positive response from customers in Houston, Miami, Salt Lake City and Tampa, the grocer will expand the program to all 200 metro areas where Grocery Delivery is available. The service will be available in more than 1,600 stores and more than 50 percent of the U.S. by the end of the year. “We’ve been investing in our online grocery business by quickly expanding our Grocery Pickup and Delivery services. Delivery Unlimited is the next step in that journey,” says Tom Ward, senior vice president, digital operations for Walmart U.S. “By pairing our size and scale and these services, we’re making Walmart the easiest place to shop. Combine that with the value we can provide, our customers can’t lose.”

AC Business Media, 201 N. Main Street, 5th Floor, Fort Atkinson, WI 53538-1807 9. Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor Publisher (Name and Complete Mailing Address)

Jason DeSarle, Group Publisher 201 N. Main Street, 5th Floor Fort Atkinson, WI 53538-1807 Editor (Name and Complete Mailing Address)

Lara Sowinski, Editor-in-Chief 201 N. Main Street, 5th Floor Fort Atkinson, WI 53538-1807 Managing Editor (Name and Complete Mailing Address)

10. Owner (Do not leave blank. If the publication is owned by a corporation, give the name and address of the corporation immediately followed by the names and addresses of all stockholders owning or holding 1 percent or more of the total amount of stock . If not owned by a corporation, give the names and addresses of the individual owners. If owned by a partnership or other unincorporated firm, give its name and address as well as those of each individual owner. If the publication is published by a nonprofit organization, give its name and address.) Full Name

Complete Mailing Address

ACBM, LLC, Barry Lovette, CEO

201 N. Main Street, 5th Floor, Fort Atkinson WI 53538-1807

11. Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or more of Total Amount of Bonds, Mortgages or Other Securities. If none, check here.  None Full Name

Complete Mailing Address

12. Tax Status (For completion by nonprofit organizations authorized to mail at nonprofit rates) . (Check One) The purpose, function, and nonprofit status of this organization and the exempt status for federal income  Has Not Changed During Preceding 12 Months

tax purposes:

 Has Changed During Preceding 12 Months

PS Form 3526-R Facsimile, July 2014 13. Publication Title

14. Issue Date for Circulation Data Below

Food Logistics

September 2019

15. Extent and Nature of Circulation

Average No. Copies

a. Total Number of Copies (net press run)

NEW ATRI STUDY QUANTIFIES DRIVER DETENTION IMPACTS

Outside County Paid/Requested Mail Subscriptions stated on

No. Copies of Single

Each Issue During

Issue Published

Preceding 12 Months

Nearest to Filing Date

25239 17696

25352 16255

(1) PS Form 3541. (Include direct written request from recipient, telemarketing and b. Legitimate

Internet requests from recipient, paid subscriptions including nominal rate subscriptions,

Paid and/or

The American Transportation Research released a report on the safety and productivity of truck driver detention at customer facilities. The analysis is based on over 1,900 truck driver and motor carrier surveys conducted between 2014 and 2018. Over the four-year period, detention frequency and length has increased, creating negative impacts on driver productivity, regulatory compliance and compensation. Key findings include: · Drivers reported a 27.4 percent increase in delays of six or more hours. · Female drivers were 83.3 percent more likely than men to be delayed six or more hours. · There was a nearly 40 percent increase in drivers who reported that the majority of their pick-ups and deliveries were delayed over the past 12 months due to customer actions. · The average excessive detention fee per hour charged by fleets was $63.71, slightly less than the average per hour operating cost of $66.65 found in ATRI’s Operational Costs of Trucking. · The negative impact of detention on carrier revenue and driver compensation may be greater among smaller fleets.

Pexels

s he

FOOD ON THE MOVE

Requested

employer requests, advertiser's proof copies, and exchange copies.)

(2) In-County Paid/Requested Mail Subscriptions stated on PS

Distribution

Form 3451. (Include direct written request from recipient, telemarketing and internet

(By Mail

requests from recipient, paid subscriptions including nominal rate subscriptions,

and Outside the Mail)

employer requests, advertiser's proof copies, and exchange copies.)

(3) Sales Through Dealers & Carriers, Street Vendors, Counter Sales, and Other Paid or Requested distribution Outside USPS. (4) Requested Copies Distributed by Other Mail Classes

17696

16255

6738

8188

Through the USPS. (e.g. first-Class Mail) c. Total Paid and/or Requested Circulation [Sum of 15b(1), (2), (3), (4)] (1) Outside County Nonrequested Copies stated on PS form 3541. (include sample copies, requests over 3 years old, requests induced by a premium,

d. Nonrequested

bulk sales and requests including association requests, names obtained from

Distribution

business directories, lists, and other sources)

(By Mail

(2) In-County Nonrequested Copies stated on PS form 3541.

and Outside

(include sample copies, requests over 3 years old, requests induced by a premium,

the Mail)

bulk sales and requests including association requests, names obtained from business directories, lists, and other sources)

(3) Nonrequested Copies Distributed Through the USPS by Other Classes of Mail.(e.g. First-Class Mail, nonrequestor copies mailed in

333

310

excess of 10% Limit mailed at Standard Mail or Package Services Rates)

(4) Nonrequested Copies Distributed Outside the Mail (include pickup stands, trade shows, showrooms, and other sources)

e. Total Nonrequested Distribution (Sum of 15d (1), (2), and (3)) f. Total Distribution (Sum of 15c and e)

7071

8498

24767

24753

g. Copies Not Distributed

472

599

h. Total (Sum of 15f and g)

25239

25352

i. Percent Paid and/or Requested Circulation

71.5%

65.7%

(15c / 15f x 100) *if you are claiming electronic copies, go to line 16 on page 3. If you are not claiming electronic copies, skip to line 17 on page 3.

PS Form 3526 -R Facsimile, July 2014

Average No. Copies

16. Electronic Copy Circulation a. Requested and Paid Electronic Copies b. Total Requested and Paid Print Copies (Line 15C) + Requested/Paid Electronic Copies (Line 16a) c. Total Copy Distribution (Line 15F) + Requested/Paid Electronic Copies (Line 16a) d. Percent Paid and/or Requested Circulation (Both Print & Electronic Copies) (16b divided by 16c X 100)

No. Copies of Single

Each Issue During

Issue Published

Preceding 12 Months

Nearest to Filing Date

2,453 20,149 27,220 74.0%

2,253 18,508 27,006 68.5%

x I certify that 50% of all my distributed copies (electronic & print) are legitimate requests or paid copies 17. Publication of Statement of Ownership for a Requester Publication is required and will be printed in the October issue of this publication. 18. Signature and Title of Editor, Publisher, Business Manager, or Owner

Barry Lovette, CEO

Date

9/15/2019

I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties).

PS Form 3526 -R Facsimile, July 2014

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OCTOBER 2019 | FOOD LOGISTICS

10/2/19 3:11 PM

FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

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KUEBIX COMMUNITY LOAD MATCH SEES BOTTOM-LINE SAVINGS ACROSS TRUCKING SECTOR

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COMPANIES LOOK TO EXPAND THEIR COLD CHAIN AS DEMAND FOR REEFERS INCREASES The use of reefers for the transportation of fresh produce is envisaged to account for substantial market share this year, accounting for 40 percent of overall sales through 2029. A recent study found that the demand for highly perishable foods has been growing at an unprecedented pace, prompting food and beverages companies to strengthen their cold chain. Demand has since increased for proper transportation refrigeration infrastructure, while creating a window of opportunities for the market players. The research found that the proliferating agriculture sector in developing regions has been creating an increased demand for proper transportation as well. The fruits and vegetables sector will remain a considerable mine of opportunities for stakeholders that are aiming to expand their business and extend their reach in the rapidly developing regions. The traction for truck refrigeration units continues to pick pace in line with the rapidly growing cold chain industry and increasing demand for quality-ensuring packaged foods.

Kuebix continues to provide win-wins for shippers and carriers with its built-in truckload spot market feature Kuebix Community Load Match. Users can easily post a load to Community Load Match to receive spot bids to compare side by side with their regularly negotiated rates from a single system. The platform allows carriers to have direct access to shippers with available freight and helps shippers expand their booking options. According to Kuebix, one customer reported saving $15,000 on 55 shipments every 30 days on a single lane by using Community Load Match. Other users are also seeing substantial bottom-line savings by leveraging the platform’s service. By posting their loads to Community Load Match, their freight can be seen by any of the community’s thousands of carriers. Carriers and brokers are also benefiting from the platform as it gives them direct access to shippers with capacity needs. Instead of putting more “boots on the ground” by expanding a field sales team, carriers can instead leverage the connections they make through Community Load Match to establish long-term mutually beneficial relationships.

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DELIVERY DRIVER STEALS $90,000 WORTH OF CAKE A deliveryman allegedly stole nearly $90,000 worth of handmade cakes from the bakery Lady M Confections, a lawsuit alleges. David Lliviganay is accused of stealing 1,020 pastries—which retail upwards of $90 apiece—from his employer Lady M Confections’ warehouse over the course of four months. Lliviganay reportedly worked at the shop for two years and was caught on camera two dozen times going into the warehouse freezers and taking large amounts of pastries, the lawsuit alleges. He then allegedly sold the cakes to unauthorized dealers for cheap. According to the New York Post, Lliviganay was allegedly caught with Wi-Fi log-in records placing him at the scene of all the crimes. Court papers allege that Lliviganay was stealing the pastries regularly from November 2018 to February of this year. In just January alone, 357 cakes were swiped, totaling at least $31,000. Lliviganay has pleaded guilty to petty larceny and will be sentenced at Queens Criminal Court on September 24. Lady M is seeking full value of what he took “plus interest,” as well as punitive damages for his “intentional, malicious” behavior, the New York Post reports. The New York Times reports that Lliviganay allegedly stole 1,020 cakes over fourth months, bringing in a total of $89,250.

FOOD LOGISTICS | OCTOBER 2019

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www.foodlogistics.com

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FLOG1019_14-17_FOM_JY.indd 17

10/2/19 3:11 PM

COOL INSIGHTS

BY JON SHAW, MARC BEASLEY

REDUCE FOOD LOSS WITH AN OPTIMIZED COLD CHAIN I S H AW

BEASLEY

Institute of Refrigeration, the lack n practice, it is clear that a funcof a functioning cold chain causes tioning cold chain is critical to significant food loss: up to almost the protection and delivery of 20 percent globally. In developed fresh and frozen perishable foods. countries, food losses from the In parts of the world where the absence of refrigeration account cold chain is established and runs for nearly nine percent of total effectively, perishable food loss can food production, and 23 be maintained as low FOOD LOSSES percent on average in as two percent. When FROM THE developing countries. applied properly ABSENCE OF The development and consistently, a REFRIGERATION and implementation of fully functioning cold DEVELOPING COUNTRIES sophisticated data analytchain can successfully ics—such as the Internet of prevent and reduce Things—helps by providing food loss. end-to-end visibility that But, we also know OF TOTAL FOOD PRODUCTION identifies ways to improve that breaks in the food safety and quality, cold chain can occur DEVELOPED COUNTRIES and thus reduce waste and due to a wide variety inefficiency, to close the of issues, including: gaps in the cold chain. operator error; OF TOTAL FOOD PRODUCTION This could take the form insufficient pre-coolInternational Institute of Refrigeration of combining captured ing; poor loading location, temperature, practices; inadequate and logistics data for the suppliinsulation; improperly functioning er-to-distribution leg—including refrigeration equipment; or, even the last mile—of the supply chain something as simple as cargo- or walk-in cooler doors being left open with information about location, temperature and equipment perfortoo long. Any of these breaks can mance from trucks that deliver to cause damage to perishable foods by exposing them to conditions that the same routes every week. Using products and services that are too warm or cold, all leading to reveal how perishables are being food that is lost or wasted. handled as they move through the Even relatively small differences supply chain, we can capture and in temperature can mean a big use information from supply chain difference in the quality of perishperformance data to reduce waste ables. Sometimes the detrimental effects are not immediately obvious and inefficiency, which improves the bottom line. and don’t manifest until the perishBut process variation is the able items are already at home in enemy, and active data manageyour fridge. ment is the best way to improve it. Perhaps the most important Data-driven decisions yield better place to focus on improvements outcomes. Collecting, managing and is in places where the cold chain analyzing data requires consistent doesn’t exist, or is too small to monitoring using a variety of tools. properly function from end-to-end. It takes a team approach, where colAccording to the International

23% 9%

Jon Shaw is director of sustainability for Carrier Corporation, and Marc Beasley is vice president, strategic marketing and business development – food division, at Sensitech.

FOOD LOGISTICS | OCTOBER 2019

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laboration and transparency beneﬁt shippers, carriers and receivers. Moreover, good supply chain intelligence provides a competitive advantage. Every day the cold chain produces a lot of useful information, just waiting to be captured and used. There are many useful areas to measure but not all of them may be practical or even necessary to control the cold chain process. It’s important to carefully decide what data is needed to measure, and then capture that data in the most automated, accurate and reliable way possible. Start by verifying that measurements are accurate and represent the part of the process to be controlled. These can include: • Product precooling • Trailer/container precooling • Trailer/container loading patterns • Refrigeration settings • In-transit ambient temperature • Handling at loading & unloading • Dock and storage conditions There are many ways to analyze data. The most useful techniques will help to identify systematic causes for variation or poor performance. A simple way to do this is to aggregate or summarize metrics in multiple ways and view the data in a graphical format. Spotting trends and patterns can justify process changes, and ongoing monitoring will then reveal if those process changes actually led to improvement. A robust cold chain is the single best way to preserve perishable food, and by effectively harnessing the data it already provides, the potential to reduce food losses and extend food supplies is extraordinary.

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10/2/19 9:18 AM

COVER STORY

BY ROBERT A. NORTON, PH.D.

FOOD CHAIN SECURIT GETTING BACK TO THE BASICS

Identify your most likely adversary and take the proper steps.

civilian world. Are companies today n a recent discussion, a friend so busy firefighting—putting out told me he was concerned that fires needing immediate attenhis military unit was so busy tion—that they lose track of their with the ongoing daily mission requirements that they had forgotten core mission? some of the basics that originally We have to fix the problem by made the unit quickly refocusing As food processing plants so effective. on our core mission, increase their defenses, The military which is to provide a frequently safe, secure, wholeadversaries will calls this some and economical likely migrate problem “firefood supply. Focusing toward other, lesser fighting,” which on this core mission defended vulnerabilities. means having is important not only to deal with to assure that comthe myriad of problems that crop panies in the food chain survive and up while on mission. I asked myself are profitable, but focusing on our if the same thing is happening in the core mission is also important for

FOOD LOGISTICS | OCTOBER 2019

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the safety and security of our nation. Failure in the food chain is not an option. Like my friend said, “It is time we go back to school and focus on the fundamentals.”

Domain Basics: Food Supply 101 Agriculture and the food supply are a continuum, a system of systems, each of which must function properly so food products can be delivered to the consumer in a timely and cost- effective manner. The buying public assumes their food will be free of pathogens, chemicals, harmful materials (such as metal and glass), or radiological

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contaminants. Contamination can occur naturally, due to accident or intentionally. The focus here is on intentional contamination and adulteration. Contamination can occur at any stage of production, transportation, processing, warehousing and delivery. The Food Safety Modernization Act (FSMA) lays out rules focusing on intentional contamination in processing plants. Those rules are an important ﬁrst step. Food products, however, often spend more time outside the processing plant than inside. The implications should not be overlooked. The ﬁrst thing to remember is

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that adversaries generally desire to remain hidden until ready to act. This usually means you don’t know you have a problem until it is manifested. “Target acquisition” takes time, involving planning and preparation. Adversaries seek “dwell time,” meaning an extended period close to their target to plan before they act. Seeking to avoid detection, adversaries seek points of least resistance. As security managers will tell you, your defenses don’t have to be completely impenetrable; they just have to be better than your neighbor’s. As food processing plants increase their defenses, adversaries will likely migrate toward other, lesser defended vulnerabilities. Logistical systems and services could be that more vulnerable target. Although efforts to make logistics more secure are ongoing, capabilities differ from company to company. Logistical systems and services are very different from processing plants in that large portions are mobile. A semi-truck ﬁlled with food products can move long distances before those products are delivered to the customer. That means security systems at every phase of movement have to be effective. Security has to be a continuum, perhaps hundreds of miles long and very different from security in a warehouse or distribution center. Predictions of future events are always fraught with error. Given that caveat, it appears probable that at least one or two categories of adversaries will focus more attention on targeting logistical infrastructure and services and less on ﬁxed structures.

disgruntled employees (you know you have them) with access to your facilities, vehicles and systems. These are the people “inside your wire” who know your vulnerabilities—the chinks in your armor. Rule No. 1: Worry first about your employees and your contractors, the people who are “inside your wire.” How do you properly respond to threat actors from within? When I talk to food companies, I ask, “If something bad happened today, do you have an employee you would consider likely to be involved?” Invariably, the answer is “Yes.” My follow up question: “Why do you retain them as an employee?” At this point, the color has usually drained from the HR manager’s face. “We can’t just fire them, or we’ll get sued…,” is the usual answer. Usually, I ask why a problem employee can’t be fired. At this point, the people present usually start to squirm. Ignoring a problem does not make it go away. Liability is seldom diminished by choosing not to act, which may in fact increase company liability. Knowing you have a problem and ignoring it is often perceived by the courts as being far worse than not knowing you had a problem in the first place. Remember also that intentionally not documenting a problem you know you have could be used as evidence of criminal conspiracy. People talk and others hear it. Intentionally

Knowing you have a problem and ignoring it is often perceived by the courts as being far worse than not knowing you had a problem in the first place.

Who are Your Adversaries? Adversaries, sometimes called threat actors, come in many guises. Of most immediate concern are

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COVER STORY

choosing to not document a problem does not mean no one knows the problem exists.

Company and Personnel Impacts

Security portals should also be updated to automatically reject the former employee’s credentials.

Imagine a potential worst-case scenario. In this hypothetical case, we’ll say an employee is potentially violent—they haven’t acted out, but there are indications they might. The worst-case scenario is seeing such a threat realized, so let’s get real for a If termination moment. The wrong but is is not an option, response to a known malicious manage the problem by or suspected violent and starts putting the employee in a threat actor could a rumor location or position where mean innocent on social they cannot act out their people will be hurt media (food anger in a way or killed. This very products that could negatively scenario has have been “… affect the company. unfortunately poisoned…”), played out too which also can many times in be destructive recent years. Companies frequentto your company’s brand. Once ly don’t survive the litigation from started, a rumor is hard to tamp victims’ families and the negative down, since a negative is difficult publicity associated with violent to disprove. Any threat or rumor attacks. Survivors in the El Paso, associated with a potentially Texas, Walmart mass shooting have compromised food chain must be brought suit, blaming the company taken very seriously by compafor not having armed guards. If nies, and acted upon expeditiously that suit prevails, the impact will be and effectively. significant. Both scenarios are beyond the capability of even the largest Very serious scenario. In this companies to handle alone. Never seek to hide the problem! Law hypothetical case, a problematic enforcement must be engaged employee decides to adulterate early. Proper responses are expethe food passing through your dited where trusted relationships company’s link of the food chain. already exist. Executives are often These adulterated products could skeptical about opening their doors cause people to get sick or die. to law enforcement before events When that happens, this very occur. I can, however, cite countless serious scenario turns to a worst examples when a small investment case. Regardless of the outcome, of time (to inform law enforcement litigation would be inevitable. The about company products, facilities, costs of containment, recovery of systems and policies) has paid food products and remediation important dividends. Trust me—you would also be significant. really do want the cell phone numbers of law enforcement officials. Serious scenario. Let’s say another problematic employee decides to hurt your company in a different Blowback. Let’s look at a related way. This employee is not violent, problem. Suppose you are an inde-

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pendent contractor, providing logistical services to a food company. Do you think a food company will sign a new contract with your company if there is a security failure (e.g., an intentional contamination event) in your system or services that causes a blowback on them? Or, suppose you are the logistical arm of an integrated food company, and an insider threat results in an actual breach in the safety and security of your food products. The CEO and the board are likely to respond, “You let this happen!” That would not be a good day.

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Neutralizing the Threat Actor Once you have identiﬁed a problem employee, we will assume you and your company will choose to act. So what is your next step? If the employee is newly problematic and is not violent, try to remediate and de-escalate the problem. Problem employees often just want their concerns and criticisms to be heard, and sometimes letting them vent to their immediate supervisors is the best ﬁrst option. Whatever you do from this point on, however, make sure you document everything! If the employee has been a chronic problem, you should already have documentation. If not, begin documentation immediately! If a threshold has been passed by the level or frequency of problems with the employee, strongly consider termination. And yes, employees

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ny.

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can be terminated, as long as documentation supports the decision. You, your company or both may indeed end up in litigation, but sometimes this is just a cost of doing business. If termination is not an option, manage the problem by putting the employee in a location or position where they cannot act out their anger in a way that could negatively affect the company. Problematic employees should never be put in locations critical to the safety and security of food products moving through your system, nor should they have access to critical systems. Moving an employee to a different and less critical position or location can at times cause an escalation of risk, because limiting access can be perceived by the employee as a ﬁrst step in eventual termination. Proper personnel management is critical whenever changes to personnel access of facilities and systems occurs.

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Employees escalating toward violence. Now let’s look at a more serious threat actor—someone who appears to be a real threat to the security and safety of fellow employees. Warning signs may vary, but usually include verbal or written threats, heated arguments and possibly physical altercations with supervisors or fellow employees. These threat actors and activities cannot be ignored and must be acted upon immediately. It is imperative to involve the police, and termination of employment should be mandatory. Understand clearly, however, that the threat level has just increased dramatically. Your company’s next steps must be ﬂawless. An employee who is to be terminated should immediately be escorted off company property. Several layers of supervisors should be involved in the escort. And, law enforcement personnel should be part of the escort team

if the perceived threat potential merits their involvement. Company policies differ. Some will allow the fired employee to retrieve personal belongings, while other companies retrieve personal belongings and give them to the fired employee. In either case, everything should be documented, potentially including video recording. Keys or passes should be recovered as At a minimum, company part of out-processing. Security security should remain portals should at a heightened level for also be updated weeks to months if a fired employee to automatically showed signs of violent tendencies. reject the former employee’s credentials. The individual should be escorted to his or her vehicle as quickly as possible. Along with termination papers, the fired employee should receive a document indicating that any return to company property will result in arrest and prosecution. All security personnel and employees

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OCTOBER 2019 | FOOD LOGISTICS

10/2/19 9:28 AM

COVER STORY

continued

working in reception areas should be immediately informed of the termination and given a photo of the ﬁred employee. They should be instructed to immediately call the police if this person seeks to return to a company’s properties.

Fired employees should be considered as significant potential threat actors. There are countless examples of fired employees seeking revenge on company managers and personnel. The most recent example of vengeance killing was perpetrated by Seth Ator, who shortly after being terminated opened fire

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on the police and public in Midland and Odessa, Texas on August 31. As he cruised around town he fired randomly, killing seven and wounding 22. It is difficult to predict how long such a threat will persist, since people differ in their anger and responses to being fired. Where mental pathology exists, the danger period can Proper be protracted. At responses are a minimum, expedited company sewhere trusted curity should relationships remain at already exist. a heightened level for weeks to months if a fired employee showed signs of violent tendencies. Given the importance of maintaining a safe and secure food supply, all food chain facilities and systems should have robust security technology. Access control is essential, even to the extent that employee access is granted only on a need-to-enter basis. If certain categories of employees do not need access to certain facilities, they should be excluded. Security camera systems are not a panacea. Cameras document that an event has occurred, but they do not prevent it from occurring unless someone continually monitors that camera feed. In most food companies, continual monitoring is not an option.

Robert A. Norton, Ph.D., is a professor at Auburn University and chair of the Auburn University Food System Institute’s Food Defense Working Group. A longtime consultant to federal and state law enforcement agencies, the Department of Defense and industry, he specializes in intelligence analysis, weapons of mass destruction defense and military-related national security issues.

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THIRD-PARTY & REFRIGERATED LOGISTICS

BY JOHN R. YUVA

AUTONOMOUS VEHICLES CATERING TO FOOD H

The food and beverage industry is serving its markets with a variety of autonomous vehicles.

ow automated is your supply chain? If your business supports e-commerce, it’s likely to employ a plethora of automated solutions from robotics to Internet of Things to artiﬁcial intelligence. While transformative technologies are prevalent in warehouses and distribution centers, they’re now extending beyond the dock doors to delivery vehicles. Commercial autonomous vehicles (AVs) are hitting the roads, serving the food and beverage industry in many shapes and sizes, from large freight trucks to small robotic AVs. In its report, Distraction or Disruption? Autonomous Trucks Gain Ground in US Logistics, McKinsey

Robomarts are engineered with cutting-edge technology, including driverless tech for autonomy and teleoperations, an RFID and computer vision based checkout-free system, and purpose-built refrigeration and temperature control.

& Company says, “65 percent of the nation’s consumable goods are trucked to market. With full autonomy, operating costs would decline by about 45 percent, saving the U.S. for-hire trucking industry between $85 billion and $125 billion. “Already, companies have made fully autonomous beer deliveries and struck alliances to operate autonomous trucks jointly. The rigs these companies are using are typically new medium- and heavy-duty trucks, outﬁtted with lidars, sensors and other technology to allow the

vehicle to operate without human intervention.” Despite these technological advancements, fully autonomous commercial vehicles ﬁlling the roadways are still years away.

Power of Platooning Autonomy is not an all-or-nothing capability, says Mark Petersen, VP of temperature-controlled logistics for C.H. Robinson. Instead, it’s a progressive continuum of ability. As ﬁgure 1 (below) highlights, there are ﬁve distinct levels of capabilities leading

5 LEVELS OF AUTOMATION LEVEL 1 • Hands on • Driver assistance • Most functions still controlled by human drivers

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LEVEL 2 • Hands off • Partial automation • Vehicle can automate acceleration, braking & steering

LEVEL 3

LEVEL 4

LEVEL 5

• Wheel optional • Mind off • Eyes off • High automation • Full automation • Conditional automation • No human driver • Completely required self-driving, • No active driver except in extreme attention, but weather and unudriver must be sual environments ready to intervene

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to complete self-driving vehicles. While both levels 1 and 2 involve driver engagement and attention to the road, level 3 begins the path toward full automation where the vehicle navigates but a driver is still present for intervention. At both levels 4 and 5, complete self-driving is occurring with minimal human involvement at level 4 and no human driver required at level 5. “The general consensus is that levels 1 through 3 will be reached in the next five years, and levels 4 and 5 are likely 10 or more years away,” says Petersen. “Based on these 5 levels, we are still on level 1 for the movement of food via trucks. Meaning, there isn’t a real impact today, depending on how autonomous is interpreted.” Petersen adds that when you consider the planting, growing and harvesting of food, “tractors and other agricultural field equipment is far more sophisticated than highway driving when it comes to automation, but our focus is transportation on roads.” McKinsey & Company says in its report that companies will see autonomous trucks roll out in four waves—in a platooning formation. The first wave begins with two trucks each with a single driver and gradually transitions to wave four with two or more fully autonomous trucks without drivers. “More than 10 years from now, we expect the first fully autonomous trucks, operating at scale without drivers from loading to delivery.” Petersen says when platooning technology is engaged, drivers essentially drive as usual while wireless technology links each vehicle; a forward-looking radar sensor can sense obstacles ahead and automatically apply brakes in both trucks faster than humans can. “When platooning, trucks can travel closer together than what’s safe when drivers are manually driving. The shorter gap between trucks positively alters aerodynamics, reduces wind resistance and results in fuel savings for both trucks,” he says.

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Autonomous Impacts Beyond the Road Platooning also has other impacts beyond the road. Petersen highlights four areas where structural, regulatory and employee changes are likely to occur. ➊ PHYSICAL STRUCTURE ADJUSTMENTS. The physical structures created to support the movement of goods will need to change when automation increases.

If and when platooning becomes more prevalent, there may need to be new requirements for parking facilities. If there is just one driver in the front truck, but a few other trucks behind him that mimic the front vehicle, what does that mean when they arrive at a delivery point? How do multiple trucks in a convoy unload at a dock? Is there enough space? Who is going to agree to this? Are drive-through

With full autonomy, operating costs would decline by about 45 percent, saving the U.S. for-hire trucking industry between $85 billion and $125 billion.” McKinsey & Company

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3PL

concerns or a belief that only the customer knows what is best for selecting the right level of ripeness, especially for produce,” says Petersen. “With more comfort delegating food orders, more doors are open to not just autonomous vehicles but drones and other robotic delivery mechanisms.”

continued

To maximize flexibility and safety the REV-1 is light-weight and low-power enough to qualify under e-bike regulations.

loading locations going to change to be more like rail yards? Do we need to change how we design distribution centers? “We’ll have to ask ourselves if it enables a higher level of efﬁciency than we deal with today,” says Petersen. ➋ FACILITY RESOURCES. Understanding that last point of where autonomy stops and resources are needed to complete the transaction will be important. The technology will need to evolve or change to enable this. ➌ REGULATIONS. Regulations have the potential to change, too. As autonomous vehicles don’t have to sleep, the hours of service

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Autonomous may need to adjust based on the Urban Delivery level of automation the industry is Vehicles Evolve experiencing. Having autonomous vehicles on the road could also creTwo companies focused on transate a culture of more law-abiding forming autonomous last-mile food drivers. From speed limits to using and beverage delivery are Refracblinkers, there’s no human element tion and Robomart. While each has to refute a law. a unique niche that it is servicing, ➍ EMPLOYEE ROLES. Job roles both are eyeing innovative ways to enhance the customer experience are likely to change. More positions through food logistics. will be smarter versus task-oriented. And with vehicles tracked and Refraction. Headquartered in monitored remotely, there might Ann Arbor, Michigan, the company be better real-time visibility into is piloting its REV-1 autonomous delivery locations. vehicle with Miss Kim, a Korean What do autonomous vehicles restaurant in Ann Arbor. The mean for the last mile? Petersen 80-pound, tricycle-shaped vehicle notes that while trucking has its navigates city streets delivering growth opportunities in food orders from Miss Kim’s to automation, awaiting customers. Orders The shorter gap rest inside the vehicle’s shell the last between trucks mile poses during transport, while an positively alters opportunities app alerts customers when aerodynamics, for personal the REV-1 arrives for delivreduces wind cars and ery. Customers enter a code resistance and other vehicle on the vehicle and retrieve results in innovations their order. fuel savings beyond Ram Vasudevan, trucks and co-founder of Refraction, for both trucks.” platooning. says the company is using Mark Petersen, VP of temperature-controlled In the food ﬁve robotic REV-1 vehicles logistics, C.H. Robinson and beverage during its pilot with the industry, the expectation to expand last mile means the point of reliable delivery throughout the consumption. From a curbU.S. “Our vehicle platform includes side pickup to meal delivery, a multimodal suite of technology, there are many automated including cameras, ultrasound and ways to deliver food to conradar working together to navigate sumers’ doors. its surroundings,” says Vasudevan. “When delivering to con“With our small footprint (at only sumers, people are getting 80 pounds), the vehicle has shorter more comfortable with stopping distances than full-sized trusting others to handle autonomous vehicles while still and pick-out their food. In having the sensing and machine the past, it’s been emotional learning built in to understand how and often challenging to let to operate safely.” someone else take ownerHe says consumer adoption of ship—due to food safety logistics services such as Postwww.foodlogistics.com

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mates and Grubhub helps grow the interest and excitement of food delivery. However, trust in reliable delivery and at an affordable cost is of critical concern. “Automation can provide a new asset for us to address consumer concerns around traffic safety and affordability. Our solution is a mixed-use vehicle that is slightly smaller than a car but can operate in traffic lanes and also pull to the side or use bike lanes if congestion or other issues occur,” says Vasudevan. “It’s also essential to keep the price of this service affordable so that we’re not charging $100 for delivering $5 worth of food, but still earning back the cost of the robot and more.” Robomart. Ali Ahmed, founder and CEO of Robomart, Inc., acknowledges the significant investment companies are making in autonomous food delivery, spurred by Amazon’s entry into the space. Whether it’s sidewalk delivery robots or road-going autonomous vehicles, the goal is to remove the driver from the delivery equation to save on labor costs. However, those efforts may not yield the expected ROI. “Delivery only accounts for 3 percent of groceries sold in the U.S. The technologies developed for last-mile food delivery may move the needle up to 5 percent, but more than 97 percent of all grocery sales still happen in store,” says Ahmed. “Robomart is pioneering a new way to sell goods through store hailing that provides retailers with

a source of additional revenue, not just cost savings. With a button tap, the store comes to your doorstep or location where you can shop for precious goods.” The Milpitas, California-based company focused its attention on the two most signiﬁcant barriers to online grocery ordering—tangibility and cost. Ahmed says multiple studies show that the leading barrier for consumers ordering groceries online is the lack of tangibility. “Consumers don’t trust an instore associate or delivery person to pick their produce and other perishable goods,” he says. “Perishables account for 60 percent of all groceries sold—the largest category by far. However, in nearly three decades, it has never moved the needle in e-commerce sales; and the reason is tangibility. “Cost is a secondary reason but garners the majority of the attention. Most people in the food industry believe that by reducing costs, they can make last-mile delivery exponentially grow,” adds Ahmed. “We simply don’t believe that’s true. Many grocery delivery companies such as Amazon Fresh, Instacart and others have never been proﬁtable on a unit basis because using humans to pick delivered goods is prohibitively expensive.” Holistically, the end-toend process of in-store and online grocery shopping can be time-consuming for

consumers, says Ahmed. With 33 million Americans making the daily trip to the grocery store and 70 percent purchasing less than 10 items per trip, Our vehicle platform it can present many includes a multimodal inconveniences—drivsuite of technology, ing to the store, parkincluding cameras, ultrasound ing, checkout lines and radar working together to and returning home. navigate its surroundings.” Online ordering has Ram Vasudevan, co-founder, Refraction its annoyances, too— creating a shopping basket, searching individual items and quantities, price comparisons, checkout procedures and delivery wait times. “With our technology, consumers grab and go, and we automatically charge their card at the end of the shopping engagement and send them a receipt,” explains Ahmed. “The entire end-to-end process is reduced to minutes and is frictionless—which resonates with end consumers. For both sides, the retailers (our customers) and consumers, we’ve created a win-win.”

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SECTOR REPORTS

WAREHOUSING

A NEW AGE FOR VOICE PICKING F

Voice-picking technology advances for greater efficiencies and comfort for users.

or warehouse and distribution centers (DCs), efficiency, accuracy and comfort are all intertwined when it comes to productivity. Today’s voice-picking technologies aim for all three while advancing what can be achieved by employees. Food Logistics spoke to three leaders in voice-picking equipment and technology to learn the latest trends and technological innovations shaping the industry.

Ehrhardt Partner Group (EPG) Over the last 10 years, voice technology for use in the warehouse has improved dramatically, and the interest in voice has increased throughout the supply chain. A significant reason voice is now trending more in the supply chain industry is due to the

BY FOOD LOGISTICS STAFF

Voxware Augmented Reality (AR) brings voice and scanning together with vision and image/video capture—so workers can use the right technology for the task at hand and streamline work throughout the distribution center. Voxware

improvements made around voice recognition in noisy warehouse environments, says Scott Deutsch, president, Americas for Ehrhardt Partner Group (EPG). “While today’s solutions have evolved over the past decade, many voice-directed solutions still require time-consuming processes that have not changed, such as requiring workers to run through a 20- to 40-minute voice template training exercise,” says Deutsch. “However, while voice technology has improved, many of the old processes still have not, resulting in a considerable loss of time and productivity, which is especially concerning for the food industry due to the nature of their business.” EPG’s Lydia Voice 8 is the first industry voice solution to leverage deep neural networks, the same technology used by Amazon Alexa and Google Home. Deutsch says Lydia Voice 8 provides a 25-percent increase in voice recognition accuracy and eliminates the need for voice template training. “By eliminating the need for traditional voice recognition ‘training’ EPG’s Lydia Voice gives users the option to use a headset or user microphone built into a vest. EPG

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or ‘enrollment,’ onboarding new or seasonal workers is much faster. It reduces training time by days while increasing worker productivity and accuracy results,” he says. “These benefits are especially critical for the competitive grocery industry where margins are incredibly tight and the need to move perishable items quickly is imperative. Therefore, investing in a modern voice solution is now more attractive than ever as businesses can realize a cost savings of 35 percent, on average, when deploying or upgrading to a newer voice solution, in addition to increased worker productivity and accuracy results.” Moreover, just as voice technology is improving, the associated hardware is also evolving. In the past, use of voice technology required mobile devices and headsets. Now, with Lydia Voice VoiceWear, workers can perform their tasks hands-free, eyes-free and headset-free, says Deutsch. Wearing a Lydia Voice VoiceWear vest enables workers to “speak” directly into beam-forming microphones embedded in the vest. Due to increased voice recognition, the microphones hear commands clearly, while the vest provides a comfortable, ergo-

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nomically superior user experience that is headset free. “Among our clients is a large distributor of specialized food products with a nearly 120-year history. After adopting the Lydia Voice solution, they were able to eliminate paper picking and increase efficiency by 15 percent,” says Deutsch. “By voice-enabling the picking workflow, Lydia Voice provides employees with the best possible route, ensuring that dry goods are picked first and perishable items are picked last. As noted, Lydia Voice VoiceWear enables hands-free, eyes-free and headset-free picking, providing workers with a superior experience when performing their daily tasks, while eliminating headset infrastructure and associated maintenance costs for the client. “Our client’s workers have increased their productivity and have communicated that VoiceWear has provided a much more satisfying experience when picking with voice,” says Deutsch.

ProCat Distribution Technologies At ProCat Distribution Technologies, the company is tracking a couple of significant customer trends. First, is the adoption of barcode scanning technology. Distributors are demanding higher levels of accuracy from their operations, says Steve Stomel, CEO of ProCat Distribution Technologies. They are finding that by implementing software solutions that scan product barcodes at both the receiving dock and in the picking process, their accuracy is much higher. “Traditional voice systems are certainly better than paper-based picking, but barcode scanning is far more accurate than voice picking with check digits,” he says. “As a trend, distributors are looking to find ways to improve picking and receiving with scanning technology.” Second, is the adoption of GS1 barcode scanning technology. As more manufacturers learn about the capabilities and benefits of

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using GS1 barcodes to communicate package-specific information, they are increasingly adopting the technology. Stomel says this means more cases are flowing through the supply chain with barcodes that will allow distributors to confirm and/or capture data that includes expiration dates, lot numbers, random weights and more. This case-specific information is being made available to distributors for scanning on the receiving dock. “With a scan, they can confirm product available shelf life by checking expiration dates, and capture inbound lot numbers,” he says. “At point of pick, distributors can again with a simple scan, test expiration dates, capture random weights along with lot numbers with no additional time or effort required by the picking staff.” Stomel adds that scanning software can automatically extract and process the relevant information about the picked item when using GS1 barcodes. The result is higher

GS1 Data Capture eal Time Label Printing

Improving Picking Accuracy and Productivity in Warehouses Everywhere

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With hands-free barcode scanning, the PickRight solution by ProCat increases picking accuracy to over 99.9%.

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SR: WAREHOUSING

continued

productivity and near-perfect accuracy for the receiving and picking staffs. “A hands-free wearable device with barcode scanning and voice-directed prompting creates a hybrid technology that is both highly accurate and easy for warehouse employees to learn and use,” explains Stomel. “This is exactly what we have designed with our PickRight technology.” PickRight allows for immediate product veriﬁcation to assure accuracy and data collection for reporting, traceability and warehouse management. Its modular architecture design enables companies to expand technology to the entire distribution center one area at a time and also integrates with all ERP systems. “Our solutions can accommodate four to 100 order pickers, so operations can easily scale up as a company grows. Employees learn the

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PickRight system in minutes,” says Stomel. “There are no commands for pickers to memorize and the display screen prompts the employee for their next work assignment. The result is amazingly high accuracy with increased productivity. Our customers typically achieve ROI on average in nine months.” Henry’s Foods, a ProCat customer in Alexandria, Minnesota, needed to upgrade its aging voice pick system. Henry’s converted 48 order selectors from voice picking to PickRight scanning over a 30-day period, says Stomel. Order accuracy improved, and employee productivity maintained the high level that Henry’s was expecting. “The food distributor reported 100-percent ROI in under 12 months after using the PickRight system. The conversion to PickRight was a total success for Henry’s Foods,” says Stomel.

Voxware Voxware continues to see the push for automation (i.e., voice) throughout the entire distribution center, not just for picking. Keith Philips, president and CEO of Voxware, says it’s about the multimodality of the solution and providing its customers with the right technology to complete their speciﬁc tasks. “Companies need to layer in analytics. People are learning that just automating with a multimodal solution is only part of the puzzle,” says Philips. “Once you automate, you need to actively manage it effectively to get the maximum output out of the workforce.” He adds that the other trend Voxware is seeing is the emergence of natural language model voice recognition technology, which holds the promise of eliminating the necessity to train speciﬁc users into the system. “This creates huge time savings when new employees come into the organization, whether that be temporary employees during the busy seasons or new, permanent staff members,” says Philips.

PickRight’s real-time label printing eliminates the need for preprinted labels. ProCat Distribution Technologies

How are Voxware’s customers succeeding with its technology? Philips explains that one of its large, national grocery store customers had plans to open a second distribution center in a very large market. The customer automated its primary DC using a multimodal approach across multiple processes in the warehouse. It then deployed Voxware’s enterprise analytics software, VoxPilot , to actively manage the workers. “The company realized it could scale back its planned openings for additional facilities,” says Philips. “In fact, this customer canceled plans altogether for opening the second DC because of the increased throughput it realized in the primary location. This is only one example of many where our customers realized a cascade of benefits by applying voice capabilities to other workflows in the DC. “It’s important to remember that voice is not the only technology helping to bring improvements to the distribution center,” Philips adds. “By supporting multimodal technologies across all workflows, Voxware allows its clients to match specific modalities to specific tasks and individuals.” ®

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SECTOR REPORTS TRANSPORTATION

BY FOOD LOGISTICS EDITORS

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vitpho / iStock / Getty Images Plus

WHAT’S RIGHT FOR YOUR OPERATION? Start with stepwise decision-making, advise the experts.

hen it comes to trucks and product distribution, those in the food industry have three choices: use a carrier (for-hire or dedicated), own your fleet or lease your fleet. Each has its pluses, but what’s right for your operation? According to Chuck Davis, PACCAR Leasing’s director of sales, much of the decision comes down to the regularity and volume of your shipments, coupled with how much control you want with your fleet. “The first step is to determine if you really need a private fleet by asking yourself the following questions,” says Davis. “How important is it that my product arrive on time? Is my product perishable? Can I trust my operation with Owning and operating someone who isn’t fatrucks can be a very expensive miliar with my product, proposition when you factor in the or my reputation with frequency of someone who doesn’t breakdowns and know my customers?” While most trucking subsequent repairs.” fi rms are reputable, Chuck Davis, director of sales, PACCAR Leasing in some cases, Davis says your product moves on their schedule rather than yours. “And

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their drivers are not likely to know your products, routes or customers. So, if on-time delivery, and putting a face with your company isn’t critical, the trucking company option may be right for you. If, however, control of shipping is paramount to your operation and you ship often, your best option is to have direct control of your transportation, and that means either owning or leasing equipment.” According to a National Private Truck Council 2019 survey, the top reasons companies operate a private ﬂeet are customer service (by an almost 3 to 1 margin), followed by cost, capacity and control. The survey also showed that those companies measure customer satisfaction through on-time deliveries with performance windows from just 10 minutes, up to 60 minutes.

Should I Purchase or Lease My Fleet? Today, according to Davis, a high percentage of food and beverage companies include some level of leasing in their ﬂeet strategy. “Many of our customers will tell

you that they were staunch advocates of owning and maintaining their own fleet, but they’ve changed their stance over the years,” he says. “Food and beverage tends to be a very personal industry and the thought of losing any control is troubling for them. However, once they see all the possibilities of leasing, they recognize it can be a competitive advantage.” According to Davis, there are three primary considerations to keep in mind when making a lease versus buy decision: Your financial resources, the size and complexity of your fleet, and the geographic range of your operation. “As a rule of thumb, if the purchase cost of your vehicles will hinder the growth of your primary business, it’s probably a good idea to consider leasing to protect your capital,” says Davis. “A primary goal of all companies is to obtain the best financial return on its money, which includes acquiring a single vehicle or a fleet of trucks. With leasing, you’re paying for the use of the vehicle, and since you don’t own the vehicle, the residual value is

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backed out. The monthly cost is less familiar with all the costs—tangible than if you financed in ownership.” and intangible—of running a truck fleet. Keep in mind that while today’s The most recent development modern, high-tech trucks are very in the US Financial Accounting efficient on the road, they require Standards Board’s a modernized maintenance facility ASC 842 that with specialized diagnostic equiprequires all leases be on-balance ment as well as thoroughly trained sheet, which has and certified technicians.” been in effect for While the shortened development public companies cycle of new technology is delivering starting 2019, significant improvement in truck has a proposal performance and fuel efficiency, it to extend the comes at a cost of tooling, training effective date for and hiring technicians with new private companies skill sets. “Environmental strategies from 2020 to are a growing element of company 2021. While there responsibility and management of is some related fluids and other regulated compoadministration nents must be monitored to avoid burden in the bespills or leaks as well as maintain compliance,” adds Davis. ginning, it will be“Once you have a full understandcome business as usual and leasing ing of your maintenance shop, we remains attracrecommend doing a Pro Forma, which identifies all the cost of optive because the amounts capitalerating a maintenance facility—it’s something PacLease and other leasized will be significantly lower than in ownership. The asset investment ing companies do on a regular basis. decision is one of the most importThe numbers will help you decide the best way to go.” ant decisions a company can make, According to Davis, the range of so financial officers really should a fleet’s operation can also be involved. Look for lease have a major impact on the “The second companies that lease versus buy decision. consideration—size are willing to and complexity of “For instance, many of

‘tailor’ a the fleet—centers our customers lease more lease to meet than 30 vehicles. For them, around customized specifications and your specific leasing is more economical anticipated maintransportation because they distribute in a multi-state operation. A tenance costs, includneeds.” service bay 1,000-miles ing the significant Chuck Davis, director of sales, away won’t help a strandexpense of techniPACCAR Leasing cians, service facilied truck. Many leasing companies have emergency roadside ties and tooling if you operate your service programs to provide repairs own shop. Generally speaking, if you anywhere in the country, 24-hours run a small- to medium-sized fleet, a day. Owning and operating trucks leasing is often the most cost-effeccan be a very expensive proposition tive alternative since you’ll bypass when you factor in the frequency of these expenses. However, if your breakdowns and subsequent repairs. fleet is large enough to justify the expenses of your own maintenance “Leasing eliminates this worry by facility, other considerations may or taking lease customers off the hook may not make full-service leasing for these expenses, giving them the the most economical solution. advantage of a reliable, high per“Your decision will require a forming fleet as well as accurate cost thorough financial analysis, ideally accounting. And, unlike ownership, performed by an outside consultant the lease customer can accurately www.foodlogistics.com

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budget for transportation expenses over the term of the lease.”

Choosing the Right Lessor Choosing the right leasing company to work with is an important decision. You are, in effect, entering into a long-term relationship (typically three to six years) that should be beneficial Many of our customers to both parties. will tell you that they were “Leasing a truck is a bit staunch advocates of owning like buying a suit,” says and maintaining their own Davis. “You can either fleet, but they’ve buy it off the rack or changed their have it custom tailored. stance over While the suit off the rack the years.” may appear to be less Chuck Davis, director of sales, expensive, you’ll probably PACCAR Leasing be happier with the custom-tailored suit down the road. You’ll also enjoy a more professional image with a suit designed specifically with you in mind. “Look for lease companies that are willing to ‘tailor’ a lease to meet your specific transportation needs. Do you have specific load or route requirements that can be best met with a custom-spec’d vehicle? Would premium vehicles, like a Kenworth or Peterbilt, enhance your company’s image? Do you need assistance with fuel tax reporting, permits or licensing? Do you need a proven driver safety program? “It’s important for your lease sales representative to clearly understand your transportation requirements and business needs. Only then can they become a transportation partner.” Finally, Davis says a good leasing company will provide an objective lease versus ownership comparisons, including an operating and a financial analysis that includes a net present value of cash flows. “This comparison should include your company’s own numbers for the ownership option (labor, facilities, maintenance costs, cost of borrowing, and the like). It will give you the means to weigh the tangible financial benefits and the intangible operating benefits that full-service truck leasing offers versus ownership.”

OCTOBER 2019 | FOOD LOGISTICS

10/2/19 9:38 AM

SECTOR REPORTS SOFTWARE & TECHNOLOGY

BY WILLIAM SALTER

WINNING WITH A

SMARTER

DELIVERY FLEET W

In a world of consolidation, routing technology helps food distributors stay competitive.

hen it comes to honing your competitive edge, transportation management software might not be the first place you look for help; let alone route optimization technology. But, used to the full, advanced route optimization software allows your food distribution company to compete with much larger organizations by giving you a smarter, more efficient delivery fleet. That’s especially important when your competition keeps consolidating, gaining the advantages of size. Route optimization software doesn’t just cut costs by quickly and progressively reducing the number of miles driven and driver-hours paid (although it does that beautifully). It provides tools for keeping your transportation planning and delivery performance finely honed, transparent and cutting-edge in multiple ways. Some of them might surprise you. Here’s a breakdown.

Deliver With Maximum Precision Consumer demand for fresh food, on demand, has spawned a new set of distribution requirements: more frequent deliveries, unforgiving ETA precision, and margin-squeezing efﬁciency. Route optimization software factors in all variables that could impact delivery timing, to create efﬁcient routes in minutes, with highly reliable ETAs. Toronto-based catering company Marigolds & Onions adopted routing software to

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help it successfully meet a standard delivery window of just 15 minutes.

Provide Live Updates on Shipment Status and ETAs Your customers are already getting text updates about their Amazon deliveries and tracking their approaching Uber drivers in real-time. Why should food deliveries be any different? Route optimization software allows your customers to receive automated ETA emails and text alerts based on their exact communication preferences. No more anxious customers. No more “when will my order arrive?” calls. Customers who know the night before when the truck will arrive, then get another update while it is en route, can schedule staff to receive the products, clear the delivery area and make room on the shelves. Good for them, but also good for you if your drivers can arrive, unload quickly and be on their way.

Smoothly Handle Volume Spikes When demand for a product spikes unexpectedly, such as a surge in ice cream sales during a heatwave, your customers want to capitalize on the opportunity. For you, that may involve a reallocation of trucks and drivers on very short notice: that’s all white noise to retailers. They want the revenue— and they want agile supply chain partners that can help them get it. If you don’t have the tools to re-

spond quickly and methodically, frustrated customers may turn to your larger competitors for better service. Advanced route optimization software allows you to plan routes fast and plan dynamically. Creating detailed route plans in minutes means you can flex to accept changing orders until much later in the day. The software also helps you manage regular increases in volume, for events such as Thanksgiving or the Super Bowl. If you can accurately predict peak order volumes based on historical data, route optimization software can handle the rest—ensuring you make the most efficient use of drivers and equipment so that demand peaks are profitable for your customers and for you.

Prevent Fleet Operating Costs From Escalating Every extra dollar spent on fleet operations is a dollar of profit lost—a big deal in the margin-thin food distribution business. The largest food distributors leverage sophisticated technology to manage their fleets, trimming 10 percent to 30 percent off total fleet operating costs. And so can you. Routing software is a slam-dunk case of computers figuring out the thousands of possible combinations of orders, locations, trucks, drivers and time-windows far better than even the smartest human. For

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example, after automating its route planning process, national LTL carrier Frozen Food Express reduced its 660-vehicle delivery ﬂeet by a full 10 percent. Of course, route optimization software costs money, but the typical ROI is 3 to 12 months. After that, all the savings go right to the bottom line, and keep coming.

Ensure the Route Plans are Being Followed Route optimization software isn’t just about planning; when it interfaces with data from a telematics system, you can also compare what is happening out on the road with the plan, as it happens. Most advanced routing software will do this. With the ability to compare planned versus actual in real time, you can respond efﬁciently to problems or delays as they arise, and alert customers to ETA changes. At the end of the day, you can learn exactly when and where routes deviated from plan and ask the driver to explain why, during his or her debrief. Maybe the staff at a convenience store weren’t able to leave the until the driver arrived. Maybe a big-box store’s receiving dock is snarled ﬁrst thing every morning. Maybe the driver or dispatcher is skeptical of whether computer-generated plans will work “in the real world,” prompting a different route. It’s important to know.

Strategize by Asking “What If?” Questions

risen, so have complexity and costs. You need to be constantly thinking about what’s next—because your customers, and your competitors, most certainly are. The good news is that route optimization software can help with strategy. It includes tools that simplify the process by calculating the cost and service impacts of business changes—before you make them. What if you changed the size or type of trucks in the ﬂeet? What if you moved your warehouse to a new location, or opened a new one? What if you extended order cutoff times? The right software can model every last implication of such changes, and do so within minutes, before you spend a dime.

they have. Those that don’t will lose customers, develop a poor reputation and eventually fold. The second key to profitable growth is to make sure any new business you bring on is actually worth having. Sure, your team might be congratulating itself on signing a big new customer, but someone needs to ask whether the account will be profitable. An accurate cost-to-serve estimate can’t be answered by entering numbers into a spreadsheet, because no spreadsheet can handle the complexity involved. Advanced route optimization software considers all the relevant factors in order to calculate a highly accurate cost-to-serve—before a single truck leaves the dock. In this way, you can ensure new business drives both revenue and profit.

Grow With Confidence (and Profits)

It’s About More Than Food

Without business growth, any company is destined for a slow death. The only question is how long it will take. A technology-enabled distribution operation aids profitable growth in a couple of important ways. The first is retention. Food distributors that deliver efficiently and on time will keep the business

For food manufacturers and distributors, it’s no longer just about the food. Competitive leverage is gained or lost based on how efﬁciently you get that food to market. It’s here that many small- and mid-sized businesses have failed to adapt, ignoring the opportunity to use technology to compete with the big boys. Don’t be one of them.

William Salter is president and CEO of Paragon Software Systems, Inc, and managing director of its parent company Paragon Software Systems plc, a leading provider of routing and scheduling optimization software solutions.

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OCTOBER 2019 | FOOD LOGISTICS

10/2/19 10:46 AM

SECTOR REPORTS OCEANS & PORTS

BY DANIEL COOKE

PROVIDING

FRESHER

FRUIT Americold and the Port of Savannah boost cold chain capabilities for perishable shippers.

Daniel Cooke is the marketing director for Americold.

bout five years ago, then-PortFresh CEO Brian Kastick had a brilliant idea—what if Georgia’s Port of Savannah could be used for importing fresh fruit and vegetables? Kastick, who became a key account executive with Americold when the company acquired PortFresh in January 2019, had been importing onions from Peru through the Port of Philadelphia, but it had never been done through the South Georgia port. The reason? Before 2014, the U.S. Department of Agriculture did not allow it. Ninety-five percent of the imported fruits and vegetables entering the U.S. East Coast came through Northeast ports and were trucked to customers in the Southeast and points beyond. The reason Southeast ports were bypassed? Too risky. The Mediterranean fruit fly could not survive in the climate of the U.S. Northeast, but could in the Southeast, and that meant the pathogens it carries could also enter the country. At the time, there were no plans, processes, or local infrastructure in place to alleviate the pest in the Southeast,

FASTER The Georgia Ports Authority plans to double capacity at Garden City Terminal to 11 million TEU per year. In fiscal year 2019, port related industries announced $5 billion in new investment and 12,000 new jobs coming to Georgia.

so a blanket directive restricted chilled fruit and vegetable imports.

Florida, Philadelphia/New York, and LA/Long Beach,” notes Logan. “Since 2015, the U.S. Department of Agriculture has allowed the Port New Rules, of Savannah to serve as a new entry New Routes point for cold-treated produce.” Georgia Ports Authority’s Chris Previously, “Cargo undergoing Logan, senior director of trade cold treatment had to complete the development, beneficial cargo process and be certified owner sales, explains At the Americold prior to arrival in Savanthat, “For chilled PortFresh nah. This meant addicargo importers that campus, product tional days of transit and aim to serve the U.S. is offloaded reductions to shelf life,” Southeast, speed to from containers he says. However, “The market and the cost directly into a new rule allows produce of overland transit have been traditional 100-percent destined for Southchallenges.” refrigerated east markets to avoid third-country layovers. The introduction of facility, so it And, because Savannah is the USDA’s Southeast never sits in nonhundreds of miles closer In-Transit Cold Treatrefrigerated space to major Southeastern ment Pilot program and the cold chain markets such as Atlanta, about four years ago is never broken. landing chilled cargo at started to change that, Garden City Terminal cuts however. transportation times by five to sev“The previous regulatory envien days. The shorter transit saves ronment required produce from fuel and reduces emissions.” South America to enter the U.S. Logan adds, “This opens the door through one of three regions: South

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SR: OCEANS & PORTS

invested in a 182-acre parcel of land within 20 miles of the port, with direct road access and rail potential. He built a modern chilled storage facility with 6,500 pallet positions and state-of-the-art cold treatment, fumigation, repack and inventory management systems, all under one roof. PortFresh was born, and the region gained a facility with the ability to pack and ship shelf-ready fruits and vegetables, from boxed to bagged, as well as inventory reporting to customers as required. At the outset, the PortFresh team secured a contract with a massive international grocery and convenience megastore chain, setting itself up for success.

continued

Reefer containers stacked at the Port of Savannah.

for more customers—including large retailers and producers— to take advantage of faster, more cost-effective transit options to serve U.S. consumers with fresher produce via the Port of Savannah.” GPA’s expanding chilled cargo portfolio includes South American blueberries, mangos, citrus, grapes, avocados, bananas, apples, pears and plums, as well as fresh fruit and vegetables from speciﬁc growing

Location, Location, Location regions in Morocco, Italy and Spain. Following the USDA’s authorization allowing the Port of Savannah to serve as an entry point for cold-treated produce, Kastick

Today, the Americold PortFresh Savannah campus is growing at a rapid rate. Now a part of Americold’s integrated facility network, the local team works closely with

Because

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the Port of Savannah and with a growing list of perishable import customers. For its biggest customer, the company handles dozens of lines of fresh fruits and vegetables, including onions, asparagus, grapes, citrus, avocados, apples, pears, kiwi, peaches, plums, and nectarines. The Port of Savannah is impressive too. It’s the largest single-terminal container port in the northern hemisphere. The port handles just under 40 services a week and moves about 12,000 containers a day in and out, and the port authority recently dredged the Savannah River so that the largest container ships can access the port. But perhaps the port’s best feature, for international produce providers, is its location. It’s one of the first available U.S. ports of call for vessels coming through the Panama Canal or from the east coast of South America. For growers, one of the advantages of the closer port is extended shelf life and a greater percentage of saleable product as a result of products being available sooner. At the Americold PortFresh campus, product is offloaded from containers directly into a 100-percent refrigerated facility, so it never sits in non-refrigerated space and the cold chain is never broken. In addition, the Americold PortFresh campus is entirely new, designed from the ground up with all the value-added services needed to send and receive fresh produce fast, all under one roof. For example, grapes leave Chile, travel two weeks across the ocean to Savannah, GA, offload into the perfectly cooled Americold PortFresh warehouse and within a week are in the grocery store. Because Savannah is hundreds of miles closer to major Southeastern markets such as Atlanta,

landing chilled cargo at Garden City Terminal cuts transportation

Thanks to the pioneering work of the Americold PortFresh team and Brian Kastick, more and more importers are realizing the viability of the Port of Savannah connection. Italian Kiwi and Argentinian pears are coming into Savannah for the ﬁrst time, joining the list of fresh food arriving from other parts of the world into the thriving Southeastern port daily.

And in its latest expansion phase, the Americold PortFresh campus is adding a frozen temperature facility to support food and protein exporters through the Port of Savannah. Slated to be completed in the spring of 2020, the 37,000plus pallet position facility will offer a complete portfolio of services, including one of the highest volume blast-freeze capabilities in the country.

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times by five to seven days.

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OCTOBER 2019 | FOOD LOGISTICS

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FOOD (AND MORE) FOR THOUGHT

BY ALEXA BERNARD

PERMACULTURE’S LINK in the Global Food Supply Chain I

WDnet / iStock / Getty Images Plus

BERNARD

n his ﬁnal report to the United Nations Human Rights Council in 2014, following a six-year term as special rapporteur on the right to food, Olivier De Schutter called for the world’s food systems to be radically and democratically redesigned. “Objectives, such as supplying diverse, culturally acceptable foods to communities, supporting smallholders, sustaining soil and water resources, and raising food security within particularly vulnerable areas, must not be crowded out by the one-dimensional quest to produce more food,” he urged. Permaculture is playing an increasingly important role in this necessary redesign. It goes far beyond organic farming in that it takes into account an entire ecosystem (e.g., the ways in

which the wind blows and water ﬂows, along with the plethora of life forms contained in the soil and all the way to the upper canopy). It operates as a food forest layered with annual and perennial herbs and vegetables, and multi-purpose shrubs and trees.

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Animals are foraging and fertilizing, while pollinators are safe and rewarded. Food, ﬁber and fuel exist in a smorgasbord of diversity that is inherently beautiful and inviting. A whole—or closed—systems approach is a key characteristic of permaculture. For example, the natural carbon cycle is a central component, whereby waste from plants and animals become fertilizer for new plants. Natural energies from wind, dust, leaves and even bird droppings contribute to the closed system. Rather than rows of plantings, permaculture’s whole systems approach resembles a food forest where plants are allowed to seed and are interplanted for pest control. Once it is established, this system requires minimal labor and the nutrients become self-sustaining, while pests and disease are kept in check with vibrant resiliency. Furthermore, indigenous and traditional knowledge, and the immense cultural heritage of a vast variety of heirloom seeds are cherished, saved and integrated. It’s inherently local as food production is close to the consumer and people likewise invest time to maintain the permaculture “farm.” According to the Millennium Ecosystem Assessment (www.millenniumassessment.org), agriculture is the No. 1 man-made threat to global biodiversity and ecosystem function. Indeed, permaculture can remedy the unintended conse-

quences of the world’s industrial agricultural systems. It can help to sequester carbon and resurrect water tables; reinvigorate and empower local communities; decontaminate, protect and build soil; and restore habitats for wildlife. Admittedly, it’s unrealistic to expect that permaculture will replace industrialized agriculture. However, what is achievable is greater awareness and embrace of permaculture as an important component of global food supply production—which will be tasked with feeding 9 billion people by 2050—and part of the larger solution to addressing food insecurity throughout the world. From my perspective, I’m encouraged by the rise of food sovereignty movements across the globe, which in turn gives the food industry the freedom and momentum to reinvent itself and become a positive force in the blossoming of a new era. My advice is to learn from these grassroots movements, support them and be allies in policy matters. Be inspired. Permaculture’s whole systems approach is a template for the kind of holistic thinking that is required from us today. We cannot have food security if we do not address water supply and quality. We cannot have food democracy if we do not address the social injustice issues that de-possess people from the land. It’s been said that permaculture is “the art of designing beneﬁcial relationships.” In this regard, it shares the hallmark of today’s most successful and admired supply chains.

Alexa Bernard is a permaculture designer, activist and teacher specializing in the emergent ﬁeld of social permaculture. Currently residing in the Paciﬁc Northwest, she can be reached at permacamper@gmail.com.

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