Food Logistics June 2016

CUTTING WAREHOUSE ENERGY COSTS

NEW OCEAN SERVICE FOR PERISHABLES

CYBER CRIME

SUSTAINABLE TRANSPORT OPTIONS

Food Logistics

SEAFOOD LOGISTICS

DIFFICULT CONDITIONS MAKE IT ESPECIALLY CHALLENGING

THE 2016 FOOD LOGISTICS

TOP GREEN PROVIDERS Our annual list depicts companies, products and technologies that are supporting sustainability throughout the global food and beverage supply chain.

2016 TOP PROVIDERS

®

Global Supply Chain Solutions for the Food and Beverage Industry

SUSTAINABLE FOOD: THE SUPPLY CHAIN HOLDS THE KEY TO SUCCESS

Issue No. 177 June 2016

FoodLogistics.com

R

Logistics

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ON THE MENU

COLUMNS

JUNE 2016 ISSUE NO. 177

FOR STARTERS

Green Acres Is the Place to Be 6

COVER STORY

Sustainable Food: The Supply Chain Holds the Key to Success

From the growing popularity in agrihoods to vertical farming solutions offered by companies like Freight Farms, sustainability advancements continue to inspire.

As food companies commit to sustainability initiatives, supply chain visibility takes on more significance.

COOL INSIGHTS

Six Supply Chain Best Practices for TemperatureSensitive Freight 12

14 SECTOR REPORTS WAREHOUSING

34 How to Keep the Lid on Warehouse Energy Costs

Enhancements bring more choices in managing one of the hardest to manage expenses.

OCEAN CARRIERS & PORTS

Expanding Perishables Trade Generates New Transportation Options 36

SPECIAL REPORT

2016 Top Green Providers List 20

Taking an active role in promoting sustainability throughout food and beverage operations is crucial considering the urgency to reduce the food chain’s carbon footprint and preserve the already thin profit margins.

FEATURES

THIRD-PARTY & REFRIGERATED LOGISTICS

18

Seafood Logistics

Demanding logistics requirements, combined with difficult weather and environmental conditions, make seafood logistics especially challenging.

SeaLand’s Atlantico service connects Mexico with the Northeast U.S.

Mitigating risk, avoiding spoilage and complying with regulations is the goal.

FOOD (AND MORE) FOR THOUGHT

How Can We Manage Demand for Fresh Food in Asia Sustainably?

44

Asia’s growing population and demand for fresh foods expose inadequacies in the region’s cold chain infrastructure.

DEPARTMENTS

Supply Scan 10 Food on the Move 43 Ad Index 8

TRANSPORTATION

New Inroads in Sustainable Transportation 38

Alternative fuels make headway despite some improvement in diesel prices, bringing more options for sustainable fleets.

SOFTWARE & TECHNOLOGY

Technology’s Downside: Cyber Crime 40

All businesses are at risk, but hackers sometimes target supply chains.

WEB EXCLUSIVES • Nestle Breaks with the Food Industry, Supports Government’s Sodium Reduction Targets foodlogistics.com/12204575

• E-Commerce Growth Drives Up U.S. Warehouse Rental Rates foodlogistics.com/12208700

• Food Logistics’ Educational Webinar Series foodlogistics.com/webinars

Published and copyrighted 2016 by AC Business Media Inc. 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 Inc., 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices.

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FOR STARTERS

FROM THE EDITOR’S DESK

GREEN ACRES IS THE PLACE TO BE

A SOWINSKI

6

mong the many inspiring sustainability stories I read recently, two really stand out for me. One is the growing interest in agrihoods—communities designed around farms—that are popping up from Virginia to Arizona to California.

Developers are realizing there is less demand for homes on golf courses with their high operating costs and concerns over water shortages. Instead, families and retirees alike are finding that a home down on the farm has real advantages, such as access to locally grown produce, as well as closer connections to the land and neighbors.

The farm-centered community Serenbe, near Atlanta, Ga., celebrated its 10-year anniversary earlier this year. Serenbe features blueberry bushes at all of the crosswalks, three on-site restaurants and a seasonal farmers market.

Across the country in Davis, Calif., a new development called The Cannery opened last August with plans to grow into a 547-home community. Its farm grows tomatoes, sunflowers and corn, which are harvested by volunteers and donated to a food bank.

Most of the agrihoods have professionals working the land, but residents can pitch in as much as they want, while some models have residents doing the farming themselves.

Freight Farms is doubling down on sustainability. The company takes used shipping containers and

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modifies the inside to create a vertical farm for producing hydroponically grown plants and vegetables year-round. They’re high-tech, too, with automated lighting, watering and nutrient feeding, while climate controls maintain the perfect environment.

A single Freight Farm starts at $82,000. The company is targeting restaurants, grocers and wholesalers eager to satisfy rising demand for fresh, local produce. School systems and corporate campuses that are interested in integrating sustainable food production into their core business models are another market. Google’s campus in Mountain View, Calif., and Stony Brook University on Long Island both have Freight Farms.

The company says many customers grow high-turnover, compact crops like lettuce, kale, cabbage and Swiss chard, along with an array of fresh herbs, and sell them to local restaurants, grocers and community markets.

I haven’t seen one yet, but no doubt there’s a bumper sticker out there that says, “My other car is a John Deere tractor.”

Along with other green-themed content in this issue, you will also find our 2016 Top Green Providers. Congratulations to those who earned a spot on this year’s list.

Enjoy the read.

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

DETAILS

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WWW.FOODLOGISTICS.COM PRINT AND DIGITAL STAFF Group Publisher Jolene Gulley Associate Publisher Judy Welp Editorial Director Lara L. Sowinski lsowinski@ACBusinessMedia.com Editor Ronnie Garrett rgarrett@ACBusinessMedia.com Managing Editor Elliot Maras emaras@ACBusinessMedia.com Associate Editor Carrie Mantey cmantey@ACBusinessMedia.com Web Editor Eric Sacharski esacharski@ACBusinessMedia.com Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com Creative Director Kirsten Crock Senior Audience Development Mgr. Wendy Chady Audience Development Mgr. Angela Kelty ADVERTISING SALES (800) 538-5544 Associate Publisher (East Coast) Judy Welp (480) 821-1093 jwelp@ACBusinessMedia.com Sales Manager (Midwest & West Coast) Carrie Konopacki (920) 542-1236 ckonopacki@ACBusinessMedia.com National Automotive Sales Tom Lutzke (630) 484-8040; tlutzke@ACBusinessMedia.com EDITORIAL ADVISORY BOARD Smitha G. Stansbury, partner, FDA & Life Sciences Practice, King & Spalding Raymond J. Segat, director, cargo & business development, Vancouver Airport Authority Dr. Barbara Rasco, professor and interim director, School of Food Science, Washington State University Adriano Melluzo, vice president, national sales, Ryder CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (800) 543-5055 Email: circ.FoodLogistics@omeda.com LIST RENTAL Elizabeth Jackson, Merit Direct LLC (847) 492-1350, ext. 18, Fax: (847) 492-0085 Email: ejackson@meritdirect.com REPRINT SERVICES Carrie Konopacki (920) 542-1236 Fax: (920) 542-1133 ckonopacki@ACBusinessMedia.com AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich Executive Vice President Kris Flitcroft CFO JoAnn Breuchel VP Content Greg Udelhofen VP Marketing Debbie George Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas

Published and copyrighted 2016 by AC Business Media Inc. 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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SUPPLY SCAN

NEWS FROM ACROSS THE FOOD SUPPLY CHAIN

The U.S. Food and Drug Administration (FDA) finalized a new food safety rule under the Food Safety Modernization Act (FSMA) that will help prevent wide-scale public health harm by requiring companies to prevent intentional adulteration of the food supply.

Under the new rule, both domestic and foreign food facilities, for the first time, are required to complete and maintain a written food defense plan that assesses potential vulnerabilities to deliberate contamination when the intent is to cause wide-scale public health harm.

Facilities now have to identify and implement mitigation strategies to address these vulnerabilities, establish food defense monitoring procedures and corrective actions, verify that the system is working, ensure that personnel assigned to these areas receive appropriate training and maintain certain records.

Food manufacturers are required to comply with the new regulation within three to five years after the publication of the final rule, depending on the size of the business.

LISTERIA OUTBREAK EXPANDS PRODUCE RECALL

CRF Frozen Foods A look at the disease transmission factors associated with Listeria monoLLC expanded a cytogenes point out some unique and voluntary recall of difficult problems that can confound frozen organic and Centers for Disease Control controls. non-organic fruits and vegetables because of possible health risks, according to CNN. The company issued the recall in cooperation with the U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) because the products may be contaminated with Listeria.

CRF said the CDC notified it that seven people from three states became ill and were hospitalized due to Listeria. Some of these illnesses were linked to consuming CRF-manufactured or CRF-processed products.

SCIENTISTS: GENETICALLY ENGINEERED FOOD IS SAFE

The first genetically modified food to hit the market 22 years ago was a tomato that did not win any taste tests.

But it did pass the food safety test and genetically engineered food ever since turned out to be as safe as any other, according to Food Safety News. The National Academies of Science, Engineering and Medicine found—based on 900 studies and reviews of the disease data out there—that there is no evidence of human health effects from the embrace of genetically modified crops.

While moving food safety of the genetically modified crops into the settled science category, the panel left plenty on the table to fight about. There’s disagreement about whether the herbicide glyphosate, often sold with genetically modified seeds, may cause cancer; and about how genetically engineered fields may be impacting weed growth, pest growth and crop yields. The report also supported the need for transparency of genetically modified organisms associated with specific foods.

FDA MODERNIZES NUTRITION FACTS LABEL FOR PACKAGED FOODS

The U.S. Food and Drug Administration (FDA) refurbished its Nutrition Facts label to make sure consumers have updated nutritional information for most packaged foods sold in the United States. The new label will include the following: • An updated design to highlight calories and servings.

• Requirements for serving sizes that more closely reflect the amounts of food people currently eat.

• Declaration of grams and a percent daily value (%DV) for added sugars to help consumers know how much sugar was added to the product.

• Dual-column labels to indicate both per-serving and per-package calorie and nutrition information for certain multi-serving food products that could be consumed in one sitting or multiple sittings.

• Calories and other nutrients to be required to be labeled as one serving for packages that are between one and two servings.

Image courtesy of the FDA at www.fda.gov.

FSMA INTENTIONAL ADULTERATION RULE IS FINAL

Image courtesy of the CDC at www.cdc.gov.

Daily Updates at FoodLogistics.com

APP MANAGES FARM FRESH DELIVERIES IN SECONDS

A startup called Souper Seconds developed an app that allows manufacturers to purchase food directly from a supplier, avoiding lengthy conversations relating to availability, transportation and payment.

After produce is purchased in the app, Souper Seconds locks in a requested driver and the food arrives at the wholesale buyer’s location within its requested delivery window. In essence, it is a produce-buying market platform for wholesale accounts that offers convenient, farm-direct and easy-to-order products.

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Most food manufacturers will be required to use the new label by July 26, 2018. Manufacturers with less than $10 million in annual food sales will have an additional year to comply with the new rules.

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

IMO CALLS FOR THREEMONTH GRACE PERIOD ON CONTAINER WEIGHT RULE

The Maritime Safety Committee (MSC) of the International Maritime Organization (IMO) advised port control authorities to take a “practical and pragmatic approach” when enforcing Safety of Life at Sea (SOLAS) container weight requirements for a period of three months after July 1. The committee noted some leeway should be provided in order for any problems resulting from software updates, required for the electronic collection and transmittal of verified gross mass data, to be rectified without causing delays to containers being loaded.

WAL-MART TESTS DRONES

Wal-Mart is testing drones inside its distribution and fulfillment centers, believing the technology could be rolled out in six to nine months as a way to check inventory more efficiently to keep up with customer demands, according to Arkansas Online. The retailer

recently provided a peek of its use of the technology during a media tour of its Bentonville, Arkansas distribution center. The drone is fully automated, but was manually controlled during the demonstration as it flew up and down warehouse shelves, captured images and determined whether products were in the right place in the distribution center.

TARGET CRACKS DOWN ON SUPPLIERS, INVESTS BILLIONS IN SUPPLY CHAIN

Target Corp. is cracking down on suppliers as part of a multi-billion dollar overhaul to speed up its supply chain and better compete with rivals, including Wal-Mart and Amazon, according to Reuters. The company plans to tighten deadlines for deliveries to its warehouses, hike fines for late deliveries and could institute penalties of up to $10,000 for inaccuracies in product information, according to a letter sent to suppliers and obtained by Reuters, and an interview with Target’s chief operating officer (COO), John Mulligan.

The moves, which went into effect in May, are the first major steps Target took since Mulligan was appointed as COO late in 2015 to fix supply problems that emerged after it expanded product offerings, including fresh food, several years ago.

GREAT LAKES PORTS SUE COAST GUARD OVER PILOTAGE RATES Image courtesy of the American Great Lakes Ports Association’s Facebook page at www.facebook.com/ American-Great-Lakes-Ports-Association.

An alliance of U.S. Great Lakes ports, vessel-operating companies and maritime trade associations filed suit in the U.S. District Court for the District of Columbia, challenging the U.S. Coast Guard’s 58 percent increase in Great Lakes pilotage rates.

Under federal law, all oceangoing vessels on the Great Lakes-Saint Lawrence Seaway System must hire local pilots—navigators familiar

with local conditions—to assist with navigation. The Coast Guard regulates and sets rates for Great Lakes pilotage. The coalition argues that the Coast Guard violated the Administrative Procedure Act by making “arbitrary and unsubstantiated decisions during development of the 2016 pilotage rates.” The plaintiffs asked the court to remand the rulemaking back to the Coast Guard for revision.

DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Buck-a-Mile Backhauls Live on By Mark Montague Mark Montague is an industry rate analyst for DAT Solutions, which operates the DAT network of load boards and the RateView rate-analysis tool. He has applied his expertise to logistics, rates and routing for more than 30 years. He is based in Portland, Oregon.

For more information, please visit www.dat.com.

10

Four years ago, I wrote a post titled The Death of the Buck-a-Mile Backhaul for our company blog.

At the time, those cheap hauls seemed to be going away. In March 2012, only one major van lane paid the carrier $1 per mile: Philadelphia to Chicago, at 48 cents for the line-haul portion, plus a fuel surcharge of 52 cents.

Of course, truckers were spending more than $4 a gallon for diesel in 2012 and a lot of other costs had risen well above historical levels. Truckers were turning their noses up at dollar-a-mile freight and rightfully so.

Today, the price of fuel is way down and so is the average fuel surcharge (which is

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around 17 cents for vans). But insurance, labor, equipment and other operating costs are up. Operational costs couldn’t be covered at $1 a mile in 2012 and they can’t be covered now.

Yet, I regret to say, the buck-a-mile backhaul persists on United States truckload lanes.

During the week that ended May 21, the average spot van rate out of Denver was $1.09 a mile, with Denver to Stockton paying 91 cents. Chicago to Los Angeles paid $1.04 amid stiff competition from rail.

Dallas to Los Angeles paid $1.05; Atlanta to Los Angeles was $1.11; Allentown, Pennsylvania to Chicago was an even $1—

every region of the country had a major van lane where the average was in the vicinity of a buck a mile.

Rates did not rebound as expected this year and truckers are feeling the squeeze.

Spot van rates were 19 percent lower in April than they were in April 2015. Reefer rates were down nearly 16 percent.

With the cost of diesel now rising, expect spot rates to climb. But any added margin will go into the tank and not the bank.

Since the buck-a-mile backhaul lives on, use it to your advantage: Taking a low rate for a relatively short distance can be a smart move if you can use it to reposition your truck for better opportunities. Check your load board and pair that low-paying lane to a high-paying head haul. Here’s hoping that better times are on the way.

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• Decreasing paper and packaging waste with an innovative machine that designs each container to fit its contents precisely • Recycling paper, plastics, electronics, batteries, and other materials DSC launched our network-wide sustainability program in 2009 and since then, we’ve won 22 awards for initiatives that conserve resources and reduce costs.

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COOL INSIGHTS

BY MARK PETERSEN

SUPPLY CHAIN BEST PRACTICES for Temperature-Sensitive Freight

T PETERSEN

emperature-sensitive freight requires an additional level of urgency and complexity.

A poorly managed cold chain with delays in its timeline, or a lack of consideration for spoilage risk, can lead to serious issues and even profit loss. By implementing the following best practices, shippers can maintain a strategic cold chain by mitigating risk and taking better control of the final outcome.

1

Secure the Right Expertise

Enlisting trained temperature control specialists can help ensure the safe transportation of temperature-sensitive freight. A qualified expert should understand the importance of the relationship between the carrier and shipper, and the business from all sides, so he or she can solve potential problems. Look for specialists who recognize ways to balance unattractive load qualities with strategic initiatives to benefit both the carrier and the shipper.

All key stakeholders must agree on set expectations and tasks for each of their roles before any shipments are moved. Every detail of the process must be discussed beforehand. Set tasks help avoid confusion and questions when timing is critical, and clear expectations can help minimize breaks in the cold chain.

4

Share Responsibility when Loading and Unloading

heck for proper C container airflow.

The way pallets are stacked can affect airflow; blocked air may cause hot spots or cold zones. Shippers should oversee loading to ensure there is sufficient space for air to pass between pallets, walls, air chutes, the ceiling and the floor.

5

Balance Cost and Technology

Advanced temperaturecontrolled equipment, and the ability to move beyond basic track-andtrace technology to real-time monitoring is greatly impacting global cold chains. However, technologies such as global positioning system (GPS) tracking and temperature sensors come at a high price. This is why it’s important to consider the importance of balancing cost effectiveness and technological advances. For example, hardier products could be shipped for less with less monitoring.

Determine Capacity Requirements

Loading and unloading product can be a critical and complex point in a temperature-controlled supply chain. Not only does the temperature of the truck need to be maintained, shippers and carriers must also share responsibility for the temperature of the loading dock, outdoor weather conditions, and the time it takes to load and unload product. Below are three main checkpoints for both parties:

Whether temperature-sensitive goods are traveling by road, ocean, air or rail, each service comes with a unique set of factors, and balancing the pros, cons and price of each is critical. By considering the needs of carriers, shippers can help mitigate higher costs and secure the right capacity. For example, if a shipper moves full truckloads of cheese to local retailers, it may be able to have the carrier move empty cartons on the backhaul, which not only solves a reverse logistics problem, it also helps reduce transportation costs.

Confirm product temperature.

Prior to accepting loads, carriers should double-check the temperature.

Temperature-controlled shipping requires strict standard operating procedures (SOPs). All SOPs should outline three main points: who is responsible, what needs to happen, and how checks and balances occur.

Inspect the condition of equipment.

Prior to loading product, a thorough inspection of equipment by both the carrier and shipper can verify it’s in good working order.

Shippers should pay attention to any factors that could impact the effectiveness of the refrigeration, such as tears in chutes.

As director for Robinson Fresh transportation services, Mark Petersen develops the strategy for temperature-controlled service offerings and drives initiatives for targeted verticals in retail, foodservice, wholesale and agriculture. Petersen has more than 20 years of experience in the broader supply and demand chain.

2

12

3

Set Clear Expectations Early

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6

Establish SOPs

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COVER STORY The Next Frontier in Sustainability

BY ELLIOT MARAS

SUSTAINABLE FOOD: THE SUPPLY CHAIN HOLDS THE KEY TO SUCCESS

As food companies commit to sustainability initiatives, supply chain visibility takes on more significance.

While the actions may take place at farms and in manufacturing facilities,

it is up to supply chain professionals to determine where and how much to source raw materials.”

Pan Chen, HAVI Global Solutions

14

BY ELLIOT MARAS

E

very year, the food supply chain becomes more sustainable, based on numerous reports that track such initiatives. Food manufacturers, distributors and retailers tout their achievements in annual sustainability reports. While the various players hone their efforts, the companies that facilitate product movement—logistics service providers—play a more important support role, particularly in the area of supply chain visibility.

But are these initiatives enough to meet the challenges of a growing population, climate change and declining agriculture? Are there uniform measures by which companies, governments and organizations can monitor progress in improving sustainability? What is the supply chain’s role in addressing these challenges?

Many of the sustainability challenges—such as water use, deforestation, genetically modified organisms (GMOs), treatment of workers, declining farm space, investment in agriculture—fall more on agriculture and processing than on the movement of food. Several observers argue, however, that the supply chain plays an increasingly critical role as companies recognize the importance of supply chain visibility in improving sustainability.

“Sourcing raw materials is a huge part of the supply chain function,” says Pan Chen, vice president of business analytics at HAVI Global Solutions, a supply chain consultancy. “While the actions may take

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place at farms and in manufacturing facilities, it is up to supply chain professionals to determine where and how much to source raw materials.”

To this end, HAVI explores opportunities to reduce waste through more dynamic supply chain optimization, Chen says. “This includes determining the most favorable geographic layout of supplier locations, manufacturing facilities, forward warehouses and DCs to maximize efficiencies. And when market conditions change, and there are fluctuations in demand and availability of supply, we adapt the supply chain accordingly and make adjustments in real time.

Getting the underlying infrastructure right to provide the type of transparency that consumers need should be a priority.”

Skip Miller, vice president of customer service and solutions at CHEP, a global provider of container and pallet pooling services, told a group of consumer goods industry executives earlier this year that the best way to identify small changes that can power savings and growth is for trading partners—manufacturers, retailers, growers and suppliers—to evaluate their supply chain to identify gaps, overlaps and inefficiencies. Once those inadequacies are identified through supply chain mapping, experts can develop solutions that help save money, and improve efficiency and sustainability.

CHEP, for its part, collaborated with customer supply chain experts to identify inefficiencies in the sup-

ply chain and to develop cost-effective solutions. These efforts include the following use cases: • A wholesale company improved dock space and transportation efficiency by eliminating multiple platforms and vendors.

• A beverage manufacturer saved $500,000 annually by changing its primary and secondary packaging.

• A Canadian retailer saved $75,000 annually by streamlining the handling and transportation of fresh produce from the United States, Mexico and South America.

Key Challenge: Visibility A key sustainability challenge is improving visibility throughout the supply chain.

The Sustainability Consortium’s 2016 Impact Report found that, for the majority of consumer goods, manufacturers lack visibility into the sustainability performance of their supply chains. This lack of visibility is a key barrier to improvwww.foodlogistics.com

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ing sustainability. The consortium is administered by Arizona State University and the University of Arkansas, with support from Wageningen University in the Netherlands.

Food and agriculture products have the highest share of impacts upstream (typically on farm) where visibility is extremely low, the

The need to improve supply chain visibility resulted in a variety of initiatives. Growers, processors and packagers adopted various metrics for improving sustainability. The regulatory community, responding to consumer concerns about the environment, nutrition, safety and social justice, creates even more challenges.

New Challenge: GMOs

consortium noted. Only 20 percent of survey respondents collected data on fertilizer usage, greenhouse gas emissions and soil erosion. This represents a potential risk, but also an opportunity to improve both cost and sustainability.

Consortium data also indicated that in the berry, apple and grape categories, nearly two-thirds of survey respondents could determine whether their suppliers sourced crops from farms with zero conversion of high conservation value or high carbon stock lands in the past five years.

Conversely, less than one-quarter of pork, chicken, beef, dairy and egg suppliers could make that same determination for their feed supply.

Less than half of the companies purchasing palm oil could report what percentage of their supply was certified by the Malaysia-based Roundtable on Sustainable Palm Oil or an equivalent organization; and even among those that could, less than half purchase 100 percent certified palm oil.

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GMOs emerged as one of the most contentious food industry issues as a slew of retailers and manufacturers decided to label products as non-GMO in response to consumer concerns about the safety of GMOs. The voluntary labeling created controversy within the food industry as some companies viewed this as an appeasement to bad science, while others saw it as addressing consumer concerns.

Still others viewed the actions as responding to both existing and pending regulations.

Pamela Bailey, president and CEO of the Grocery Manufacturers Association (GMA), told the GMA Science Forum in April that the GMO label rule in Vermont is the impact of non-science-based policies. Bailey told the forum that studies show genetically engineered products are safe and consumers have more confidence in the science of food safety than in the science of food nutrition.

In response to these and other concerns, the GMA’s SmartLabel enables consumers to get information about products by scanning a barcode or doing an online search to get data on ingredients. The SmartLabel grew out of recognition that the product information today’s consumers are looking for exceeds what can fit on a package label.

Other Sustainability Issues Other sustainability issues are making headlines, such as slavery in the supply chain and the use of antibiotics. Regulations and/or lawsuits could require food packagers to include labels that address these issues.

On the path to progress, controversy should be expected and not seen as something that necessarily undermines progress.

Food Sustainability Progresses Oxfam International, a global workers’ rights organization that evaluates food and agriculture companies’ actions, criticizes many companies’ practices. But in doing so, it also provides a yardstick, however unwelcome, by which to measure sustainability progress.

The Oxfam Behind the Brands campaign analyzes and compares the various sustainability commitments of the Big 10 food companies. The campaign addresses seven specific policy issues: land, women, farmers, workers, climate, transparency and water.

Unilever recently grabbed the No. 1 Oxfam sustainability ranking from Nestlé, with Coca-Cola Company occupying the third spot. Kellogg Company made the most progress across all sustainability areas—up 30 percent from its rating three years ago.

Nine of the Big 10 industry giants improved their rating by at least 10 percentage points since the Behind the Brands campaign’s launch three years ago. Danone—the only company not to surpass the 10-point barrier—still increased its score by seven points, thanks to commitments on climate.

Market Demands Shift Market demands for more organic, fresh and unprocessed food places further pressure on sustainable food and agriculture.

Hebert Research Inc. found that more than 29 percent of consumers are selecting and consuming organic, fresh and unprocessed foods.

Increased demand raises the level of concern about sustainability.

Recycling and waste management are areas that the food industry continues to invest in.

This year, the GMA partnered with the Food Marketing Institute (FMI) to standardize food waste practices and communicate them to consumers.

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COVER STORY continued The Food Waste Reduction Alliance (FWRA), a cross-sector industry initiative led by the GMA, the FMI and the National Restaurant Association (NRA), recently released an updated guide with practical steps and examples to help manufacturers, retailers and restaurants cut food waste.

The Campbell Soup Company’s partnership with the 29% Food Bank of South 71% Jersey and the New Hebert Research Inc. Jersey agriculfound that more tural community than 29 percent gave undersized of consumers are peaches headed selecting and consuming for the landfill new organic, fresh and life as shelf-stable unprocessed foods. peach salsa. Proceeds from the sales of the Just Peachy salsa benefit the Food Bank of South Jersey.

ConAgra Foods Inc. changed the way it transitions from one pudding flavor to another in a manufacturing facility. The company now creates blended flavors rather than waste product while flushing the manufacturing line from one flavor to another. The company donates the mixed-flavor pudding to hunger organizations, reducing manufacturing loss and getting food to those in need.

Large foodservice operators, such as Aramark and Sodexo, are reducing food waste by eliminating trays in cafeterias.

Darden Restaurants Inc. and Yum! Brands Inc. partnered with the Food Donation Connection to coordinate food donations to food banks and other organizations as an alternative to discarding prepared foods.

Efforts Continue on Different Fronts Wal-Mart recently released its ninth annual Global Responsibility Report, outlining its environmental and social activities for the past year. For the first time, this report includes infor-

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mation about the progress made on implementing the company’s sustainable chemistry policy.

According to Wal-Mart, it reduced the usage by weight of its designated high-priority chemicals by 95 percent. Information about how this progress was made will be posted on Wal-Mart’s Sustainability Hub, along with chemicals the company targeted for reduction or elimination.

Wal-Mart’s 10-year partnership with the Environmental Defense Fund identifies three sustainability goals: • Be supplied by 100 percent renewable energy.

• Create zero waste.

• Sell products that sustain the world’s resources and environment.

Roundy’s Supermarkets Inc. joined the U.S. Environmental Protection Agency (EPA) GreenChill Partnership program, which is a partnership between the EPA and food retailers to reduce emissions, and decrease their impact on the ozone layer and climate change.

Using the EPA’s greenhouse gas equivalencies calculator, the yearly reduction of greenhouse gases are approximately 33.6 metric tons and 36,047 pounds of coal being burned.

Innovative Products Support Initiatives Product innovation brings new tools to support initiatives.

In 2012, Fetzer Vineyards adopted a new cleaning product called peracetic acid, which requires less rinsing, for wine tanks. This change enabled the company to reduce its water consumption by more than 200,000 gallons annually and reduce the energy used to pump the water.

Sustainability is clearly becoming a driving force in meeting consumer demands, government regulations and more efficient business practices for the food industry. While more players in the food supply chain address sustainability, logistics service providers play a critical support role in many of these efforts.

MATERIAL HANDLING INSTITUTE OUTLINES SUSTAINABILITY TOOLS By 2025, the material handling and logistics industry should have standard methods of incorporating sustainable development into business plans and operating strategies, according to the Material Handling Institute (MHI) U.S. Roadmap for Material Handling and Logistics. Such methods should adhere to the goals of sustainability.

Any attempt to reduce the environmental impact of the material handling and logistics industry requires an accurate assessment of environmental impact itself, the roadmap notes. To this end, there is a need to: • Specify in some unit of measure the relevant emissions released.

• Identify an environmental impact factor that may be expressed in monetary terms.

Lifecycle assessment tools already exist to help companies assess the impact of their operations on the environment. These tools should address the details of material handling and logistics. The greater challenge, MHI notes, is to spread the word within the industry that such tools already exist.

One of the factors that contribute to emissions generated by the material handling and logistics industry is the long distances traveled by trucks and other vehicles. As the industry continues to improve the cost of transportation by reducing miles driven, the environment will benefit.

A significant amount of solid waste generated by the food industry comes in the form of packaging. There is a need for new approaches to reduce the amount of packaging required and for new packaging materials, and new approaches that support future material handling and logistics requirements.

Packaging must be capable of preventing product degradation due to environmental factors, thwarting physical damage, supporting new material handling equipment and improving space utilization within unit load containers.

After the energy sector, the transportation and logistics market is the most visible industry in the global effort to reduce carbon emissions. To reduce environmental impact, there is a need to adopt more alternative energy and hybrid vehicles for over-theroad transportation, and for material handling equipment inside facilities.

www.foodlogistics.com

6/14/16 11:44 AM

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6/14/16 11:44 AM

3PLs SPECIALTY LOGISTICS

BY LARA L. SOWINSKI

SEAFOOD LOGISTICS Demanding logistics requirements, combined with difficult weather and environmental conditions, make seafood logistics especially challenging.

18

C

ommercial fishing is a labor-intensive and oftentimes dangerous endeavor, particularly in areas such as the waters off the Alaskan coastline. Yet, seafood is a cornerstone of Alaska’s economy. It accounts for roughly 20 percent of the state’s basic private sector economy and is the leading foreign export.

Lynden is an integrated transportation provider with expertise in seafood logistics and a long history serving Alaska.

Bill Johansen, president of Brown Line LLC, part of the Lynden family of companies, notes, “The transportation of fresh seafood is challenging as we are at the mercy of Mother Nature. Volumes can fluctuate dramatically, and operationally, we need to be fluid and flexible to respond to ever-changing conditions.”

There are other variables, too, he says, such as the return rate for each fishery, adjustments to fishing quotas and bad weather that could prohibit boats from fishing.

Moreover, the fishing season itself can fluctuate significantly from one season to the next, says Johansen.

“The salmon season kicks off with the Copper River opening in May, and other species—Pink, Coho, Chinook, Sockeye and Chum salmon— run through early September. Some species may vary by over 100 million pounds from season to season.”

This is one more reason that “the impact on transportation and logistics providers can be substantial,” he says. “If you moved 300 containers to an area and the fish do not arrive, you have the cost of relocating the equipment to another area. If the

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runs are larger than anticipated, there is an urgent need to provide assets and resources to support the fishery. The Lynden family of companies works together to support the fishery wherever and however it can. While fish can be frozen, the highest value is to sell fresh, so any inability to provide adequate support negatively affects the fishing community.”

Learning From Experience

fish are a fickle bunch and may choose not to cooperate with our well-laid plans,” Johansen says.

“This is when things get interesting. The ability to move large amounts of equipment quickly, secure airspace and provide lift with Hercules aircraft are just a few of the moving parts that are necessary to remain flexible in the seafood transportation business. Once the product exits Alaska, Brown Line provides less-than-truckload (LTL) and truckload (TL) expedited team service to destinations in the Lower 48 and Canada. The fresh product has a relatively short shelf life, so all moving parts must function in unison to provide quality product to end users.”

“Lynden has the advantage of pioneering transportation in Alaska, and we evolved over the years in concert with Alaska’s growth and need,” Johansen says.

Due to the remoteness of Alaska operations, it is rare that customer freight requires only one mode of transportation. Lynden offers truck, air, ship, While fish can be frozen, the highest tug and barge, rail and even value is to sell fresh, so any inability to hovercraft services to ensure provide adequate support negatively customers have a choice of affects the fishing community.” speed and cost. “Frequently, Bill Johansen, Brown Line LLC we build equipment around customer needs and the Johansen says the company dechallenging Alaska environment to veloped solutions for nearly every ensure our customers can optimize scenario imaginable. their supply and delivery chain,” “Managers are experts in the says Johansen. areas they oversee. We have barge “Lynden has a seafood team that operations, loading crews, local is comprised of experts from various and long-haul drivers, dispatchers, Lynden companies that work toair crews, air support staff and airgether to plan for the upcoming seafreight forwarding personnel that son,” he adds. “Experience, historical make up the Lynden team,” he says. data and fish forecasts, coupled with It’s not just an extensive and meetings with processors to identify multimodal fleet because software their needs, are the methodology we and technology also help Lynden apply to each season.” support its seafood customers.

However, “at the end of the day, “We keep seafood customwww.foodlogistics.com

6/14/16 11:58 AM

INNOVATIVE OCEAN CONTAINER TRANSPORTS LIVE LOBSTERS

ers connected 24/7. Our online systems give customers the ability to control information about their shipments. Lynden’s EZ Commerce system allows customers to manage the shipping process online by requesting quotes, pickups, and tracking and tracing,” says Johansen.

“Seafood customers can see a time-sequential view of the progress of their shipments every step of the journey from origin to destination. Tracing includes status reports, as well as links to images of signed delivery receipts, bills of lading and other valuable documentation.”

In April, CMA CGM Group introduced a new generation of ocean container, called AQUAVIVA, which is designed to transport live lobsters in their original water conditions to maintain their natural habitat.

The containers are a result of 4 years of research and development between CMA CGM’s reefer teams and EMYG, an international engineering company specializing in professional water • CMA CGM Group’s filtration dedicated to the carriage of live seafood.

AQUAVIVA ocean containers Previously, lobsters were carried either frozen by ocean transport live lobsters in their transport or alive and on ice by airfreight. With AQUAVIVA, original water conditions to the lobsters are carried in optimal conditions during the entire transportation process in their original water, from the maintain their natural habitat. fishing area until arrival at the wholesaler or restaurant.

According to Alexis Michel, CMA CGM’s senior vice president, group procurement, containers logistics, intermodal & reefer, “Filled with sea water maintained at the right temperature using CMA CGM’s reefer technologies, these new containers recreate the lobsters’ living conditions and natural habitat. Each animal has its own space, just like they would while resting under a rock on the ocean floor.”

CMA CGM is launching AQUAVIVA in North America and Europe first. The collaboration between the carrier and its partners will continue to be developed in order to allow for ocean transportation of other live seafood.

Our Business Priorities:

The Customer The Customer The Customer Service Service Service For more information about all of our services, visit us at: www.alliance.com www.foodlogistics.com

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TOP GREEN PROVIDERS 2016

BY EDITORIAL STAFF

2016 TOP GREEN PROVIDERS LIST 2016 TOP PROVIDERS

S

Americold implemented standards at each one of its sites to indicate

exactly how much energy a facility should be using based on a given

occupancy level, product and season.”

20

ustainability continues to be a driving force for nearly every type of business For companies in the food and beverage sector, taking an active role in promoting sustainability throughout their operations is crucial considering the urgency to reduce the food chain’s carbon footprint and preserve the already thin profit margins.

Food Logistics’ annual Top Green Providers list offers logistics professionals a guide to the providers, manufacturers, and software and technology companies that are finding new ways to promote sustainability throughout their operations and those of their customers.

This year’s list consists of transportation providers, 3PLs, cold storage providers, technology companies, pallet manufacturers and many others that stepped to the front to become leaders in supporting a more sustainable global food supply chain.

AFN LLC (www.loadafn.com)

AFN, a 3PL, offers a solution that uses order consolidation, inventory planning and demand forecasting to reduce the total number of shipping days per week from seven to three. This results in a significant reduction in the total miles traveled

FOOD LOGISTICS | JUNE 2016

annually, the number of trucks on the road, as well as the overall carbon dioxide (CO2) footprint of the entire organization.

Mileage savings and CO2 emission reductions are measured on a weekly basis, comparing the old routing parameters against the new routing parameters. In as little as 12 months, AFN’s solutions helped its clients realize CO2 emission savings of up to 4,975 tons and a 62.9 percent mileage reduction totaling 2.2 million total miles.

ALLIANCE SHIPPERS INC. (www.alliance.com)

Alliance Shippers places an emphasis on the use of intermodal for truckload dry and refrigerated shipments. The continued expansion of its 53-foot refrigerated trailer fleet to 2,100 trailers includes 200 new units coming into use in 2016.

These units are equipped with full authority over the temperature control system and satellite tracking for location monitoring and shipment status. They also include the latest technology in mobile refrigeration and offer reduced fuel consumption while operating.

Alliance also incorporates modern interior air chute designs to offer even temperature control and higher cargo stacking heights.

Alliance’s ongoing efforts to increase sustainability company-wide include energy-efficient solar array panels installed on its Keasbey, New Jersey, warehouse and cross-docking facility to remove or minimize its use of local grid service. Alliance also insists on the use of Environmental Protection

Agency (EPA) SmartWay-certified carriers for highway pickup and final-mile service, and it is also an active participant in the SmartWay program and certification. The company is an annual participant in the Carbon Disclosure Project (CDP) certification program and obtained EcoVadis certification in January.

AMERICOLD (www.americold.com)

Americold knows that refrigeration is a power-hungry activity, but it made it a company-wide goal to conserve energy consumption and its efforts resulted in over 220 million kilowatt hours (KWH) of saved cumulative electricity since 2010. This translates to the reduction of more than 180 million pounds of CO2 equivalents into the atmosphere.

Americold monitors facility-level energy consumption from a desktop application, and implemented standards at each one of its sites to indicate exactly how much energy a facility should be using based on a given occupancy level, product and season. Out-of-tolerance readings trigger alerts to local management and the energy management team to ensure that rare issues can be resolved quickly to maintain efficient operations and continue to conserve energy.

Americold participates in every available demand response program offered by local utility companies in the United States. Its connected sites also initiate energy load shedding to support local utility companies and their commitment to avoiding power blackouts during demand spikes.

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COVER STORY continued

CHEP (www.chep.com)

… CHEP’s Value Stream Mapping solution

saved its customers $13 million with efficient, sustainable solutions since June 2015 …”

CHEP is achieving sustainable goals as a company and is making its consumer packaged goods customer companies more sustainable at the same time through its Better Planet initiative. With its 2015 and 2020 sustainability targets, CHEP is moving toward becoming a zero-deforestation, zero-emission, zero-waste company. In addition, CHEP’s Value Stream Mapping solution saved its customers $13 million with efficient, sustainable solutions since June 2015; eliminated 4.5 million empty truck miles; and eradicated 23.6 million pounds of climate change-inducing CO2 gas.

CHEP’s sustainability goals are aligned with the United Nations’ Sustainable Development Goals because, when companies and organizations around the world collaborate and focus their joint efforts on shared goals, the result is even more impactful. CHEP sustainability progress is measured by the Global Reporting Initiative’s G4 reporting framework and the results are audited by KPMG. The Ellen MacArthur Foundation, a prestigious British not-for-profit organization dedicated to achieving a circular economy, recently singled out CHEP and its parent company, Brambles, as visionary companies that contribute to global sustainability through their pooled pallet and reusable plastic container offerings.

DSC LOGISTICS INC. (www.dsclogistics.com)

DSC Logistics uses a steering committee to oversee initiatives in a three-pronged approach focused on opportunities in warehousing, transportation and network redesign. Working with representatives from across its 40-plus logistics center locations, the steering committee provides support for pilot projects and network-wide rollouts,

22

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sustainability education throughout the organization, and metrics and benchmarking efforts. Each year, DSC sets goals for reducing its consumption of electricity, natural gas, water, propane and waste tonnage. Additionally, objectives include increasing DSC’s alignment of goals with its customers’ sustainability initiatives, keeping in mind that there needs to be a return on investment (ROI).

Each DSC logistics center reports its measurements on a monthly basis and results are tracked throughout the network.

Its metric tracking (electricity, natural gas, water, propane, recycling and waste tonnage) enables the company to keep a close eye on the performance of each location, identify the most promising pilot projects for network-wide rollout and set holistic goals for consistent reduction of the entire company’s carbon footprint. DSC is certified as both a logistics provider and a carrier partner in the SmartWay Transport Partnership, and its Roanoke, Texas, logistics center was honored with an EPA ENERGY STAR Award.

ELEMICA (www.elemica.com)

Elemica helps food and beverage customers improve and achieve their measurable sustainability goals through the automation of manual processes to reduce their usage of paper, greenhouse gas emissions, and water and energy usage. Manual approaches are costly, time-consuming and fraught with errors, so by automating business processes for sourcing, procurement, order

management, inventory and logistics not only streamlines operations and boosts efficiencies, but also helps customers lower costs while driving sustainability.

By utilizing Elemica’s integrated cloud-based logistics and transportation products, customers decreased their carbon footprint and energy usage by optimizing shipments and loads. Shippers and carriers can collaborate on shipments to find capacity, avoid disruptions and penalties, and optimize loading/unloading times to save on fuel and lower emissions.

Since 2004, Elemica delivered approximately 300 million messages, equating to savings of 3,000 cubic meters of landfill space, 33 million liters of water used in paper production, 31,500 trees and 345,000 kilograms of CO2 emissions.

FLEXSPACE/ STORAX AMERICA (www.flexspace360.com)

Poweracks by Storax are high-density, mobile racking solutions that are providing the food industry around the world with a more environmentally friendly and efficient storage alternative.

The mobile racking solution can increase a facility’s storage capacity by as much as 100 percent, while it reduces the footprint required to operate by as much as 50 percent to allow for a multifaceted benefit to food warehousing companies. Reduced space results in perpetual energy savings and requires far less energy demand to refrigerate these energy-intensive environments.

Poweracks maximize space utilization and provide operators with direct, unobstructed access to products, a rare anomaly in DCs and warehouses. Through use of a moving access aisle, conventional static aisles are eliminated and

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PROVIDERS

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COVER STORY continued

A. Duie Pyle Inc. Access Supply Chain Services LLC Accu-Label Inc.

www.aduiepyle.com X www.accesssupplysolutions.com X X www.accu-label.com Eco-friendly, biodegradable paper

AFN LLC Alfa Laval Alliance Shippers Inc. Americold ArrowStream Asplund Coffee LLC Bay Logistics Inc. Becker Logistics Inc. Big Ass Solutions Blue Ribbon Transport Inc. Cargo Chief CaseStack Central Storage & Warehouse Co. (CSW) CHEP CHEP Pallecon Solutions Cloud Logistics Corcentric Coyote Logistics LLC Crown Equipment Corporation Crystal Creek Logistics LLC DHL Global Forwarding DMW&H Inc. DSC Logistics Inc. East Coast Warehouse & Distribution Echo Global Logistics Elemica enVista Fetch Logistics Inc. Fleet Advantage Flexspace/Storax America Florida East Coast Railway Flux Power Holdings Inc. FreightCenter Inc. FST Logistics Inc. full circle catering FW Warehousing GreenMile LLC Hellmann Perishable Logistics Henningsen Cold Storage Co. HighJump Hookline Fish Company Hub Group Inc. iDriver Solutions Impact Power Technologies LLC Inmar Inc.

www.loadafn.com X www.alfalaval.com X www.alliance.com X www.americold.com X X Warehouse/DC www.arrowstream.com X www.asplundcoffee.com X Roasted coffee www.baylogistics.com X X X X X www.beckerlogistics.com X X X X X X X www.bigasssolutions.com X High-volume, low-speed fans and air movement www.blueribbontransport.com X X X X www.cargochief.com X www.casestack.com X X www.csw-wi.com X X X X www.chep.com X www.cheppallecon.com X X www.gocloudlogistics.com X www.corcentric.com X www.coyote.com X X X www.crown.com X X X X www.crystalcreeklogistics.com X X www.dhl.com X X X www.dmwandh.com X www.dsclogistics.com X www.eastcoastwarehouse.com X X X X www.echo.com X X www.elemica.com X www.envistacorp.com X X X X X www.fetchlogistics.com X www.fleetadvantage.net X X Technology services www.flexspace360.com X X Mobile storage racking systems www.fecrwy.com X www.fluxpwr.com X X X www.freightcenter.com X X www.fstlogistics.com X X X www.fullcirclecatering.com Food, composting and sustainability www.fwwarehousing.com X www.greenmile.com X www.hellmann.com X X www.henningsen.com X X X X X www.highjump.com X www.hooklinefish.com X X X X Sourcing raw materials www.hubgroup.com X www.idriversolutions.com X www.impactpowertech.com Barcode scanner OEM replacement batteries www.inmar.com X X X Supply chain optimization, returns

International Asset Systems Kane Is Able KENCO Layer Saver LLC Lineage Logistics Holdings LLC Locus Traxx Worldwide Mars Inc.

www.interasset.com X X www.kaneisable.com X www.kencogroup.com X X X X X X X X X X www.layersaver.com X X X X X Shipping frames www.lineagelogistics.com X www.locustraxx.com X www.mars.com X X X X

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fruit labels and FDA-compliant adhesive for direct food contact

management and liquidation/remarketing

www.foodlogistics.com

replaced with revenue-generating, cost-saving product storage. The moving aisle can be placed wherever egress is desired, offering immediate, easy access and product visibility to every storage location.

With installations in over 60 countries, Storax has a rich history of helping organizations maximize utilization of space and land, reduce their energy demands and lower their impact on Earth’s resources.

FST LOGISTICS INC. (www.fstlogistics.com)

FST Logistics’ sustainability efforts in the past 12 months not only continued to contribute to the food and beverage industry’s vision of reducing its carbon footprint, but also its customers’ efforts, many of whom demand an increased effort each and every year. In 2015, FST

www.foodlogistics.com

became a member of the Green Power Partnership, an EPA-sanctioned sustainability program, by matching its annual energy usage of 1.2 million KWH by purchasing an equal amount of renewal energy credits (RECs) to be used all over the country on projects that offset that energy usage. The purchase of the RECs is measured by matching the usage of the company’s annual electricity with sustainable projects taking place all over the country. So when FST purchased the equivalent of 1.2 million KWH of energy, that funding may go to a clean water project in New York or even a wind turbine program in Iowa.

Further, FST added more compressed natural gas (CNG) trucks and new fuelefficient refrigerated trailers with features that include California Air

Resources Board (CARB) compliance, ibright telematics for precise monitoring, STEMCO trailer skirts to cut the drag on a trailer and reduce fuel usage by 5 percent, STEMCO trailer tails and all aluminum wheels with SmartWay-approved tires.

FULL CIRCLE CATERING (www.fullcirclecatering.com)

Sourcing locally for 14 years through one-on-ones with farmers and local composters, full circle catering has been certified green for 10 years. It is the smallest caterer to be certified green and one of the first three caterers certified by the Green Restaurant Association. full circle catering also offers both an on- and off-site recycling and composting program. full circle catering uses only reusable rentals (foodservice ware) or biodegradable, compostable disposables. The company also offers incentives to clients to recycle and compost. full circle catering does not use a restaurant supplier:

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| FOOD LOGISTICS

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COVER STORY continued

Everything is bought or sourced locally. The caterer also offers a weekly meal delivery program featuring recyclable containers that clients can recycle or reuse.

HENNINGSEN COLD STORAGE CO. (www.henningsen.com)

Henningsen’s alternative energy efforts to date supplemented more than 1.4 million KWH combined,

reducing its CO2 output by over 1,000 tons.”

26

Henningsen Cold Storage Co. is focused on using alternative energy, facility design, lighting, reclamation/ recycling programs and its refrigeration technology to enhance sustainability efforts. Both of the company’s facilities in Portland, Oregon, are utilizing rooftop solar panels in order to offset the electricity required to maintain the temperature at its facilities. Henningsen is also enhancing sustainability efforts through facility design features, including reflective cool roof systems, upgraded insulation panels, high-speed freezer doors and sealed loading docks. Lighting is another area in which the company is striving to improve, with many of its facilities using fully controllable, smart motion-sensing LED lighting systems with varying brightness to reduce energy usage. Henningsen’s alternative energy efforts to date supplemented more than 1.4 million KWH combined, reducing its CO2 output by over 1,000 tons.

All Henningsen warehouses operate using computer-controlled, variable-speed compressors and fans to drive the ammonia-based refrigeration systems, which are being constantly monitored both on- and off-site, to ensure that everything is operating at

FOOD LOGISTICS | JUNE 2016

maximum efficiency. Henningsen Cold Storage Co. is also working to reduce its carbon footprint through recycling and reclamation by decreasing the amount of waste that goes into landfills by recycling pallet wood, shrink wrap, cardboard, paper and oil. Other programs include irrigating with reclaimed water from the condensers and utilizing waste heat from the refrigeration process to warm the ground under its warehouses.

iDRIVER SOLUTIONS (www.idriversolutions.com)

iDriver Solutions’ signature product—the E•COPILOT—provides meaningful fuel savings and reduction in greenhouse gases with an unseen, non-intrusive, solid-state device that lasts beyond the life of the truck. Results are measured in real time and are continually reported over the life of the truck. The reporting is available in a variety of different formats, and provides fuel and emissions savings that can also reduce driver aggression over time for a better safety record for all food and beverage vehicle fleets.

The E•COPILOT, which requires no maintenance, uses global system for communications (GSM) technology to allow the fleet owner to access reports and make vital adjustments via the iDriver Solutions portal in real time, anytime. The E•COPILOT garnered international recognition as a past winner of the top Canadian Energy product, which is now subsidized by the Canadian government.

KANE IS ABLE (www.kaneisable.com)

Kane Is Able has many sustainability initiatives, but its most recent push is the installation of new lighting at select Kane Is Able DCs that serve multiple food and grocery companies. Kane replaced fluorescent lights with safer, more energy-efficient LED, high-bay lighting at two of its Scranton, Pennsylvania, DCs, covering 1.2 million square feet of space and resulting in a reduction of 2.02

million KWH per year of fossil fuel power generation at the source.

This lighting project alone has the impact equivalent of 294 passenger vehicles being taken off the road, 500 tons of decomposing waste being removed from landfills and 156,500 less gallons of gasoline consumed.

Kane Is Able is also a leading practitioner of collaborative distribution, a green-friendly strategy that pools the inventory and shipments of middle-market consumer goods manufacturers so common retail customers can receive the same volume of goods using fewer trucks. The company is EPA SmartWay-certified and recently purchased seven CNG-powered Class 8 trucks, which produce up to 20 percent fewer greenhouse gas emissions and significantly less smog-producing pollutants than their petroleum-fueled counterparts. Kane Is Able also recently updated its diesel-powered tractor fleet to save $1.3 million and 343,000 gallons of diesel annually.

KENCO (www.kencogroup.com)

In 2015, KENCO completed lighting upgrades at three facilities in Allentown, Pennsylvania; Portage, Michigan; and Chattanooga, Tennessee. The lighting systems are anticipated to produce an annual savings of over $227,000. KENCO also installed air dryers in one facility’s restroom, reducing towel usage and saving $2,100 annually, while additionally installing low-flush and hands-free equipment on commodes and urinals, saving 52,000 gallons of water and $1,150 yearly.

Moreover, KENCO employed new dashboards on key sustainability metrics to track usage of electricity, natural gas and water. Baseline data on each metric is monitored against set goals toward lowering costs, reducing energy use and producing less waste in customer warehouses managed by KENCO. KENCO utilizes hybrid automobiles in its company fleet and offers training to drivers on progressive

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PROVIDERS

ern ati ve Ma fu e ter ls & ial ene h a Fac n dl rgy ilit ing yd s y esi s t Lift e gn ms tru cks Lig &r hti ela ng ted equ Pal ipm let s, p ent ack Re age cla s& ma tio con Re n& tai frig ner rec era ycl s tio ing Sof n p ro tw are gra &t ms 3P ech L nol o gy (trail Tra ship ers nsp pin , tire g c s, o rt ont ain a Tra tio ers ) np nsp rov ort ide ati Wa on r (oc ter eq u ea n , ro &r ipm a d, aw air, Ot en t rail ma h er ) ter ials

2016 TOP

Alt

Co mp any we bsi te

COVER STORY continued

Marten Transport Ltd. Murphy Warehouse Company NFI Industries North American Bioindustries LLC

www.marten.com X www.murphywarehouse.com X www.nfiindustries.com X X www.northamericanbio.com Facility maintenance cleaners,

Nuovo Group Inc. Old Dutch Foods Inc. Paragon Software Systems Inc. Penske Logistics PINC Solutions Polymer Logistics Railex LLC Retrotech Inc. Reverse Solutions LLC RLS Logistics Ruan Transportation Management Systems Rubicon Global Holdings LLC Ryder System Inc. S4i Systems Inc.

www.nuovogroupinc.com X X www.olddutchfoods.com X www.paragontruckrouting.com X www.penskelogistics.com X X X X X X DC management www.pincsolutions.com X www.polymerlogistics.com X www.railex.com X X www.retrotech.com X X www.reversesolutions.com X X www.rlslogistics.com X X www.ruan.com X www.rubiconglobal.com X Waste brokerage www.ryder.com X www.s4isystems.com Paperless software and document

Saddle Creek Logistics Services Schenker Inc. Schneider ShipXpress Inc. SILVERBULLET TRUCKING LLC

Starke Material Handling Group Stop & Shop Supermarket Company SYSPRO Testa Produce Inc. Tetra Pak International The Raymond Corporation TMW Systems Inc. Transportation Insight Trinity Logistics Triple T Transport Inc. Tyson Foods Inc. UNEX Manufacturing Inc. United Natural Foods Inc. (UNFI) Union Pacific Railroad Unyson Logistics US Perishables Vormittag Associates Inc. (VAI) Weber Logistics Werner Enterprises Inc. Westfalia Technologies Inc. WSI Yale Materials Handling Corporation

www.sclogistics.com X www.dbschenkerusa.com Freight forwarding and logistics www.schneider.com X X www.shipxpress.com X www.manta.com/c/mx427nl/ silverbullet-trucking-llc X X X www.starkeusa.com X www.stopandshop.com X X X www.syspro.com X www.testaproduce.com X X X X X www.tetrapakusa.com X Packaging and processing www.raymondcorp.com X X X www.tmwsystems.com X www.transportationinsight.com X www.trinitylogistics.com X X www.triplettransport.com X www.tysonfoods.com X www.unex.com X X X www.unfi.com Natural and organic food distribution www.up.com X www.unyson.com X X X www.usperishables.com X X X www.vai.net X www.weberlogistics.com X X X www.werner.com X X www.westfaliausa.com X X www.wsinc.com X www.yale.com/ X X north-america/en-us/

degreasers, floor scrubs

management software solutions

shifting techniques. The company also uses all-electric auxiliary power units (APUs) to reduce idle time and fuel consumption, and employs alternative fuel research and development for KENCO’s over-the-read (OTR) tractor fleet.

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FOOD LOGISTICS | JUNE 2016

KENCO’s material handling solutions use solar panel installations to produce alternative energy to offset power consumption, and conduct network optimizations often to reduce transportation and labor redundancy waste.

PENSKE LOGISTICS (www.penskelogistics.com)

Some of the technology Penske uses to ensure its food and beverage customers receive the best service for their time-sensitive products includes real-time

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tracking using GPS technology to ensure accurate temperature monitoring. The company also utilizes barcode inventory tracking systems, and RFID devices embedded into pallets or individual items. Penske employs warehouse management software to track the product movement of important perishable grocery items in the warehouse to measure and analyze data on how often and where the SKUs are moving, and re-engineer the warehouse layout to ensure the flow is at maximum efficiency.

Penske performs annual greenhouse gas emission inventory for all of its global operations, and discloses its greenhouse gas emissions information and energy usage/reduction efforts to the CDP. The organization also participates in the EPA’s SmartWay Transport Partnership, which helps the supply chain move goods in a cleaner, more efficient manner. Furthermore, the company participates in the EPA’s Green Power Partnership and sup-

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ports clean energy by voluntarily purchasing RECs.

REVERSE SOLUTIONS LLC (www.reversesolutions.com)

In the past, end-of-life product or ingredients were sent to a landfill, creating an expense, filling up landfill space and failing to support Reverse Solutions’ sustainability initiatives. Now the company repurposes these items by diverting them into animal feed and recycling all packaging by commodity type.

Before product is released, it is weighed and recorded so that it can be reported on predetermined reporting periods.

Data are also kept to compare time periods to gain a better understanding of what created these volumes.

Another feature of Reverse Solutions’ carbon footprint program is its waste stream management initiative to support sustainability in clients’ headquarters, DCs or

other administrative areas. These weights and data are submitted to clients in order to establish a strong reduction in their carbon footprint, which is a vast improvement over previous initiatives.

RLS LOGISTICS (www.rlslogistics.com)

RLS Logistics is continuous in its effort to reduce its overall carbon footprint. The company’s newest facility in Newfield, New Jersey, is equipped with energy-efficient lighting and a 257-kilowatt solar array on the roof to provide cost savings and reduce dependence on grid power by replacing it with a clean, renewable source. The array produces over 300,000 KWH a year, enough electricity to power 25 typical homes in the United States. The corresponding reduction in greenhouse gas emissions (200 tons per year) is equivalent to taking 40 cars off the road or avoiding 70 tons of landfill waste each

JUNE 2016

| FOOD LOGISTICS

29

COVER STORY continued year. In addition, the RLS corporate office will soon be going through an extensive solar project in which 90 percent of the facility’s power will be generated by solar.

To reduce its environmental impact, and improve the quality and quantity of light for employees at its Pittston, Pennsylvania, facility, RLS upgraded to fluorescent and sensor-controlled LED lighting fixtures by replacing T12 fluorescent and metal halide lighting fixtures with T8 fluorescents throughout the office space, and LEDs throughout its freezer warehouse and loading dock areas. In addition to improving working conditions, the lighting upgrade enabled the company to shed 127.24 KWH from the Pittston facility, resulting in the CO2 reduction equivalent to planting 117 acres of trees, saving 48,235 gallons of gas and removing 75 cars from the road.

RYDER SYSTEM INC. (www.ryder.com)

… the RLS corporate office will soon be going through an extensive solar project in which

90 percent of the facility’s power will be generated by solar.”

30

With nearly 1,000 natural gas vehicles operating within its fleet across a number of customer segments, Ryder is the leader in natural gas vehicle solutions for the commercial transportation industry. Ryder has more than 50 million miles of experience, 18 natural gas vehicle maintenance facilities, and more than 6,000 natural gas vehicle-trained maintenance and support personnel. Ryder deployed CNG and liquefied natural gas (LNG) vehicles into the fleets of Ryder customers in Arizona, Arkansas, California, Florida, Georgia, Louisiana, Maryland, Michigan, New York, Texas, Utah, Wisconsin and Quebec, Canada.

The organization also operates

FOOD LOGISTICS | JUNE 2016

liquefied-to-compressed-natural-gas (LCNG) fuel stations at its Fontana and Orange, California, service locations. By leveraging Ryder’s deep knowledge regarding natural gas vehicle specifications, the maintenance programs required to support natural gas powertrains and fuel storage systems, as well as its strong supplier relationships and buying power, fleets within the food and beverage industry continue to utilize its natural gas vehicle lease offerings to mitigate many of the unknowns around uptime, maintenance, performance and residual values.

THE RAYMOND CORPORATION (www.raymondcorp.com)

The Raymond Corporation makes sustainability efforts for its customers more feasible with solutions contributing to reduced energy costs and battery usage, more efficient space utilization and more pallet moves per shift.

The company’s Eco-Performance design philosophy reduces energy consumption while increasing productivity on every truck.

With iWAREHOUSE, Raymond offers food and beverage fleet and facility managers the ability to track key performance metrics, energy consumption and cost savings, such as lift truck uptime, battery performance, kilowatt usage, operator productivity and throughput. The company makes access to the data easy with a unique, single-view web portal accessible from any PC or mobile device. The solution is a powerful tool that lets managers correct for inefficiencies, identify opportunities to operate more sustainably, track progress against select sustainability goals, and help inform sustainability initiatives with integrated and comprehensive reports to help lower carbon footprints and reduce kilowatt usage. Available on any brand truck, iWAREHOUSE provides a comprehensive view of warehouse operations and helps warehouse managers improve elements of

operations that support sustainability initiatives with actionable insights, such as labor and equipment productivity, fleet utilization, industrial battery management and warehouse optimization.

TMW SYSTEMS INC. (www.tmwsystems.com)

According to TMW Systems, going green means expanding awareness about waste and sustainability across the entire company culture, not simply making spot fixes to fuel consumption or packaging sustainability. Fleet operations should also focus on eliminating waste and inefficiency through the route planning process to help reduce overall fuel consumption and increase asset utilization.

TMW Systems’ Appian route management software can compile information about customers, orders, products and geography, and plan optimal routing and scheduling solutions to achieve service and operating goals within unique business and time constraints. The solution can also minimize wasted driving miles and idling time, and right-size the fleet to efficiently serve distribution or delivery commitments. When measured on an annual basis, fleets can see reductions of 10 to 25 percent in total road mileage after implementation of such route planning software.

These results are achieved by creating shorter, more efficient routes and by putting fewer vehicles on the road because of more efficient delivery planning.

Companies that invest in Appian route management software from TMW Systems demonstrate to their customers that reducing total fuel consumption through smarter fleet routing and planning is also integral to improving the levels of service and responsiveness provided to those customers. A green technology that improves customer service and satisfaction makes the best business and environmental sense possible, precisely because it makes that investment sustainable for the business.

www.foodlogistics.com

COVER STORY continued

TRANSPORTATION INSIGHT (www.transportationinsight.com)

Fleet operations should also focus on

eliminating waste and inefficiency through the route planning process to help reduce overall fuel consumption and increase asset utilization.”

Transportation Insight’s solutions help food and beverage clients achieve green supply chain results through optimal mode and carrier selection, comprehensive data management and logistics reporting, and what-if supply chain analytics that help clients streamline supply chain networks based upon simulation with historical data to reduce energy costs, mileage and fuel usage. By analyzing supply chain networks to optimize locations of DCs and warehouses to reduce last-mile deliveries, Transportation Insight clients meet their green supply chain and sustainability goals by removing waste, resulting in lower operating costs, reduced energy usage, optimized inventory levels and diminished packaging.

Transportation Insight performs lean supply chain assessments to determine where to cut waste, such as eliminating expedited shipments, optimizing transportation loads and modes, gaining control over inbound and outbound shipments, and improving communication and collaboration with transportation partners, vendors and customers. Transportation Insight is also a SmartWay Transport partner, working with the EPA to increase energy efficiency, while significantly reducing greenhouse gases and air pollution.

TYSON FOODS INC. (www.tysonfoods.com)

Tyson Foods is committed to respecting and conserving the environment and natural resources everyone depends on because it’s where our food comes from.

This commitment is essential to doing business in a sustainable way and is one of the company’s core values: “to serve as stewards of the animals, land and environment entrusted to us.” In fiscal 2015, the EPA named Tyson Foods a SmartWay Excellence Award

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FOOD LOGISTICS | JUNE 2016

semi-finalist, a selection based on the environmental performance the company demonstrates via partner tools and the use of SmartWay carriers to move freight. In addition, Tyson Foods continues to work on minimizing its environmental impact with initiatives designed to reduce truck miles on the nation’s highways, such as installing ultra-light equipment, using direct ship to customers and partnering with rail carriers.

Tyson’s private fleet continues to research innovative ways to reduce emissions, lower fuel consumption and decrease greenhouse gases, while improving its miles-per-gallon performance. These efforts saved over 412,000 gallons of fuel. By altering order patterns and volumes to allow direct shipping, Tyson Foods saved more than 3.48 million truck miles and eliminated over 1 million OTR truck miles.

UNION PACIFIC RAILROAD (www.up.com)

The Union Pacific Railroad is committed to enhancing sustainability within the food and beverage industry. One hundred percent of the company’s refrigerated boxcar fleet contains Carrier brand, Tier 4, high-efficiency, CARB-compliant units and includes the acquisition of 875 new refrigerated boxcars since 2012—more than any other transportation company. Each unit is continuously checked with infrared technology to ensure there are no voids in the foam, promoting greater fuel efficiency. Union Pacific also created an expedited food train network from the West Coast to the East Coast, resulting in a faster, more reliable and sustainable supply chain with a lower overall fuel burn.

The Union Pacific Railroad continues to set the standard for railroads nationwide in locomotive technology and research. Since 2000, the organization invested $7.5 billion to purchase more than 4,100 locomotives that meet the U.S. EPA’s Tier 0, Tier 1, Tier 2 or

Tier 3 guidelines. As a corporate environmental initiative and in response to customer requests, Union Pacific developed a tool that allows customers and employees to estimate greenhouse gas emissions for shipments, and the difference in emissions between rail and truck transportation. Using this tool, a combination of the company’s refrigerated and boxcar food and beverage shipments in 2015 amounted to a carbon footprint reduction within the food transportation industry of approximately 116.6 billion tons, the equivalent to recycling 41.7 billion tons of waste.

WSI (www.wsinc.com)

WSI prioritizes sustainability for its loyal food customers by recycling large amounts of their cardboard and dunnage materials, manufacturing dunnage materials for clients from previously used wood, using recently installed energy-efficient lighting and increasingly using electric forklifts in its facilities to handle product. Wooden pallets are reused and repurposed frequently, when applicable.

WSI recycles, reuses or repurposes nearly 100 percent of its top three largest facilities’ recyclable waste, based on weekly recycling dumpster loads, facility pallet reuse statistics and repurposing programs in effect. At the company’s high-volume Chicago facility and large central Wisconsin facilities, nearly 100 percent of the wooden pallets used for storing product are reused. Mandatory requirements in the offices of its facilities result in 100 percent of office paper and cardboard waste being recycled as well. One large paper products customer asked the organization to scrap/landfill roughly 70 tons of tissue in 2015, but WSI worked with Waste Management Inc. and discovered the product could be recycled, saving 70 tons of landfill space in Wisconsin. ◆

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SECTOR REPORTS WAREHOUSE: ENERGY EFFICIENCY

BY ELLIOT MARAS

HOW TO KEEP THE LID ON WAREHOUSE ENERGY COSTS E

Enhancements bring more choices in managing one of the hardest to manage expenses.

nergy represents one of the largest costs of operating a food warehouse. Hence, managing energy offers one of the greatest opportunities for improving profitability. New technologies in the areas of temperature control, material handling, lighting and water management make energy use one of the most important considerations in warehouse efficiency.

Refrigerated Versus Non-Refrigerated

• WITRON Integrated Logistics’ order picking machinery maximizes energy use.

34

Energy use varies significantly depending on whether a warehouse is refrigerated or ambient. Energy typically accounts for 15 percent of a non-refrigerated warehouse’s operating budget, but in refrigerated warehouses, refrigeration accounts for 60 percent of the electricity used.

Non-refrigerated warehouses in the United States use an average of 6.1 kilowatt-hours (KWH) of electricity and 13,400 BTU of natural gas

FOOD LOGISTICS | JUNE 2016

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per square foot annually, according to E Source, a research and advisory service that works with most of the 300 largest electric and natural gas utilities in North America.

Lighting and space heating account for approximately 76 percent of total energy use in such warehouses, making these systems excellent targets for energy savings.

Companies often find utilities and energy consultancies helpful in reviewing energy use.

Seeing the Light Kane Is Able, a 3PL with locations across the United States, recently completed a 1.2 million-square-foot LED lighting upgrade in two DCs located in its main business campus, says Alex Stark, senior director of marketing. R World Energy Solutions installed the lighting. The upgrade is projected to save more than 2 million KWH annually with the added benefit of eliminating the emission of 2.7 million pounds of greenhouse gases each year.

Ryder System Inc.’s energy conservation strategy includes sourcing energy-efficient buildings, preferably LEED certified, that are equipped with skylights, says Nanci Tellam, group director of environmental services and sustainability.

LEED refers to the Leadership in Energy and Environmental Design system as certified by the U.S. Green Building Council for environmental performance.

The company converts lighting in existing buildings from metal halide to fluorescent and LED fixtures. It also installs motion and daylight sensors, and equips the lighting system with on/off controls. The controls allow the lighting to be

controlled by zone (e.g., unoccupied warehouse space is fully equipped with light fixtures, but the area is lit just for security purposes).

Refrigeration Systems Evolve For cold storage facilities, refrigeration consumes the most energy.

The application of cascade carbon dioxide and ammonia refrigeration systems are gaining popularity in food distribution facilities.

Factors contributing to the lower cost include smaller, low-stage compressors; smaller low-temperature suction piping, valves and liquid separating vessels; and less piping and vessel insulation.

The phaseout of ozone-depleting refrigerants and increasing legislative pressure on the use of such refrigerants is resulting in a surge of interest in low-charge ammonia for temperature-controlled storage, distribution and food production facilities.

Tim Bauer, director of industrial architecture and project development at Ryan Companies US Inc., a national builder, developer, designer, capital investment consultant and real estate management firm, says the low-charge ammonia system will continue to gain favor due to superior safety, environmental benefits and ease of use.

The low-charge system does not require the extensive piping system that central refrigeration systems have, Bauer says. The low-charge systems have rooftop units that boast plug-and-play installation and fast startup. Such systems are especially useful in leased buildings where expansive, built-in refrigeration is less practical.

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6/14/16 12:34 PM

Lifting Energy Efficiency in Lift Trucks The introduction of telematics and hydrogen batteries to lift trucks is one of the most aggressive areas of investment in warehouses.

Susan Comfort, product manager for narrow-aisle trucks at The Raymond Corporation, a material handling solutions provider, says lift trucks can consume far more energy in a warehouse than many people realize. Lift truck manufacturers are able to reduce energy requirements by how they design the truck, she says.

Electric equipment requires adding infrastructure to the building for battery charging, notes Jim Chamberlain, senior director of industrial engineering and continual improvement at DSC Logistics Inc., a 3PL. “Costs include installation, power hookups, stands, batteries, chargers, a watering system, battery transfer equipment and a battery monitoring system if you want to maximize your investment in your batteries,” he says.

“Energy efficiency can increase productivity with increased uptime,” says Mick McCormick, vice president of warehouse solutions at Yale Materials Handling Corporation. “ Most electric lift trucks currently use lead-acid batteries, McCormick notes. Once the battery charge expires, the battery must be removed and taken to a charging room. A freshly charged battery must then be installed, which overall can equate to 15 to 30 minutes of lost productivity every four to eight hours.

conventional warehouse systems, notes Norman Leonhardt, business development manager at WITRON Integrated Logistics Corp., a designer and implementer of logistics solutions. This enables savings in energy use, particularly in frozen and temperature-controlled storage areas.

There is also potential for energy savings in optimizing the material flow in a distribution facility. In the latest order picking machinery (OPM) generation, several load handling devices are grouped together

to create one transport unit on the conveyor. This reduces the length of time the conveyor elements are switched on and lowers the plant’s energy consumption by up to 30 percent. Forty percent fewer drives are needed in an OPM system.

A well-planned material flow solution using a combination of modules and the variable positioning of the articles lead to optimized paths for stacker cranes and shorter throughput times. They also result in fewer case transport trips on the conveyor.

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6/14/16 12:34 PM

SECTOR REPORTS ROAD-BOAT CONVERSION

BY LARA L. SOWINSKI

EXPANDING PERISHABLES TRADE

GENERATES NEW TRANSPORTATION OPTIONS

M

exico is the 12th largest SeaLand’s exporter of food Atlantico products in the world, service connects and the United States is the No. 1 Mexico with the destination for the country’s fruits, Northeast U.S. vegetables and other agrifood

SeaLand, part of the Maersk Group, launched the Atlantico service in early 2016.

36

products.

Most of the exported food products enter the U.S. via truck along the southern border. However, a new service launched earlier this year by SeaLand offers an attractive and viable transportation option, particularly for time- and temperature-sensitive perishables.

SeaLand is the regional, intra-Americas ocean carrier that Maersk Group reinstituted several years ago. In January, the carrier launched its Atlantico service linking Altamira and Veracruz, Mexico to Philadelphia with a six-day transit time.

According to the carrier, “The SeaLand Atlantico service offers an alternative transportation option for trade between the regions, which is characterized by the use of ground transportation on 95 percent of its volumes. This option is especially geared for producers and exporters of perishable goods to the U.S., and provides the economies of scale, security

FOOD LOGISTICS | JUNE 2016

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and reliability of an ocean service partner. The company specializcombined with an expedited es in handling refrigerated and transit, ideal for moving goods such frozen cargoes, as well as cargoes as avocados, lemons, tomatoes and such as steel, forest products commercial cargo.” and project cargo, with multiple Ariel Frias Ducoudray, busiwarehouse complexes in both ness development and marketing Philadelphia and southern New manager at SeaLand, said there are Jersey that are conveniently a number of advantages associated located on the marine terminals. with the new service.

Gloucester Terminals operates “The marketplace is quite posione of the largest dockside comtive about the SeaLand Atlantico. plexes of refrigerated and frozen Customers are warehouses on the U.S. The reason that East Coast, while the taking advantage Mexican produce and Packer Avenue Marine of the economies meat exporters want Terminal is the largest of scale they are to come to Philadelphia container terminal on able to achieve is the broader port the Delaware River, and by using ocean community’s strength in handles fruit, frozen transportation the cold supply chain. All meat and other specialinstead of the those links are strong at ized cargoes. traditional truckthe Port of Philadelphia.” ing between Holt’s cold storage Mexico and the facilities benefit from Dominic O’Brien, Philadelphia Regional Port Authority United States,” on-site United States which also elimDepartment of Agriinates the need to transload truck culture (USDA), Food Safety and shipments in Texas.

Inspection Service (FSIS), Food & “The increased payload they are Drug Administration (FDA) and U.S. able to transport is a big plus for Customs and Border Protection them so far,” he says.

(CBP) inspectors to facilitate cargo processing.

Port, Logistics Partners According to Todd Brown, Holt Key to Success Logistics marketing, 99 percent of The success of SeaLand’s AtlanCBP inspections take place on dock, tico service is shared among the which further enhances speedy carrier’s various logistics partners. cargo inspection and release.

Holt Logistics Corp. is one such The Port of Philadelphia also

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6/15/16 8:52 AM

views the success as a collaborative effort. Dominic O’Brien, senior marketing representative, Philadelphia Regional Port Authority, notes, “It’s really the entire port community that is involved in supporting Atlantico. Warehouse companies, freight forwarders, truckers, fumigators, as well as the Holt organization all came together to grow the Atlantico service. It has been a real team effort,” he emphasizes, adding that, “The reason that Mexican produce and meat exporters want to come to Philadelphia is the broader port community’s strength in the cold supply chain. All those links are strong at the Port of Philadelphia.”

That collaborative relationship extends to all players in the supply chain, including longshoremen.

The International Longshoremen’s Association Local 1291 offers 19 daily start times versus four in competing ports.

In addition, “The local longshoremen certainly have a can-do business spirit. They became experts in the cold supply chain over the years, and their training and focus on the cold supply chain and food products is evident in our national leadership in fruit—Delaware River ports are No. 1 in the U.S.,” says O’Brien, while food products overall are a top business driver. Last year, “Delaware River ports imported over $5 billion in food products,” he says.

While infrastructure investments obviously qualify Delaware ports as a strong competitor in the perishables business, “most importantly, it’s the teamwork among the port community and our focus on the cold supply chain,” O’Brien says.

SeaLand’s Frias Ducoudray agrees, “Working together with the Port of Philadelphia and Ship Philly First was a great way to ignite the SeaLand Atlantico.” More than a dozen companies that operate and service the Port of Philadelphia launched Ship Philly First in 2011. Its sole mission is to promote the port.

“We partnered with them since day one and, by doing so, were able to speak to larger customer audiences than what we would be able to do by ourselves. We also www.foodlogistics.com

FLOG0616_36-37_TransSECTOR LS RG CM.indd 37

did the same with authorities and ports south of the border for this service. By having every stakeholder invested in the success of this project, we are able to join forces, and collectively drive the benefits of this new and innovative option.

Our collaboration model worked very well, and we will continue to partner with ports, rail and truck operators, 3PLs and authorities for future projects like the Atlantico,” says Frias Ducoudray.

As for the future, he says that,

“We periodically incorporate tweaks to the network in order to improve our service offering across North and South America. The SeaLand Atlantico is still a developing service with plenty of room to grow, so we will continue to strengthen its offering in the next few months.”

Aside from food shippers, the 100 percent containerized service is also attractive to beer shippers, while future prospects could likely include shippers of auto parts and other products.

Move your goods faster & fresher Learn more about SL Atlantico, contact PRPA Marketing at marketing@philaport.com or (215) 426-2600.

www.philaport.com JUNE 2016 | FOOD LOGISTICS

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6/15/16 8:52 AM

SECTOR REPORTS TRANSPORTATION: SUSTAINABLE FLEETS

BY ELLIOT MARAS

NEW INROADS IN

SUSTAINABLE TRANSPORTATION Alternative fuels make headway despite some improvement in diesel prices, bringing more options for sustainable fleets.

38

F

ood and beverage fleets continue to adopt fuel-saving solutions to support sustainability initiatives. These measures consist of alternative fuels, more efficient engines, electronically controlled transmissions, aerodynamics, idle reduction systems, tire inflation monitoring, temperature tracking, driver performance monitoring and, increasingly, onboard computer management.

The switch to alternative fuels is one of the most capital-intensive choices facing transportation companies, given the varying available infrastructures, tax credits and incentives, and the need to train drivers and technicians. The declining price of diesel in the past year has slowed investment in alternative fuels, but most observers expect investment to rebound along with the price of diesel.

Schwan’s Home Service Inc., a manufacturer and distributor of frozen food serving 47 states, has utilized propane fuel vehicles since the 1974 oil embargo and has expanded its efficiency initiatives ever since. While the impetus for switching to propane fuel was economic, the company now views sustainability as an equally important goal, says Tim

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Koeppl, senior fleet director. The switch to propane has been both economically and environmentally advantageous, Koeppl says.

Schwan’s also invests in idle shutdown systems to improve fuel efficiency. The company has worked with its supplier partners in recent years to develop lighter-weight boxes to further improve fuel savings.

Onboard computers have proven to be among the most helpful tools in improving fuel efficiency. Koeppl says certain Isuzu engines are equipped with mileage and idle tracking devices. The company can monitor braking and idling, thanks to the onboard computer system.

Ginsberg’s Foods, a foodservice distributor, has been using hybrid diesel fuel/electric systems on its reefer units for three years. The systems are electronically controlled and allow the reefer unit to shut off when the trailer reaches the desired temperature, says Larry Bigando, transportation manager. The engine has a selfcharging system.

Like Schwan’s Home Service Inc., Ginsberg’s Foods has found route Schwan’s management software critical for Home Service improving sustainability along Inc. uses prowith operating efficiency. The pane-powered vehicles that are company has recently deployed economically and the Appian dispatching solution environmentally from TMW Systems Inc., a develadvantageous.

oper of enterprise management software. The cloud-based Appian solution reduces manual steps.

Andrew Cullen, senior vice president of fuels and facility services at Penske Truck Leasing, says that, by participating in the U.S. Environmental Protection Agency’s (EPA) SmartWay program, Penske has been able to help customers

The Environmental Protection Agency (EPA)-certified propane autogas-powered system on an Isuzu NPR-HD truck transports refrigerated food.

develop their own sustainability strategy. By leasing vehicles to customers, Penske can monitor customers’ emissions and monitor improvement.

According to Cullen, the newest fuel-saving technology is outbound vehicle monitoring. Thanks to onboard computer monitoring, fleets can gauge fuel use for every vehicle and every driver in real time.

Penske is also introducing more alternative fuels to its fleet, Cullen says. Out of approximately 233,900 vehicles in the fleet, about 600 are

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using alternative fuel.

Of that 600, most are using compressed natural gas (CNG) or liquid natural gas (LNG), while some are electric.

Penske has a website to direct customers to natural gas filling stations. An app indicates whether or not the station has the necessary equipment to accommodate tractors and trailers.

Ryder System Inc. has deployed nearly 1,000 natural gas-powered vehicles into its North American lease and rental fleet in the last five years, says Scott Perry, vice president of supply management and global product management at the company. “In doing so, we have developed maintenance capabilities in nearly 20 markets, specifically through investments in our maintenance infrastructure to make our shops compliant for natural gas as a commercial vehicle fuel through upgrades to our electrical and ventilation systems, and by installing methane detection systems,” he says.

Not all fleet operators are ready to invest in alternative fuels.

Carrier A. Duie Pyle Inc. has investigated alternative fuels twice in the last three years and has not opted to invest, says Randy Swart, chief operating officer (COO). “Our trucks don’t return to the same sites every day,” he says.

Swart says the company has invested in other sustainable ventures, however, such as having wind skirts on the trailers. Electronic monitoring of vehicle speed has been another improvement.

Brian Tabel, executive director of marketing at Isuzu Commercial Truck of America Inc., believes natural gas will grow significantly as the infrastructure expands.

Schneider Intermodal saves both fuel and emissions.

Jim Filter, senior vice president and general manager of intermodal at Schneider, a transportation and logistics provider.

Filter points to two key sustainability advantages: less fuel is required (a train can move 1 ton of freight

473 miles using 1 gallon of fuel), and more freight traveling by rail means there is less on the roads, relieving congestion, and reducing fuel consumption and emissions. Schneider provides customers with a carbon footprint report that quantifies savings in carbon dioxide emissions from using intermodal. The rail lines are also investing in sustainability.

BNSF Railway Company has made its engines 7.7 percent more efficient with new engines.

Direct Keep it simple. Long Beach is the fastest, most direct way to move goods between the Far East and most of the U.S. That’s all you need to remember: Port of Long Beach. polb.com/trade

Intermodal Option Intermodal continues to gain favor among shippers largely on account of the improved sustainability compared to over the road, notes

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SECTOR REPORTS TECHNOLOGY: CYBERSECURITY

BY ELLIOT MARAS

TECHNOLOGY’S DOWNSIDE:

CYBER CRIME All businesses are at risk, but hackers sometimes target supply chains.

D

o you think you’re ready for the connected food supply chain that the Internet of Things (IoT) is promising?

In preparing for the exciting future of sensor-enabled devices offering better management intelligence, how many of us recognize the security risks this networked future is unleashing? Do we know the data that helps us make better business decisions on farms and factory production lines, and in warehouses and retail outlets can also cause a lot of harm in the hands of unauthorized users?

Require Jon Amis, partners/ a global suppliers to supply chain pass security assurance audits program before they sign a contract director at Dell Inc., with them a computer technology company, told a gathering of supply chain managers in March that cyber threats are different from other risks because they can occur any place, any time.

The gathering was well-attended, reflecting the growing awareness of cyber risks among supply chain decision-makers.

The 2013 data breach at Target Corporation delivered a wake-up call for many consumers, retailers, and electronic goods manufacturers and distributors. In that highly publicized attack, hackers got a hold of the personal identification information of 70 million customers, as well as data for 40 million credit and debit cards.

According to Krebs on Securi-

44%

95% Believe a supplier or partner security breach could expose valuable data SOURCE: Tripwire survey of 420 IT professionals

40

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ty, a cybersecurity consultancy, the Target attack began when malware infected the computer of a heating, ventilation and air conditioning contractor working for Target. The hackers were able to steal the virtual private network credentials that the contractor’s technicians used to remotely connect to Target’s network. After infiltrating the contractor’s software, the hackers gained access to Target’s billing system.

Supply Chains at Risk While all software users are at risk of cyberattack, Brian Klenke, co-founder and vice president of incident response at Morphick Inc., a cybersecurity firm, says supply chain companies are especially at risk. “Supply chains are a way in,” he says. The supply chain offers hackers a path to other business systems, such as billing.

A supply chain is a network, notes Arun Samuga, vice president of research and development at Elemica, a supply chain software provider that serves food processors. If security is compromised at any point in the chain, the whole chain is at risk. Samuga says supply chains are more at risk from internal breaches than external. Due to this, he thinks companies need

to separate employee duties as much as possible.

External breaches can and do affect supply chain companies, however.

Klenke points to the case of an over-the-road (OTR) carrier that suffered from an email phishing attack.

An email that appeared to be from a job applicant contained an attachment that, when opened, installed malware on the company’s server.

The malware disabled access to the company’s files. The company had to hire someone to recover them.

Another OTR carrier received fraudulent orders from product brokers. The brokers didn’t actually send the orders; a hacker gained entry into the carrier’s database and placed the orders, then took cash advances from the brokers.

The culprits were never caught.

Ocean carriers suffer similar breaches. The Verizon Research, Investigations, Solutions and Knowledge (RISK) Team, a cyber investigation service operated by Verizon Enterprise, reported a shipping breach recently. A global shipping conglomerate advised Verizon it was having problems with piracy.

Pirates were attacking vessels in an unusually targeted and timely fashion, according to the security briefing. They would board a vessel, force the crew into one area and, within a short amount of time, depart.

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SR: TECHNOLOGY continued quarters, they found the pirates confiscated contents from certain cargo containers. It became apparent that the pirates had specific knowledge of the contents of certain crates. The pirates were able to hack into the vessel’s software and access bills of lading.

A recent survey of information technology professionals by Tripwire Inc., a global provider of protection, security and compliance solutions, indicated 95 percent of respondents believe a supplier or partner security breach could expose valuable data. Less than half (44 percent) said their organizations require partners and suppliers to pass security audits before they sign a contract.

“As information becomes more dependent on mobility and wireless connections, the security risks increase and become less selfcontained,” says Melvin Kirk, senior vice president and chief information officer at Ryder System Inc. “For this reason, Ryder enabled layers of security protections based on best practices and security solutions for the confidentiality, integrity and availability of its and customers’ data. The security layers include, but are not limited to, endpoint protection and encryption, mobile device management, wireless intrusion prevention, firewall inspection and prevention.”

A. Duie Pyle Inc., a less-thantruckload (LTL) carrier, invested $2.5 million in data stability and security after conducting a review.

The company has all of its servers housed in two hardened data centers that have the highest level of security. The two sites have identical information, so the information will be safe should something happen to

one of the two. “The deeper we got into this, [the more we realized] we really have to have top-tier technology,” says Randy Swart, chief operating officer at A. Duie Pyle Inc. DSC Logistics Inc., a nationwide 3PL, finds the U.S. Department of Homeland Security’s Cyber Security Evaluation Tool helpful. “We have defen…WITHOUT MOVING WALL. 2016 TOP …WITHOUT MOVING A WALL. …WITHOUT …WITHOUT MOVING MOVING AA AWALL. WALL. sive measures in place, i.e., ...SMALLER FOOTPRINT. …WITHOUT MOVING A WALL. Double your storage capacity with Storax Poweracks and Double your storage capacity with Storax Poweracks and Double Double your your storage storage capacity capacity with with Storax Storax Poweracks Poweracks and and firewalls, malware detecStorax Ranger.

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The expanding use of mobile devices in the supply chain means more susceptibility to malware, says David Eckel, senior managing partner of technology services at enVista LLC, a supply chain consultancy and informaW W W. F L EX SPACE36 0. CO M L E T ’ S G E T M O V I N G I N F O @F L EX SPACE36 0. CO M WWW.FLEXSPACE360.COM E TL ’TSE G’G EST OV T OMIVN OV GG I NINFO@FLEXSPACE360.COM GI N FINFO@FLEXSPACE360.COM W WWWW.FLEXSPACE360.COM W. F L EX SPACE36 0. CO M L#STORAGEMULTIPLIER LE ’ ST EGTMEM IN O @F L EX SPACE36 0. CO M tion technology services W W W. F L EX SPACE36 0. CO M L E T ’ S G E T M O V I N G I N F O @F L EX SPACE36 0. CO M firm. “The level of automation in a warehouse is increasing,” he says, noting Jones and others claim cloud-based that companies should be careful systems, if anything, are more seabout allowing personal devices to cure than on-premise systems. connect to their networks, which Agreeing with Jones on this point could expose them to malware. is Sean Elliott, vice president of As cybersecurity attacks corporate technology at HighJump increase, people are advised not Software, a supply chain network to overreact, says Richard Jones, solutions provider. He says many chief technology officer at LINKon-site servers lack firewalls.

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Alliance Shippers Inc................................ 19 DSC Logistics Inc....................................... 11 Flexspace/Storax America..................... 43 Ford Motor Company............................ 2, 3 Great Dane Trailers.................................. 46 Henningsen Cold Storage Co.............. 25

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Penske................................................................ 5 Philadelphia Regional Port Authority.37 Polymer Solutions International Inc.35 Port of Long Beach.................................... 39 Ryder System Inc....................................... 17 SATO America LLC.................................... 27

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| FOOD LOGISTICS

43

FOOD (AND MORE) FOR THOUGHT

BY GWYNETH FRIES

How Can We Manage Demand for Fresh Food in Asia Sustainably?

A FRIES

Asia often lacks the infrastructure and logistical services to meet consumer demand for fresh food.

44

sia is beginning to flex its massive consumer chops.

By 2030, it will contain two-thirds of the global middle class, accounting for 59 percent of all middle-class consumption.

This creates a complex challenge.

As populations grow and incomes rise, Asian households are moving away from packaged and frozen products, and demanding more fresh fruit, vegetables, meat and dairy. The question is: How can the demand for fresh food be met in a sustainable way?

Currently, the infrastructure to store and transport chilled products, as well as other essential logistical services in the region, are not ready for the growing demand for fresh food. In Thailand, shrimp are transported in containers filled with ice, which quickly melts during the first half of the journey; shrimp thus arrive warm, bloated and mushy at their destination.

Meanwhile, food system emissions are estimated to account for over 25 percent of all human greenhouse gas emissions and Asia is a hotspot, contributing 55 percent of the total amount. The majority of these emissions are due to the production of food that is never consumed. Environmentally unsustainable transport and storage practices also form a significant factor, contributing directly to emissions and also indirectly to food loss. In southern and southeastern Asia, pre-consumer food losses account for more than 90 percent of total food waste.

More than 2 billion people in Asia rely on agriculture for their livelihoods, making them vulnerable to climate change impacts resulting from these greenhouse

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gas emissions. Therefore, it’s critical that we meet growing demand for fresh food in Asia by improving the cold chain infrastructure in a sustainable way, in order to cut down on overall food system emissions.

Another reason why we need to reduce food loss is the looming threat of food insecurity. Currently, 490 million people in Asia go hungry every night. Imagine what a difference cutting down food losses could make in bringing down hunger and malnutrition. Additionally, improved cold chain infrastructure brings down the cost of healthy fresh fruits and vegetables, making them more accessible for low-income consumers—thus improving their nutritional health.

Building a better, less wasteful food system also improves profit margins. Better transport and storage conditions increase the quality, shelf life, safety and, ultimately, the retail value of products.

Why aren’t all companies already building more efficient food chains?

The answer is that it’s hard to pin down responsibility. As opposed to food waste, supply chain food losses often go unnoticed; are very complicated to measure; and vary by product, region and supply chain.

Vegetables and fruit, for example, are produced by smallholder farmers in complex supply chains involving a large number of actors, many of whom lack trust in each other. It’s difficult to pinpoint any one cause of food loss because the likelihood is that many different parties are responsible.

The secret lies in a strong, longterm, trusting relationship between retailers and logistics service providers. While the onus lies with food retailers to demand and pay for more efficient food supply

chains, they often focus on reducing highly visible retail and consumer food waste, and are generally unaware of how much food is lost before it reaches their establishments. On the other hand, food logistics service providers confront this problem every day and are well poised to address it, but they need their buyers to prioritize it and be willing to invest in solutions to reduce losses.

To try and bring the right stakeholders together and foster mutual trust, Forum for the Future created the Food Loss Consortium.

It is a platform—and more than that, an opportunity—for businesses to form partnerships with like-minded, committed companies across the supply chain, get to know the innovators that are disrupting food logistics, and participate in pilot projects that test industry-transforming investments.

Some companies are already starting to find innovative solutions. OpenTaste, a new online food retailer, sells fresh produce through an online platform. By shipping directly to customers in Singapore from farms in California, it reduces losses and could be more cost-effective for consumers. Another exciting firm is EcoHub, which provides tools that permit buyers to quickly and easily estimate the future shelf life of fish before purchase, so that fishermen who maintain the freshness of their fish by using an effective cold chain can command a higher price.

Gwyneth Fries is a senior sustainability adviser at Forum for the Future. She is an expert on agricultural trade and logistics, and passionate about building a sustainable food system that adequately nourishes our growing population. www.foodlogistics.com

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Issue No. 177 June 2016

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THE 2016 FOOD LOGISTICS

TOP GREEN PROVIDERS Our annual list depicts companies, products and technologies that are supporting sustainability throughout the global food and beverage supply chain.

2016 TOP PROVIDERS

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Logistics

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