Food Logistics Sept 2014

Food Lo istics g +

TEMPERATURE CONTROL TECHNOLOGY Boosts Cold Transport Capabilities Pg. 28 ®

Issue No. 160 Sept 2014

Global Supply Chain Solutions for the Food and Beverage Industry

SECTOR REPORTS

• Robots In The Food Chain • Electric Forklifts Gain Acceptance • Rising Transport Costs Raise Stakes For TMS

KEY PORTS & CARRIERS

In The Global Food Supply Chain Increasing Food Imports And Exports Spurring Activity For Many U.S. Ports Pg. 22

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New guest blogs; exclusive online content

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WEB EXCLUSIVES

Archived Webinars, including FL's Educational Webinar series

Daily news on 3PLs, Transportation & Warehousing; Sustainability; Cold Chain; and Food Safety & Security.

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INTRODUCING THE ALL- NEW FORD TRANSIT

THE MOST VEHICLE CONFIGURATIONS IIN N IITS T S CLASS. C L A S S*.

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OF DIMENSIONS The Transit van and wagon are available in 2 different wheelbases, 3 different lengths and 3 different heights. That makes it easy to choose one that will fit you and your business exactly. And if that’s not enough, it’s also available as a chassis cab and cutaway.

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THE NUMBERS DON’T LIE

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*Based on body type, body length, and wheelbase and roof height. Class is Full-Size Vans. **Class is Full-Size Vans. † When properly equipped. ††Class is Full-Size Vans, when properly equipped. Excludes diesel competitive models.

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The 2015 Transit can offer a best-in-class gas-powered maximum CARGO CAPACITY OF 487.3 CUBIC FEET.††

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ON THE MENU S EP TE M B ER 2014 • ISSU E N O . 160

22 28

COVER STORY

Key Ports And Carriers In The Global Food Supply Chain

From major gateways to niche players, U.S. ports play an expanding role in the handling of bulk and containerized food shipments.

By Lara L. Sowinski

FEATURE

Temperature Control Technology Boosts Cold Transport Capabilities

Options expand for fresh, refrigerated and frozen transport and security.

By Elliot Maras

36

SECTOR REPORTS

WAREHOUSING: How Robots Are Changing The Food Industry And Improving Fulfillment

As robots move upstream in the food chain, their range of functions has expanded.

By Chris Castaldi

40

TRANSPORTATION: Electric Forklifts Gain Acceptance, Driven By Sustainability Features

Electric forklifts cut emissions, use less energy, and minimize waste and maintenance.

By Brian Faust

44

28

SOFTWARE & TECHNOLOGY: Rising Transportation Costs Raise The Stakes For TMS Cloud-based systems and other technologies create new options.

By Elliot Maras

6 36

COLUMNS

FOR STARTERS: Leading Providers In The Food/Bev Supply Chain Profiling standout companies in our industry throughout the year.

By Lara L. Sowinski

20

COOL INSIGHTS: HOS Rules And Higher Rates

50

FOOD (AND MORE) FOR THOUGHT: Today’s Food Shoppers Are Less Likely To Have A Primary Destination

The latest hours of service rules are fueling a rate hike on the spot market.

By Mark Montague

Food marketers must cater to a more mobile buying audience; logistics partners can help them succeed.

By Elliot Maras

DEPARTMENTS

40

8 Supply Scan • 14 Food on the Move • 49 Marketplace

Published and copyrighted 2014 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 ten times per year in Jan/Feb, March, April, May, June, July, August, September, October and Nov/Dec

by AC Business Media Inc., 1233 Janesville Avenue, Fort Atkinson, WI 53538, (920) 563-6388. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices.

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• FOOD LOGISTICS

www.foodlogistics.com

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THE KEY TO GREAT ICE CREAM IS THAT ICE PART.

If you want to get frozen, fresh and refrigerated foods to customers in delicious condition, rely on Penske Logistics. Not only are our trucks equipped with smart technology, our drivers are among the most highly trained and reliable in the industry. The result? An on-time delivery rate of 99.8% – even when it’s 99.8° outside.

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FOR STARTERS

®

FROM THE EDITOR’S DESK

WWW.FOODLOGISTICS.COM

How The Food Chain Moves

A

Published by AC Business Media Inc.

SOWINSKI

t Food Logistics, a considerable amount of our editorial coverage is devoted to the transportation piece of the supply chain, primarily road and to a lesser extent rail. This year we’ve made a concentrated effort to include an equally important — and growing — transportation mode: ocean.

“Growing” may in fact be an understatement. In May, the U.S. Department of Agriculture’s Economic Research Service and Foreign Agricultural Service upwardly revised its forecasts for imports and exports of U.S. farm goods to record breaking levels for FY 2014. All told, exports of U.S. agricultural goods is likely to reach $149.5 billion, while imports too are expected to hit a record high $110.5 billion.

Most of these agricultural imports/exports are moving by ocean carriers through a growing number of U.S. seaports, and this is where the story really gets interesting.

In the past few years we’ve seen a considerable amount of refrigerated food shipments migrate from specialized carriers to containerized carriers. There are several reasons for this shift, including greater overseas demand for fresh/frozen food, lack of capacity and ports of call from specialized reefer carriers, and technology advancements in refrigeration and controlled atmosphere to support a global cold chain.

Likewise, as more agricultural shipments move via containerized vessels, the number of seaports handling food-related shipments is changing and diversifying. Major box ports in the U.S. are seeing an uptick in food-related cargoes, both dry and refrigerated. Many are adding more reefer plugs to accommodate these shipments, while other infrastructure enhancements at or near the ports, such as more cold storage capacity, USDA and CBP inspection services, overweight container corridors, on-dock rail and other features are creating additional opportunities for shippers.

Meanwhile, niche ports with a long history of handling food shipments, whether bulk, breakbulk or containerized, are also seeing more business due to the overall increase in imports/exports.

Del Monte Fresh Produce is one of This month’s cover story profiles some Port Manatee’s largest customers. of the key U.S. ports in the global food supply chain, along with the top import/ export commodities handled by each port and foreign source- and consumer-markets involved in the trade. Going forward, we will continue to expand our coverage of this dynamic sector within the global food supply chain.

Another exciting change is closer to home. Recently, Food Logistics and our sister publication, Supply & Demand Chain Executive, were purchased by a new media company, AC Business Media (www.acbusinessmedia.com). This next chapter holds immense potential for our publications and audience and we are all looking ahead with enthusiasm.

Enjoy the read.

LARA L. SOWINSKI, EDITOR-IN-CHIEF LSOWINSKI@FOODLOGISTICS.COM

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PO Box 803, 1233 Janesville Ave., Fort Atkinson, WI 53538-0803 (800) 547-7377 • www.ACBusinessMedia.com PUBLICATION STAFF Publisher Jolene Gulley Editor-in-Chief Lara L. Sowinski 262-443-5919; lsowinski@ACBusinessMedia.com Assistant Editor Eric Sacharski 920-563-1680; esacharski@ACBusinessMedia.com Managing Editor Elliot Maras 800-547-7377, ext 1693; emaras@ACBusinessMedia.com Ad Production Manager Cindy Rusch 920-563-1664, crusch@ACBusinessMedia.com Art Director Kirsten Crock Senior Audience Development Manager Wendy Chady Audience Development Manager Tammy Steller EDITORIAL ADVISORY BOARD Jaymie C. Forrest, vice president, supply chain practice, Alexander Proudfoot Kam Quarles, director, legislative affairs, McDermott Will & Emery LLP Pamela Erb, vice president of supply chain, Wegmans ADVERTISING SALES East Coast Sales Manager Judy Welp 480-821-1093; Fax: 480-240-4897 jwelp@ACBusinessMedia.com Midwest/West Coast Sales Manager Carrie Konopacki 920-568-8309; Fax: 651-203-0460 1233 Janesville Ave., Fort Atkinson, WI 53538 ckonopacki@ACBusinessMedia.com CIRCULATION & SUBSCRIPTIONS PO Box 3257, Northbrook, IL 60065-3257 (847) 559-7598, 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 Nick Iademarco, Wright’s Media (877) 652-5295, ext. 102 niademarco@wrightsmedia.com AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich Executive Vice President Kris Flitcroft VP Content Greg Udelhofen VP Marketing Debbie George Digital Operations Manager Nick Raether

Published and copyrighted 2014 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 A CROS S THE F O O D SU PPLY C H AIN

USDA Updates Safety Inspection Rules For Poultry The U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) will now require that all poultry companies take measures to prevent Salmonella and Campylobacter contamination rather than addressing contamination after it occurs. For the first time ever, all poultry facilities will be required to perform their own microbiological testing at two points in their production process to show that they are controlling Salmonella and Campylobacter.

These requirements are in addition to FSIS’ own testing, which the agency will continue to perform. FSIS is also introducing the optional New Poultry Inspection System (NPIS), in which poultry companies must sort their own product for quality defects before presenting it to FSIS inspectors. This system allows for FSIS inspectors to focus less on routine quality assurance

tasks that have little relationship to preventing pathogens and instead focus more on strategies that are proven to strengthen food safety.

Seegrid Partners With DMLogic for AGV Software Seegrid Corp., a provider of vision-guided automated guided vehicles (AGVs), named DMLogic as the preferred integration partner for Seegrid Supervisor, a network appliance installed on-site, which communicates with AGVs over WiFi. For customers choosing to integrate Seegrid Supervisor with an existing software system, such as a warehouse management system or manufacturing execution system, DMLogic created a standard application programming interface (API), providing a platform for

Image from Seegrid.com.

capturing and exchanging tasks automatically with Seegrid AGVs. Automating transactions creates a seamless channel between the Seegrid Supervisor, customer’s software system, and Seegrid AGVs. The DMLogic API automates the exchange of task level information between a customer’s software system and Seegrid Supervisor. Tasks are captured and queued for the disposition of the AGVs; once the movements are finished, notifications are automatically confirmed back to the host software system updating the task as complete.

Hackers Breach Payment Networks At Alberton’s and Supervalu Over the summer, hackers broke into the credit and debit card payment networks at Albertson’s and SuperValu. The hack impacted the chains’ umbrella of stores as well, including Albertson’s Acme, Jewel-Osco, Shaw’s and Star Market supermarkets, along with SuperValu’s Cub Foods, Hornbacher’s, Farm Fresh, Shop ‘N Save and Shoppers Food & Pharmacy.

Paradox Partners With Supply Chain Network To Facilitate Expansion In Europe Supply Chain Network (SCN) announced a partnership with Paradox that will provide Paradox’s products to European shippers and carriers and facilitate Paradox’s expansion into Europe. The partnership will provide European shippers, carriers and 3PLs access to Paradox’s products along with SCN’s services providing a one-stop shop for all their logistics software and service needs.

According to Ellie Glenn, president of Paradox, the agreement with SCN “culminates several discussions we had with them in the last few months that emphasized the need for competitive logistics software solutions for the UK and Western Europe markets.”

U.S. Imports of Cocoa

Value USD (Millions)

U.S. Imports of Cocoa

U.S. imports of cocoa totaled over $2.9 billion so far this year (Jan-July 2014). Cocoa imports are up over 19% compared with the same time in 2013. Cocoa beans are the top cocoa product imported in the United States and the majority of U.S. cocoa imports originates in Cote D'ivoire.

$600 $500 $400 $300 $200 $100 $0

All data provided by Zepol visit zepol.com for a Free Trial

Countries of Origin Jan-July 2014 by total value Cote D'ivoire

27%

32%

Canada Mexico

22% 5% 5%

Ghana

9% 8

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Indonesia

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All Others

Top Cocoa HTS Imports (Jan-July 2014) HTS Code Value (US$) 1801000000 -­‐ Cocoa Beans, Whole/Broken $1,029,446,517 1804000000 -­‐ Cocoa Butter, Fat And Oil $384,031,500 1806909019 -­‐ Cocoa Preparations $236,281,162 1806205000 -­‐ Chocolate, Bulk Forms $180,444,311 1806329000 -­‐ Chocolate & Food Preparations $174,088,518 1806909090 -­‐ Cocoa Preparations $166,093,295 1805000000 -­‐ Cocoa Powder, No Sugar $153,598,446 1806310049 -­‐ Chocolate $80,605,280 1806909011 -­‐ Cocoa, No Sale, Peanuts $79,677,401 1806323000 -­‐ Chocolate, Blocks Slabs $78,158,436 All Others $373,768,733

Source: Zepol, www.zepol.com www.foodlogistics.com

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SUPPLY SCAN

NEWS FROM A CROS S THE F O O D SU PPLY C H AIN

Popcart Allows Online Ordering From Web Recipe Sites Online fresh food grocer FreshDirect and Foodily, the social recipe network, recently launched Popcart, a web technology that instantly turns any online recipe into deliverable groceries.

Developed and powered by Foodily, Popcart allows consumers to browse any recipe--across more than 150 million food websites and blogs--and integrates the ingredients right into a shopping cart. FreshDirect is the first food business to launch this technology.

Shopping recipes requires the following steps: 1) download the Popcart bookmarklet; 2) highlight ingredients from any online recipe and “Popcart it” 3) customize the order to dietary needs and preferences; and 4) check out and FreshDirect will deliver the order as early as the next day.

Popcart is currently available in FreshDirect service areas: Greater New York, New Jersey, Connecticut metro areas and the Philadelphia area, including Delaware.

Manhattan Associates Buys GlobalBay Technologies Manhattan Associates, Inc. has acquired the assets of GlobalBay Technologies from VeriFone. The acquisition extends Manhattan’s omnichannel inventory and order management solutions by enabling in-store sales and clienteling capabilities. The combination of Manhattan’s Enterprise inventory visibility, order management and store solutions with GlobalBay’s point-of-sale and clienteling applications will deliver an omnichannel sales and fulfillment platform.

“Our decision to acquire GlobalBay was driven primarily by our

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customers asking us to extend our omnichannel scope within their stores. Moving beyond inventory and fulfillment and into sales and clienteling is one way we’ll provide a comprehensive store platform with omnichannel at its core,” said Eddie Capel, Manhattan Associates’ CEO. “For our customers, this means that they will now have the ability to unlock the information that presents a single view of customers, orders and inventory.

This unique combination allows our customers to provide a complete sales and clienteling solution, including best-in-class inventory and order management capabilities to their stores and deliver the retail experience that the new, omnichannel shoppers expect,” added Capel.

Trimble Partners With 3GTMS And TMW Systems Trimble has entered into a strategic alliance with 3GTMS, Inc., a privately-held provider of transportation management systems (TMS).

The alliance includes an equity investment in 3GTMS by Trimble and a commercial reseller agreement with TMW Systems, part of Trimble’s transportation and logistics division. 3GTMS offers 3G-TM planning and shipment management software that will be marketed

by TMW Systems as part of its transportation solutions portfolio.

3G-TM can be integrated with TMW’s enterprise transportation management software to provide the first single-source solution for running both asset-

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based and non-asset transportation service organizations. The combined solution addresses the rapidly emerging IT needs from the operational convergence among motor carriers, 3PLs and brokers.

ReeferTek USA Expands With Northeast Facility ReeferTek USA, the refrigerated van outfitter, announced the grand opening of its state-of-the-art ReeferTek Northeast manufacturing facility. Located in Copiague, N.Y., ReeferTek Northeast will service the greater New York City area and Long Island. ReeferTek USA has manufacturing opportunities available in other regions throughout the U.S. “This is a time of tremendous growth for ReeferTek USA,” said Michael Leibman, president of ReeferTek USA. “We want to personally thank all of the dealers who rely on ReeferTek to deliver the highest quality refrigerated vans. Our commitment to you remains the same. We will continue to provide exceptional products with unparalleled customer service. ReeferTek USA headquarters will still drive the brand integrity and innovation of our future.”

Cold Train Iced As BSNF Juggles Higher Rail Volumes Cold Train Express suspended its Quincy-to-Chicago service after executives said increased congestion across BNSF Railway’s northern routes slowed Cold Train delivery times and cut business up to 70 percent, according to The Wenatchee World in Wenatchee, Wash.

Quincy’s refrigerated rail service has been squeezed to one train a day by increased rail traffic caused by a surge in North Dakota’s oil and coal trains, said company officials. Delays and schedule changes have doubled Cold Train delivery times to six days and greatly increased fuel and equipment costs, they said.

The company said customers have canceled most ship-

ments of fresh fruit and produce, which accounts for 70 percent of Cold Train’s business.

Cold Train, a key link in delivering North Central Washington fruit and produce to East Coast markets, said BNSF has given priority to high-income oil and coal customers, a situation that’s “resulted in millions of dollars in operating losses and millions of dollars in capital investment losses, both of which are simply unsustainable” for the 4-year-old Cold Train company.

BNSF Railway disagreed. “We are not providing favored service for oil over other commodities,” said spokesman Gus Melonas. “We were disappointed to hear they (Cold Train) were suspending their operation, as we had been working with Cold Train for the past few months to provide them with options that would allow them to continue to operate this service.”

Melonas said increased volumes across the railroad’s northern lines have required schedule changes that have affected some customers.

But rail service in Washington and along the company’s northern corridor is improving, he said, as the company adds new locomotives, improves track conditions and hires new employees. The railway could hire up to 600 new employees in Washington this year, he said.

Port of Quincy Commissioner Patric Connelly said port officials will reassess Cold Train’s suspension of service. Cold Train uses the port’s Intermodal Terminal as its western distribution hub.

Congested Rotterdam Port Takes Corrective Measures The Port of Rotterdam announced a series of measures to eliminate congestion at two large container terminals and free up quay and labor capacity for oceangoing vessels, according to the Journal of Commerce. Inland waterway barges and feeder ships transporting export and import containers will be diverted from the www.foodlogistics.com

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SUPPLY SCAN

NEWS FROM A CROS S THE F O O D SU PPLY C H AIN

congested ECT Delta and Euromax terminals to three smaller terminals to be “bundled” for onward shipments to the larger facilities.

Efforts to ease congestion at the Delta and Euromax terminals “have not had the desired effect up to now,” the Port Authority said.

“The inconvenience experienced by the port’s customers and users is of such magnitude that the Port of Rotterdam has taken the initiative of developing solutions to this problem,” it added.

Nova Cold Storage Builds New Facility In Halifax Nova Cold Storage is building a $9.5-million storage facility at the Atlantic Gateway-Halifax Logistics Park, according to The Chronicle Herald in Halifax, Nova Scotia, Canada. “The ability to purchase land in such a central location is what enticed us to build this modern warehouse,” company president Barry Smith said. Nova Cold is expanding to accommodate its frozen fish and processed food storage business, which serves processors, exporters and freight forwarders.

The 60,000-square-foot, coldstorage, trans loading facility on Wilkinson Avenue in Dartmouth will house 5,500 pallets, enough to fill 250 ocean containers. Smith said the new facility will give the company more than twice the pallet capacity of its existing cold storage space on Thornhill Drive, which will be closed.

Click-And-Collect Surges In The U.K. Compared To The U.S. Click and collect continues to rise in popularity in the U.K., and the increased demand is putting pressure on retailers to meet

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consumers’ desire for more online shopping services, according to Econsultancy. This trend has led to a particularly advanced market in the U.K., especially when compared with the U.S. While both markets saw growth between 2012 and 2013, respondents in the U.K. were far more likely to use this service — 45 percent of the country’s Internet users said they had used such a service last year, versus just 20 percent of U.S. Internet users.

Preferred Freezer Services Expands Cold Storage Capacity In Miami, Fla. Area Preferred Freezer Services (PFS), a provider of advanced design and engineered temperaturecontrolled warehouses, announced the newest addition to its expanding footprint in South Florida. The new Miami area facility is the company’s fourth cold storage facility in Florida and the 30th in the U.S. The new facility has 9 million cubic feet of storage capacity, a 20,000-square-foot dock for loading and unloading, 12 dock doors, an oversized truck yard space, and a customer favorite PFS online information system that is avail-

able 24/7. The facility is capable of performing on-site inspections and offers packing and labeling services.

The facility is located in close proximity to all major roadways.

“We are pleased to open another new cold storage location to meet our growing customer needs in South Florida. Our team is excited to start servicing customers from this great location,” said Brian Beattie, president of Preferred Freezer Services. Preferred Freezer Services of Miami

• FOOD LOGISTICS

is now open and accepting product. For information, visit www.PreferredFreezer.com.

India’s Ready-To-Eat Market Set To Grow 22 Percent Annually Through 2019 India’s ready-to-eat (RTE) food market is projected to grow at a compound annual growth rate of around 22 percent from 2014 to 2019, according to a report by TechSci Research.

The market is anticipated to grow on account of an increasing working population, growing per capita disposable income, rising per capita expenditures on prepared food, increasing middle class and affluent consumers, etc.

While the rising per capita disposable income of consumers, especially the upper and lower middle income group, is driving India’s RTE food market, a large chunk of Indian consumers are still price conscious, which poses a challenge for RTE food manufacturers and suppliers. Further minor variation in prices directly affects the preference of products among the Indian consumers. To offset this challenge, major players are increasingly focusing on offering high-quality RTE food products at lower prices.

Allen Distribution Expands Warehouse Space In Carlisle, Pa. Allen Distribution, a 3PL based in south central Pennsylvania, is constructing a new 500,000-squarefoot warehouse in the Mid-Atlantic region’s busiest transportation corridor along Interstate 81 in Carlisle, Pa. The new facility, which will feature 50 dock doors and more than 100 trailer parking spaces, will consolidate the space of five smaller leased spaces and bring Allen’s total distribution capability in the area to nearly 3 million square feet.

Expected to open in November 2014, the warehouse property will occupy over 36 acres immediately off exit 44 off Interstate 81. The facility will feature 32-foot, clear-height, highefficiency lighting with motion sensors, and more than 200,000 square feet of cooler storage.

“Our new facility offers additional scale to support our growth, and the growth of our customers, while solidifying our position as a leading provider of custom logistics services,” said President Ryan Heishman. “We’re extremely pleased to be able to offer customers even greater service capabilities from one of the country’s most strategic logistics locations.”

AGRO Merchants Group In Charleston, S.C. To Upgrade Cold Storage Facility AGRO Merchants Group in Charleston, S.C. is upgrading a 121,000-square-foot cold storage facility to include 14,000 frozen pallet positions, USDA meat import and export inspection services and blast freezing cells. The facility will provide storage, handling and other value-added services for its import and export customers. Primus Builders, based in Atlanta, Ga., was selected to provide professional services on this project.

The new blast cells will feature a CO2 refrigeration system and will be capable of 24-hour freeze time. They will also be equipped with LED lights and controlled by a central computer system.

The USDA laboratory will be designed to meet all food safety inspection criteria. Office and support spaces will also be included.

Primus Builders Executive Vice President Erik Gunderson noted, “Primus has developed a strong relationship with AGRO Merchants Group. We look forward to bringing them our port experience and making the Charleston project another successful partnership.” www.foodlogistics.com

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© 2014 C.H. Robinson Worldwide, Inc. All Rights Reserved. www.chrobinson.com

Ideas as Good as Gold There’s more to saving money than cutting expenses. In fact, spending in the right areas of your supply chain—when done wisely—can positively impact your bottom line. Integrating innovative solutions, alternate freight options, and a broad array of services into your supply chain can help safeguard against unnecessary logistics costs.

accelerateyouradvantage.com www.foodlogistics.com

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FOOD ON THE MOVE LOGISTICS TRENDS IN OUR INDUSTRY

Square, which provides a mobile payment reader, announced that it has acquired Caviar, a rapidly growing company that allows buyers to get delivery from top-rated restaurants that do not otherwise offer delivery. For restaurants, Caviar is an affordable, convenient alternative to an in-house delivery solution and drives additional revenue.

With the acquisition, Square deepens its commitment to providing independent sellers with services that make it easier for them to grow their business.

Google Tests Package Delivery Drones

G

oogle’s secretive research laboratory is trying to build a fleet of drones designed to bypass earthbound traffic so packages can be delivered to people more quickly, according to news reports. The program escalates Google’s technological arms race with rival Amazon.com Inc., which also is experimenting with self-flying vehicles Google tests its Project Wing drones in Australia. to carry merchandise bought by customers of its online store. Google Inc. calls its foray into drones “Project Wing.” Although Google expects it to take several more years before its fleet of drones is fully operational, the company says test flights in Australia delivered a first aid kit, candy bars, dog treats and water to two farmers after traveling a distance of roughly one kilometer, or just over a half mile. Google’s video of the test flight can be seen at: https://www.youtube.com/watch?v=cRTNvWcx9Oo.

Peapod Adds Fee For Store Pick Up

Uber Launches Same-Day Grocery Delivery Service In U.S. Taxi and private car hire service Uber has launched a grocery delivery service in the U.S., according to the British Broadcasting Corp. (BBC) The Corner Store facility is available as an option via its main smartphone app and covers more than 100 items.

The products are competitively priced against high street stores, and there is no delivery fee.

The service is limited to Washington D.C. at this time, but it makes Uber the latest in a series of tech firms to move into the sector.

Amazon operates AmazonFresh, a sameday “fresh produce and grocery” delivery service, in California and Seattle.

Online grocer Peapod will implement a fee for its store pick-up service beginning in September, reported Supermarket News. Store pick-up customers will be charged $2.95, with a minimum order size of $60. The service — available at Ahold’s Stop & Shop and Giant stores — previously was free, with no minimum order.

Peapod announced the change in an email to customers: “We kept it as close to free as we possibly could. But it’s true — we have to start charging a fee for pick-up orders… We hope you agree it’s worth it.”

The service lets shoppers choose their groceries online or via a mobile app. Pick-up clients then go to their store, and their groceries are loaded into their cars. The Peapod email encourages users to sign up for the Peapod Pod Pass, which charges a fee for unlimited home delivery or pickup services. A 3-month Pod Pass costs $39; 6-month, $59; and one year, $99.

AP photo

Square Buys Caviar, Expands Into Food Delivery

on GenKey purchase order from Wal-Mart Stores, Inc. to add a seventh GenKey site to support GenDrive fuel cell powered lift trucks.

This additional site in Sterling, Ill. consists of 286 GenDrive fuel cell units and is planned to deploy in the third quarter of 2014.

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Walmart Expands Hydrogen Fuel Cell Vehicles Plug Power Inc. has received a follow-

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FOOD ON THE MOVE LOGISTICS TRENDS IN OUR INDUSTRY

gen fuel cell power solution, combining: GenDrive fuel cell units; GenFuel infrastructure construction and hydrogen fuel supply; and GenCare on-site maintenance service.

In February 2014, Plug Power received a GenKey order from Walmart to roll out 1,783 GenDrive fuel cells in the forklift fleets at six sites across North America. The first of these sites, in Pottsville, Pa., was brought successfully on line during the second quarter of 2014.

Plug Power deployed almost 300 GenDrive fuel cell units in Walmart’s class-2 and class-3 electric lift trucks.

U.S. Approves Chilean Carrier Merger With Hapag-Lloyd U.S. authorities have approved the merger of the container shipping business of Chilean ocean carrier Compañía Sud Americana de Vapores with German container line HapagLloyd, according to Port Technology International. The merger will reportedly create the world’s fourth largest carrier.

Clearance for the merger was granted recently by the U.S. Department of Justice and the Federal Trade Commission.

The move forms part of the consultation process to regulatory authorities that both companies are carrying out in order to merge their container businesses.

DP World Vancouver Stops Accepting U.S. Bound Cargo DP World Vancouver will stop accepting U.S.-bound containers intended for direct transfer to rail, citing a lack of railcars to handle the surge of cargo headed across the border, according to Journal of Commerce.

The operator of the Centerm Terminal will continue to handle U.S.-bound cargo moving by truck either to the regional market or to a nearby container yard. Since the beginning of 16

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the month, the Dubai-based terminal operator has waived demurrage for rail containers diverted to truck transport and moved from its terminal, according to a letter sent to DP customers and obtained by JOC.com from a port customer who suggested that other terminals could soon follow DP World Vancouver with a similar policy.

Nicaragua Prepares Inter-Oceanic Canal The inter-oceanic canal project in Nicaragua is expected to begin soon, according to Nicaraguan radio station La Primerisima. It will be between 230 and 530 meters wide and 26 to 30 meters in depth.

Chinese entrepreneur Wang Jing, owner of HKND Group, whose firm holds the concession to build the Nicaragua Grand Canal, recently visited the country to lead a delegation that will announce the chosen canal route and other project details.

According to La Primerisima, “The canal could be partially ready by 2019 and able to handle the transportation of up to 416 million metric tons, representing 3.9 percent of the world’s maritime cargo.

The route of the Nicaragua inter-oceanic canal will cross through the mouth of the Brito River, south of Rivas, north Tule River and the entry of Punta Gorda River. This route will cross the country from east to the west with a total length of 278 kilometers, including a stretch of 105 kilometers in the Cocibolca Lake.”

Diamond State Port Corp. And Chiquita Sign Lease Agreement The Diamond State Port Corp. (DSPC) and Chiquita Brands have recently reached an agreement by which Chiquita will continue to use the Port of Wilmington as its mid-Atlantic distribution hub for the next

five years. Also, this agreement includes two 5-year lease renewal options which will extend Chiquita’s relationship with Wilmington until 2029. With the retention of Chiquita’s business, the Port will continue to handle more bananas than any other port in North America.

In 1988, Chiquita consolidated its midAtlantic supply chain operations at the Port of Wilmington, now its largest port operation in North America. It leases 28.7 acres at the port and its vessels make approximately 52 port calls annually. Chiquita operates a fully containerized service between Central America and Wilmington discharging bananas, pineapples and other tropical fruit and vegetables, and loading back forest products, used automobiles and general cargo.

“We are extremely pleased that Chiquita has decided to sign a new lease with the port and continue our long and ‘fruitful’ relationship,” said Gene Bailey, executive director of the DSPC. “Chiquita is a most important customer and responsible for hundreds of jobs and the resultant and significant economic impact to our port, state and region. We are grateful to the governor and the General Assembly for the support which has allowed us to make those capital equipment acquisitions and infrastructure improvements needed to retain Chiquita’s business despite a very competitive environment,” Bailey added.

“The Port of Wilmington is an important destination for Chiquita and our customers,” said Mario Pacheco, Chiquita’s senior vice president, global logistics. “We are pleased that we have reached an agreement that will enable us to continue to call Wilmington home for many years to come. Wilmington is a great partner for Chiquita and we look forward to growing our business together in the years ahead.”

Willow Run Foods Adds Cadec Software To Run CNG Vehicles Willow Run Foods has added Cadec’s PowerVue software to its compressed natural gas (CNG) fleet of vehicles. Willow Run Foods specializes in food distribution for fast food chains throughout the Northeast. As part of the company’s alternative transportawww.foodlogistics.com

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FOOD ON THE MOVE LOGISTICS TRENDS IN OUR INDUSTRY

tion project, the CNG trucks will run mostly in New York City, Long Island and northern New Jersey, helping to offset a high-traffic region with significant greenhouse gas emissions. When used for transportation fuel, natural gas can reduce greenhouse gas emissions when compared to petroleum fuels.

Cadec’s PowerVue is an SaaS-based fleet management system, providing fleet management features in a single, easy-to-use, secure and reliable system combined with in-cab hardware designed specifically for the private fleet customer.

Willow Run Foods is using PowerVue to track the CNG vehicles’ fuel consumption, along with other valuable driver and fleet information such as driver behavior and productivity, on-time delivery data, vehicle operation and safety.

Clean Energy Opens 27 Natural Gas Fueling Stations Clean Energy Fuels Corp. announced the completion and opening of 27 natural gas fueling stations in the first half of the year, nine of which are America’s Natural Gas Highway stations. Upgraded equipment and additional compression capacity have also been added to 10 existing stations to keep pace with growing natural gas fuel demand.

Additional fueling and station development agreements representative of Clean Energy’s growing portfolio of natural gas fueling customers were also announced.

Papa John’s Improves Fleet Performance With Isotrak TMS Papa John’s Food Service (PJ Food Service) reports having more visibility over its fleet after using Isotrak’s Active Transport Management System, according to Isotrak. By 18

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measuring and monitoring arrival and departure times, idling time and miles per gallon, fleet managers can make proactive and informed decisions. PJ Food Service improved its rate of on-time deliveries by more than 25 percent and its rate of on-time departures by more than 30 percent over the course of 2013.

The platform integration capabilities were key to selecting Isotrak because PJ’s Food Service did not want a host of stand-alone systems, according to an Isotrak white paper.

They needed a solution that would allow for integration into their existing systems so that from the time the order was placed to the time the truck returned empty, they would have full visibility and metrics delivered on one platform.

Kroger Builds Distribution Center In Forest Park, Ga. Kroger recently broke ground on a distribution center in Forest Park, Ga. The new facility is expected to create 120 jobs. The new facility will service existing operations in Alabama, Georgia, South Carolina and Tennessee. Kroger Atlanta Division President Bruce Lucia commented, “We can get to our stores quickly from here. We have such great road systems in Georgia today.”

PAS Supports Yearsley Logistics’ Freezer Project In U.K. Yearsley Logistics, the United Kingdom’s largest distributor of frozen foods, has begun the second phase of a three-part, £5 million expansion of its freezer “superhub” warehouse adjacent to the group’s headquarters in Heywood, England. The expansion, which uses PowerStor® technology from Power Automation Systems (PAS), will provide an additional 50,000 square feet of space which provides 12,000 extra pallet sites, bringing the total to 60,000 pallets at Heywood.

The cold store uses a combination of PowerStor technology integrated with mobile racking for the most economical and energyefficient storage process to meet the through-

put and storage needs of Yearsley Logistics’ frozen food customers.

“The PAS system helps to speed up the customer ordering process and improves productivity, as well as having environmental benefits in relation to less door openings and lighting,” said Harry Yearsley, CEO of Yearsley Logistics.

Seaboard Foods’ TruStar Energy Opens CNG Fueling Station TruStar Energy, a developer of compressed natural gas (CNG) fueling infrastructure throughout the U.S., celebrated the grand opening of the High Plains Bioenergy (HPB) fast-fill CNG station which is located across the road from their Guymon, Okla. processing facility. This station is HPB’s first public station and offers 24/7 access. The addition of the HPB CNG fueling station ensures the availability of CNG to Seaboard Foods’ fleet, but also provides a fuel source for the growing number of CNG vehicles in the Oklahoma Panhandle. Seaboard Foods and its integrated food system produce premium pork products by controlling every step of the way, from before the farm to beyond the fork. The expansion of their CNG fleet and launch of their public CNG filling station aligns closely with their commitment to be environmentally responsible in the communities in which they work.

Oceanographic Real-Time System Launches In Jacksonville, Fla. National Oceanic and Atmospheric Administration (NOAA) officials recently joined local maritime leaders at a ceremony dedicating a new sensor system designed to save money, improve safety and enhance research regarding conditions in the St. Johns River. The $2.8 million Physical Oceanographic Real-Time System (PORTS®) offers data from 18 stations comprised of 46 sensors located along 67 miles of the St. Johns River in Northeast Florida. The system provides instant tidal and weather information to commercial, military and recreational users, and compiles invaluable research data for use by academic institutions, environmental scientists and agencies. www.foodlogistics.com

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COOL INSIGHTS

Refrigerated Load-to-Truck Ratios

B Y M A R K M O N TA G U E

HOS Rules and Higher Rates

HOS and higher rates What has this meant for supply chains? A survey from the American Transportation Research Institute (ATRI) found that 80 percent of carriers lost productivity due to the HOS changes, with 50 percent noting that they need more drivers to maintain the status quo in terms of freight-hauling capacity.

ATRI analyzed 40,000-plus driver logbooks and concluded that the new rules result in a loss of 7.5 minutes to 30 minutes per week per driver. This equates to a cost of $95.06 million to $376.94 million per year, as well as a net loss of $1.6 billion in driver compensation.

Carriers naturally want to recover these costs, and they’re making gains. Charting our data at DAT, we can see how an HOSinduced productivity loss corresponded with

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© 2014 DAT Solutions

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increased rates.

7.2 Let’s go back to 7.1 the third quarter of 2013, just after 5.2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec the new rules took effect. Instead of sharp Q3 decline, Van Line Haul Rates & Load-to-Truck Ratio spot market van August 2011-2014 rates (the orange 6.0 $1.70 line) rose and Van Line Haul Rate remained elevated $1.60 5.0 Van Load-to-Truck Ratio through the third $1.50 4.0 quarter. At the end $1.40 3.0 of Q4, these rates rose even further to a $1.30 2.0 peak in March 2014 $1.20 1.0 when severe weather $1.10 constrained truck0.0 $1.00 load capacity.

Rates reached a high again in June, when truckload freight volume on the spot al average of $2.28 per mile in August (includmarket was up 50 percent compared to ing a fuel surcharge), spot rates remained the previous year. In July, freight volume strong for reefers through the summer, exceedincreased 40 percent for vans, 28 percent for ing August 2013 averages by 9.1 percent. reefers, and 52 percent for flatbeds year-overyear. The increased demand, together with What next? capacity constraints, caused national average In the short term, the Christmas freight spot market truckload rates to rise year-overseason is not far off and consumer confidence year for all major equipment types: the van is up, which means there will be “exception” rate rose 15 percent, the refrigerated rate was freight — goods that aren’t under contract — up 6.3 percent, and the flatbed rate rose 15 possibly lots of it. percent compared to July 2013.

With demand increasing, and carriers and Van rates follow closely behind trends in drivers having to keep a more watchful eye the load-to-truck ratio (purple line), an indion the HOS clock, spot market rates have cator of demand versus available spot-market continued to rise. As a forecasting tool, spot capacity. For the month of August, the avermarket rate trends are a valid indicator of age van load-to-truck ratio was 3.3, meaning where contract rates will go. Anticipate an there were 3.3 available loads for every availincrease starting with the Q1 bidding season. able van posted on DAT load boards. That’s a 5.2 percent increase compared to July, and 25 Mark Montague is manager, industry rates, percent above the level of August 2013. for DAT Solutions, which operates the DAT® Now let’s look at capacity and demand for network of load boards. As a mathematician refrigerated freight. The load-to-truck ratio and statistician, he has applied his expertise for August was 10.1, a sharp 11 percent jump to logistics, rates and routing for more than from July and 24 percent higher compared to 30 years, and was instrumental in developing August 2013. Typically, reefer load-to-truck DAT’s RateView truckload rates and analysis ratios flatten out or rise slightly in August product. He is based in Portland, Ore. For before making an autumn decline. At a nationinformation, visit www.dat.com. ◆ Aug 11

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hen new federal hours of service (HOS) regulations took effect on July 1, 2013, the intent was to reduce fatal crashes on the highway. Whether that’s actually happening is another subject altogether, but there’s little doubt that the rules have hindered productivity and led to higher rates for anyone who ships freight over the road.

The most contentious rule change involves the 34-hour restart. Drivers are allowed to “restart” their 60- or 70-hour service clock after having at least 34 consecutive hours off duty. The rule now requires the restart period to include at least two off-duty periods from 1 a.m. to 5 a.m. (home-terminal time zone).

Furthermore, the use of the restart is limited to once a week (once every 168 hours).

These twists on the restart provision tend to put a disproportionate share of trucks on the road in major metro areas during morning rush hours. Furthermore, drivers who are accustomed to working nights are forced to re-set their schedules during their off-duty hours, disrupting normal sleep patterns. Also, timing mandatory breaks can be tricky for long-haul drivers who are on tight timetables and may have trouble finding safe and legal parking spots at precise intervals.

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C O V E R

S T O R Y

KEY PORTS & CARRIERS

In The Global Food Supply Chain From major gateways to niche players, U.S. ports play an expanding role in the handling of bulk and containerized food shipments.

BY LARA L. SOWINSKI

H

ere’s a quick snapshot of some of the key U.S. ports in the global food supply chain along with some of the leading ocean carriers who are making waves in this important and growing sector…

Port of Baltimore (MD)

The Port of Baltimore is the 13th largest container port in the U.S., according to Zepol’s latest ranking. In 2013, the Port handled 328,269 import TEUs from companies such as Costco Wholesale and Heineken. Currently, Baltimore is one of only two ports on the East Coast ready to accept the newly defined Panamax vessels, which positions the port to take advantage of increased business opportunities ushered in with the expansion of the Panama Canal, noted MTC Logistics’ President Brooks Royster. MTC Logistics, an operator of temperature-controlled facilities, is expanding its Port of Baltimore distribution center. The project is due for completion at the end of the third quarter, boosting the facility’s capacity to 9 million cubic feet with approximately 32,000 racked pallet positions.

Port of Beaumont (TX)

Bulk grains are the leading agricultural export for the Port of Beaumont, with most shipments headed to markets in Nigeria (28 percent), Israel (22 percent), Peru (14 percent) and Iraq (12 percent). The Port features a 3.5 million bushel grain elevator capable of loading 80,000 bushels per hour. On the import side, the Port handled

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just over 47,000 metric tons of canned pineapple on bulk vessels in 2011, according to the latest figures from the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS). Beaumont is served by three major rail carriers, five major roadways and is connected to the U.S. interior by the Intercoastal Waterway and Mississippi River.

Rice exports are a key commodity for the Port of Stockton, located in California’s Central Valley, one of the world’s primary agricultural regions.

It’s also the West Coast’s second-busiest inland port after Portland. and seafood products such as haddock and lobster. Mediterranean Shipping Co. (MSC), COSCO, K-Line, Hanjin Shipping and Yang Ming are among the top carriers.

Port of Corpus Christi (TX)

The Port of Wilmington, Delaware is a major midAtlantic import/export gateway for a variety of cargoes, including agriculture.

Port of Boston (MA)

The Port of Boston is one of the 20 largest container ports in the U.S. Among the Port’s top import customers are Heineken, United Liquors, Anheuser Busch, and BJs Wholesale Club. Seafood processing operations generate significant revenue for the Port and local economy, supporting hundreds of jobs at/near the Port, including Boston Logan International Airport. The Port’s close proximity to Logan Airport allows quick distribution of fresh fish

Agricultural exports at the Port of Corpus Christi are led by bulk grains and oilseeds destined primarily for Nigeria, Mexico and China.

The Port also handles 2 percent of total U.S. soybean exports (534,553 metric tons). With rail traffic experiencing a 100 percent jump over the last five years, Port officials are in the midst of expanding rail infrastructure to meet growing demand. In June, the Port awarded construction of the first phase of its Nueces River Rail Yard project to Haas-Anderson Construction.

Port Everglades (FL)

Florida’s Port Everglades’ top agriculture importers include Chiquita and Dole Fresh Fruit while Crowley and MSC are among the top carriers. On the export side, grocery items make up nearly half (48 percent) of the shipments, followed by poultry, non-alcoholic beverages and fruit. Leading markets for the Port’s export shipments include the Netherlands Antilles, the Bahamas and Cuba. Port Everglades www.foodlogistics.com

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Courtesy Port of Stockton.

Cold Storage provides nearly 100,000 square feet of variable temperature-controlled refrigerated storage.

Port Freeport (TX)

Boasting a 45-foot deep channel, the Gulf Coast’s Port Freeport is a key port for banana importers Dole Fresh Fruit and Chiquita Brands International. Annually, the Port handles about 60,000 TUEs, mostly bananas. Two newly received cranes at the Port could potentially double its productivity and help retain business from Chiquita and Mediterranean Shipping Co. (MSC). The 80-foot wide cranes have a lifting capacity of 75 tons and will occupy a portion of Berth 7 at Velasco Terminal.

ized import shipments. The Port is also a major import gateway for guar gum, molasses and beer.

Recently, the Port launched a pilot program to import summer citrus from South Africa, one of the world’s largest citrus exporters. South African citrus exporters see the Port of Houston as strategically positioned to serve consumers in the U.S. Southwest and Midwest. The growing/shipping season for South African citrus also complements domestically produced citrus, which is less available from June through October.

Port of Hueneme (CA)

Last October, Del Monte Fresh Produce signed a five-year lease extension with the Port of

Hueneme, located about 65 miles

north of Los Angeles. Del Monte ships

fresh bananas, pine

apple, honeydew and cantaloupe through the Port,

which offers perishable shippers a total 223,000 square feet of refrigerated terminal space along with the ability to handle containerized

chilled and frozen cargoes through

dedicated on-dock yards. Yara, one of the world’s largest fertilizer

suppliers, operates a 9.3 million

gallon tank farm at the Port to distribute fertilizer products throughout the U.S. Southwest.

Port of Jacksonville (FL)

The Port of Jacksonville ranked 20th in the U.S. for total waterborne agricultural exports and 10th for containerized waterborne agricultural exports, according to the most recent stats from the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS). Lumber, phosphate, paper, cigars, and wood pulp are the primary exports with coffee a major import. Among the Port’s infrastructure projects, JAXPORT is constructing an intermodal container transfer facility next to the Dames Point Marine Terminal to speed containers from vessels to rail carriers.

Port Manatee is one of Florida’s largest and fastest growing deepwater ports with a strategic position on the Gulf of Mexico at the entrance to Tampa Bay. Del Monte is a key customer.

Port of Galveston (TX)

Agricultural exports shipped from the Port of Galveston are comprised mostly of bulk, unrefrigerated commodities such as grain and grain products (cereal, flour) destined primarily for Mexico, Egypt and Nigeria. Imports of agricultural commodities are led by bananas, pineapple and other fruit with Guatemala the top origin country (75 percent), as well as sugar and tea. Recently, Gulf Stevedoring Service invested in a mobile harbor crane for its operations at Del Monte Fresh Produce at Pier 18/Galveston Wharves.

Port of Houston (TX)

Red Bull and Heineken are among the top importers at the Port of Houston, which ranks as the eighth-largest U.S. port for containerwww.foodlogistics.com

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Hamburg Sud’s Spirit of Singapore arrives at the Port of Philadelphia from Australia and New Zealand carrying meat, dairy products, wine and more. The return voyage will carry U.S. agricultural exports and other cargo from Pennsylvania, the U.S. Northeast and Canada.

grocery items, and oranges. MSC is the Port’s number one carrier for agricultural exports.

Maersk Line boasts the largest fleet of refrigerated containers in the world to handle growing volumes of imports and exports.

Port of Kalama (WA)

With a strategic location on the Columbia River, Washington State’s Port of Kalama is a major export port for bulk grains, soybeans, and other grain products destined mostly for China and Japan. Between 8 and 11 million tons of grain are exported from the Port annually, supplied by states such as Oregon, Washington, Idaho, Montana and North Dakota. The Port of Kalama’s industrial area features seven miles of riverfront property adjacent to the Columbia River with rail service from BNSF and Union Pacific.

Port of Long Beach (CA)

One of the U.S.’ leading box ports is a major trade gateway for containerized agricultural imports and exports. The top export commodity (by volume) is animal feed, which comprises 28 percent of the Port of Long Beach’s agricultural exports. Other leading export commodities include soybeans, grain products, cotton, meat,

Port of Los Angeles (CA)

Similar to the Port of Long Beach, the Port of L.A. is a major export gateway for containerized animal feed shipments headed to Asian markets, especially alfalfa hay for China’s burgeoning dairy industry. China ranks as the top global importer of U.S. alfalfa, surpassing the United Arab Emirates and Japan. The Port of L.A. also handles imports of fruit, beverages, shrimp/prawns, grocery items, rice/crackers/ pasta, and beer/ale.

Port Manatee (FL)

Primary cargoes at Port Manatee include tropical fruits and vegetables along with citrus juices and beverages. Located on Florida’s Gulf Coast, the Port is the closest U.S. deepwater port to the Panama Canal. Port Manatee offers 202,000 square feet of refrigerated space, including 30,000 square feet of freezer space.

Port of Miami (FL)

Grocery items, non-alcoholic beverages and grapefruit comprise the majority (60 percent) of the Port of Miami’s agricultural exports with Japan, the Dominican Republic and Haiti mak-

ing up the top destinations for these shipments.

Seaboard Marine, which offers direct, regular service between the U.S. and the Caribbean Basin, Central and South America, is a major ocean carrier at the Port. Its fleet of refrigerated containers, which uses only ozone-friendly refrigerants, is one of the newest in the industry.

Port of Mobile (AL)

Alabama’s Port of Mobile is a major export port for poultry and the top port for poultry shipments bound for Russia. Poultry is the leading agricultural export for the state. The Port also exports shipments of Alabama-produced cotton, soybeans and peanuts. Cold storage provider Seaonus operates a 2 million cubic foot on-dock facility at the Port to handle perishable imports/exports.

Port of New Orleans (LA)

Agricultural exports for the Port of New Orleans are posting a strong rebound this year following a drop in oilseed and grain exports in 2013. As a whole, the New Orleans Port Region and the Mississippi River supplies global markets with 2 billion bushels (on average) of corn, wheat, oilseeds and grain products annually.

Nearly all the Port region’s agricultural exports are shipped via bulk vessels.

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P ort of New York/ New Jersey (NY) The Port of NY/NJ is a leading import hub for containerized shipments of Brazilian coffee and tea along with fish, fruit, and coffee/ tea from Vietnam. Nigeria is a top destination for food preparations exported from the Port.

Bulk exports of animal feed are a growing commodity for the Port of NY/NJ. Three on-dock intermodal terminals expedite ocean shipments to rail carriers CSX, Norfolk Southern and Canadian Pacific.

Port of Norfolk (VA)

In 2013, beverage imports and exports of food waste/animal feed and cereals were among the top commodity shipments handled at the Port of Norfolk (which includes Newport News, Portsmouth, Chesapeake and Richmond). The Port shipped 81 percent of U.S. waterborne tobacco exports and 25 percent of wine exports in 2011. It also boasts the largest intermodal facility on the U.S. East Coast.

Port of Oakland (CA)

The Port of Oakland handled roughly half a million TEUs of agriculture related shipments in 2011 and it ships over 60 percent of the U.S.’ nut and tomato exports. Nuts, meat and wine are the major export commodities by volume and leading markets include Japan, Korea and China. Wine is also a top import commodity at the Port of Oakland as are sugar and coffee.

Port officials forecast continued growth in perishables trade, particularly fresh fruit from Latin America, and have identified Peru as one of the biggest prospects.

Port of San Francisco (CA)

The Port of San Francisco features five deep water berths, on-dock rail, a foreign trade zone and cold storage facilities to accommodate a variety of import/export cargo. Commercial fishing operations are supported by the largest concentration of commercial fish processors and distributors on the U.S. West Coast.

Port of Savannah (GA)

Ranked as the fourth-largest container port in the U.S., the Port of Savannah is a leading export gateway for food (including poultry), cotton and animal feed. Approximately onethird of U.S. poultry exports are shipped through the Port to markets such as Hong Kong, China and Korea. Primary shipping lines for poultry exports include Maersk, CMA CGM, and Hapag Lloyd. The Port is also a leading import hub for sugar, palm oil and beer from countries that include Panama, Malaysia and Brazil.

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Port of Philadelphia (PA)

Fresh fruits and vegetables as well as meats are among the top commodities imported/ exported through the Port of Philadelphia. Meat is the leading agricultural export commodity and top shipping lines for the Port’s agricultural exports include Sea Star Line and Naviera Interamerica. The Port is served by three Class I railroads — CSX, Norfolk Southern and Canadian Pacific — and is supported by numerous refrigeration, processing and packaging facilities.

Port of Portland (OR)

The Port of Portland is the leading U.S. port for wheat exports. Louis Dreyfus, Cargill and Columbia Grain all provide elevator storage at the Port, offering more than 7.1 million bushels of storage capacity, states the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS). In addition to wheat, grain products, wine and soybeans are among the top export commodities shipped through the Port of Portland.

Port of San Diego (CA)

Dole Fresh Fruit is a key tenant at the Port of San Diego, importing approximately 2 billion bananas annually and operating a weekly service from Latin America to San Diego to support consumers in the Western U.S. and Canada. www.foodlogistics.com

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Strategically located 75 miles inland from Oakland, this 35-foot deep-water omni-use port accommodates diverse cargoes.

Benefit from a productive labor force, 24/7 open gates, FTZ #231 and the proximity to Interstate 5 and highways 99 and 4. Served by BNSF and UP, the port offers direct cargo transfer to/from rails, vessels, trucks and barges.

Our large warehouses, distribution centers and open spaces are available for staging, development and leasing.

The port has two 140-ton mobile harbor cranes and reinforced docks to facilitate heavy-lift/project cargoes.

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Visibility In The First- And Last-Mile of Reefer Container Logistics

BY BLAIR PETERSON

I Port of Seattle (WA)

Agricultural exports are an important business segment for the Port of Seattle, valued at nearly $4.3 billion annually. The top commodities include apples, pears, sweet cherries, potatoes, onions, red raspberries, hay and hops. The Port ranks as one of the top 10 container ports in the U.S. and features bulk transload facilities adjacent to terminals and nearby cold storage facilities to support agriculture shippers.

Port of Stockton (CA)

The Port of Stockton has grown to become the second-busiest inland port on the U.S. West Coast handling approximately 3 million metric tons of cargo annually. Over 90 percent of the chemical fertilizer used by California’s Central Valley agriculture sector is imported through the Port. Bulk molasses and foodgrade edible oils are also key imports. The Port of Stockton’s Marine Highway Demonstration Project, known as M-580, was launched in June 2013 to provide a barge transportation alternative from Stockton to the Port of Oakland. M-580 helps remove truck traffic on Interstate 580 while simultaneously slashing greenhouse gas emissions. Although the Port transitioned M-580 to an “as needed” service effective Sept. 1, Port Commission Chairman Victor Mow said, “We look forward to the day we can bring the weekly service back to benefit our communities.”

Port of Tacoma (WA)

According to the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS), the Port of Tacoma moved almost 3.8 million metric tons of agricultural exports in 2011, nearly three-fourths of which were moved in bulk. Grain products accounted for over half of the Port’s agricultural exports, while Blue Water Shipping Co. and Evergreen together shipped 62 percent of the Port’s agricultural exports.

Meanwhile, Tacoma’s top agricultural imports include grocery items, frozen fish, vegetables, canned fruit and beverages.

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Chile’s CSAV is one of the oldest shipping companies in the world and one of the largest in Latin America. The Port of Los Angeles is one of its key ports of call. A proposed merger between CSAV and Hapag-Lloyd is currently underway.

Port of Vancouver (WA)

Washington State’s Port of Vancouver is a key bulk grain (mostly wheat) exporter with most shipments destined for the Philippines, Indonesia and Korea. Grain products, including cereal and flour, as well as soybeans, are also key export commodities. In August, the Port of Vancouver signed a memorandum of understanding with North Dakota’s Department of Agriculture to provide dedicated rail service for westbound agricultural shipments from North Dakota, utilizing otherwise empty railcars returning from eastbound shipments. Bulk agricultural products are one of the Port’s key business segments and grain the top export commodity by weight.

Port of Wilmington (DE)

Delaware’s Port of Wilmington is a key participant in the global food supply chain. The 360 Quality certified Port features one of the largest dock-side cold storage facilities in the U.S., comprised of six separate warehouses aggregating approximately 800,000 square feet of refrigerated storage space. The value added services of cold treatment, fumigation, controlled-atmosphere and rapid cooling are all available to customers. Delaware’s Port is the top U.S. gateway for imports of fresh fruit, bananas, and juice concentrate.

Both Dole Food Co. and Chiquita Brands International recently signed agreements to continue to use Wilmington as their mid-Atlantic distribution hub. Dole and Chiquita are the Port’s largest customers, importing bananas, pineapples and other fruit and exporting forest products and general cargo. Consequently, the Port will continue to handle more bananas than any other in North America and retain its claim as the “Top Banana”. ◆

• FOOD LOGISTICS

n today’s global markets with increasing competition and changing consumer demands, shippers need information – and information is power. Due to growing complexities in the global food supply chain with long transit times and harsh shipping environments, the need for complete visibility within has reached a new high. Shipping high value, perishable commodities requires specialized innovative solutions to ensure containers arrive at the right location at the right time.

Current market hurdles exist on container equipment availability, chassis availability (to move containers from port to inland locations) and driver shortages. Collaboration, communication and visibility of assets are required to overcome these challenges. Using dispatch and chassis management solutions, ocean carriers can provide their customers with information on container location, estimated arrival times, chassis availability, container conditions and more.

Temperature-sensitive cargo must be shipped in accordance with strict specifications, and ocean carriers must ensure the cargo gets the best possible care using state-ofthe-art equipment and monitoring systems. Some containers are equipped with GPS devices, giving remote operators direct access to the state of the container – the temperature, power on/off, etc. Alarms can be set to alert operators when temperatures fall outside of an acceptable level.

Because global food supplies must ship long distances, the ability to ship containers as fast and accurately as possible is key. Using dispatch management solutions, ocean carriers gain visibility into container movements with first and last mile visibility. Carriers can track appointments, deliveries and completion dates/times in order to monitor and track performance and ensure shipments are handled properly. Invoice charges can be monitored to better control costs. Connecting to a network of intermodal carriers means shippers have access to a wide variety of shipping opportunities; ensuring containers won’t be sitting on docks waiting for a transport slot on a carrier.

Once containers enter port, they must be put on chassis and picked up by motor carriers to deliver to their final destination. The containers can’t wait, even if they are refrigerated, as many foods have spoilage dates. However, there is a huge shortage of chassis in the market. Using a chassis management system to locate and rent chassis ensures waiting time is eliminated and chassis are in acceptable conditions for transporting goods.

Moving perishable shipments requires extra care and monitoring during transport, real-time visibility into movements, and ability to move shipments quickly and on-time to their destination to eliminate spoilage. Customers will be more satisfied knowing their food products have been handled with care, in the most cost-effective manner possible. ◆

Blair Peterson is vice president of International Asset Systems (IAS), which provides intermodal transportation solutions for dispatch, repair, business intelligence and chassis management to the world’s largest intermodal information network. www.foodlogistics.com

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3 P L / R e f r i g e r a t e d

L o g i s t i c s

TEMPERATURE CONTROL TECHNOLOGY

Boosts Cold Transport Capabilities Options Expand For Fresh, Refrigerated And Frozen Transport And Security

BY ELLIOT MARAS

C

old chain transportation managers have more tools to manage temperature and security issues than ever nowadays, thanks to continuously improving technology. It couldn’t be happening at a better time in light of a heightened public concern about food safety and pending food transportation regulations. Transporters of fresh, refrigerated and frozen food have a plethora of hardware, software and services available to manage and monitor shipments across any distance.

As with all types of technology, the challenge facing transportation decision makers is to understand which solution best meets their needs.

While cold transporters await the Food and Drug Administration (FDA) final sanitary transport rules under the Food Safety Modernization Act (FSMA), shippers are already finding it difficult to meet existing requirements at a time when carrier capacity has hit an all-time

RLS Logistics finds demand increasing for its reefer trailers.

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• FOOD LOGISTICS

www.foodlogistics.com

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Sunteck Inc., a full-service, multi-mode transportation solutions provider based in Boca Raton, Fla., manages frozen transport for a sandwich manufacturer with operations in California and Illinois. Shana Monroe, the account representative, says chilled and frozen LTL operations are becoming more difficult due largely to capacity shortages. The problem is especially difficult in California, due in part to the new CARB compliance regulations requiring diesel trucks to meet federally-imposed clean air standards. Diesel truck engines are required to be 2010 model year or newer engines, she says. In addition, the new hours-of-service safety regulations to reduce truck driver fatigue limit the average work week for truck drivers, which has impacted capacity in a big way.

“Consignees no longer recognize LTL versus truckload and make our trucks wait for hours to unload one or two pallets,” Monroe says.

“They use to have express doors to accommodate the LTL trucks. Consignees are also charging fees and steep fines that they never used to charge, such as Safeway, that will charge $500 for a reschedule fee even though we’ve called ahead and reported we were held up at a previous warehouse, gave notice and needed to re-schedule.”

Moving chilled and frozen LTL can be especially challenging since product has short code dates and customers order “just-in-time” deliveries. “When shipments aren’t delivered on time, the fallout can be, at the very least, difficult for the customer. The customer may get a reduction in freight invoice or the following week’s orders cancelled,” Monroe says. “We are also held to a 97 percent on-time delivery ratio from Walmart, and this does include delivering early as well. As you can see, when you pull all this together, it can create an environment that makes it almost impossible to run chilled and frozen LTL, make a profit and stay in business.”

Fewer carriers are staying in the chilled and frozen LTL arena, which is creating capacity issues, Monroe adds. “When you load a trailer out with multiple customer orders, a pallet or two for each customer, it creates multiple picks and stops. Then you have warehouses holding you up and putting you behind schedule. It is challenging to get all the shipments off loaded on time and maintain over a 97 to 98 percent www.foodlogistics.com

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“Our ability to hire the outside guys (drivers) to do the job we need to do gets tougher and tougher,” Overstreet says.

Temperature monitoring improves George’s reefers are equipped with Sensitech’s TempTale electronic sensors that allow George’s to monitor the temperature in real time and create a temperature log for each shipment, Overstreet says. A monitor light visible to the driver from the side view mirror indicates whether or not the cargo temperature falls within the right range. George’s has the TempTale

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As a result of all the recent changes, Sunteck recently purchased MercuryGate International Inc. TMS software to better manage LTL operations.

George’s, a chicken processor based in Springdale, Ark., has found operating its own reefer fleet to be most economical method of transport, according to Jeff Overstreet, director of transportation. But since the company’s fleet is limited in size, they must outsource fresh and frozen shipments to western states. So far, the company has been satisfied working with 3PLs.

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low. Hence, shippers face growing customer concerns about safety, temperature and quality at a time when carrier demand exceeds supply.

While temperature-controlled warehouse space has increased over the years, it has not kept pace with demand, making it difficult for carriers to meet schedules. As the U.S. economy recovers from the recession, food shippers find themselves competing with other industries for transportation services.

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• SEPTEMBER 2014

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sensors on its trucks and provides the sensors to its carriers.

George’s has investigated using satellite monitoring to monitor vehicle diagnostics, Overstreet says, but has not considered this necessary.

As customers like George’s find 3PLs helpful in managing reefers, some LTL providers think food manufacturers and wholesalers need to learn more about the technology.

Customer education needed John Gaudet, vice president of business development at Newfield, N.J.-based RLS Logistics, which provides temperaturecontrolled LTL and TL services, says some customers make the mistake of loading or unloading a reefer from the street where product is exposed to warm air.

Other customers require the driver to keep the reefer unit running while the trailer doors are open. In such a case, warm moist air gets into the condenser, causing ice buildup and excessive defrost. This is especially the case in the metro areas of the The Save-A-Load, Northeast where streets Inc. 8.8-pound bar works in -60 and buildings cannot degrees Fahrenheit accommodate today’s to 250 degrees 53-foot reefers.

Fahrenheit.

In still other cases, shippers place a temperature recorder on top of a pallet in an area where there is ambient air rather than within the cargo or inside the corrugated compartment. “It (the recorder) doesn’t gauge what the temperature of the product is; it’s only giving the air temperature,” Gaudet says. The customer/receiver will then refuse the order, which can result in a

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• FOOD LOGISTICS

substantial financial loss. The cargo insurance only covers loss in the event of a reefer breakdown. “At the end of the delivery cycle, no matter where that error is, it’s always going to fall on our plate,” he says. “The cost implications are great.”

“It’ll drive transportation rates up in the LTL world,” Gaudet says. “Educating our customers about how reefer trailers work and how to properly handle freight claims is a priority right now.” His biggest concern is that these oversights will increase as the FSMA gets closer and customers become more sensitive to temperature issues, resulting in increased costs and

Sensitech’s TempTale RF products integrate the data collection and communication technologies necessary to automate the process of collecting and managing comprehensive time, temperature and location information in a reliable and cost-effective manner.

ultimately higher freight rates.

How and when to take a shipment’s temperature remains an issue that lacks uniformity, agrees Dan Quinn, vice president of warehousing at Milwaukee, Wis.-based Midwest Refrigerated Services. If a thermometer is placed in an area that does not accurately reflect the cargo’s temperature, it can easily exceed the required temperature, causing the customer to reject the shipment. Quinn thinks that customers should go the extra step of “pulping” the product in cases where temperature on the outside of a package creates a concern.

Temperature concerns apply to rail cars as well, notes Mark Casiano, vice president of sales at Railex. The company’s practice is to “pulp,” take the product temperature, at both the start and end of its journey.

Casiano says rail car temperatures are monitored throughout the entire rail trip and that refrigerated units can be adjusted via satellite while in transit.

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efrigerated and frozen product runs the risk of being damaged in transport if the cartons are not kept in place. A tool for ensuring this does not happen is a hydraulic load bar that will not freeze in transit called Save-A-Load®.

The 8.8-pound bar works in -60 degrees Fahrenheit to 250 degrees Fahrenheit, notes Cathy Littlejohn, vice president of Save-A-Load, Inc. The bars use FDA-approved hydraulic fluid by the name of SeaSafe. The bars can adjust from 84 inches to 110 inches and can be used horizontally and vertically.

The heavy-duty coil spring and pressure limiting valve provides holding power inside of the trailer without damaging the trailer walls in all road conditions and even if the trailer rolls over. The button release makes it safer to operate.

Preventing damaged product is a priority for all transport companies. Littlejohn notes that companies use up to 40 bars in a trailer. The trailer is set up like a “rolling” warehouse. The driver can unload product and easily move the load bars to secure the load, Littlejohn notes. www.foodlogistics.com

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• SEPTEMBER 2014

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Technology continues to evolve “With the new FSMA requirements, particularly safe transport, record keeping will be more critical. FDA wants to see all your records – not just the data points that got through,” says Elizabeth Darragh, senior director of global marketing communications at Sensitech. “A complete breadcrumb trail will be an important tool when an inspector comes knocking.”

Darragh says while the technology for realtime monitoring has been available for years, it has recently become affordable enough to make sense for food shipments. Sensitech’s view is that customers will utilize a variety of data collection devices — including radio frequency and real-time — depending on the detail and timing required for information.

“In the real-time scenario, Sensitech’s TempTale GEO units collect data and transmit in a prescribed interval (e.g., every 10 minutes).

If we are in a zone with spotty cell coverage (which we all experience with our own cell phones), the device stores the information and downloads everything when it returns into range,” she notes. Readings are not lost due to the inability to transmit, she adds.

With radio frequency, there are a number of scenarios for downloading data – via infrastructure or handheld devices in either short or longer read ranges, Darragh says. In any case, the receiver still has to find the box with the device in it or on it to read with a handheld.

“Our Sensitech’s TempTale RF products preinstalled infrastructure means no human intervention is required – the infrastructure beacons for signals within its range, which our device responds to and downloads all of the data it’s collected,” she says.

Witte Bros. Exchange, Inc., an asset-based 3PL based in Troy, Mo., uses a satellite-based, telematics system on its fleets to monitor refrigeration in real time, notes Charla WhalenMueller, director of marketing and recruitment.

Operated by Rochelle, N.J-based Orbcomm, the web-based system provides visibility, monitoring and two-way control of refrigerated fleets. The service integrates with transportation companies’ dispatch, order generation or planning systems.

This technology will be important to shippers as the FSMA comes into effect, WhalenMueller says.

In the meantime, radio frequency identification (RFID) continues to evolve as a tracing tool. While RFID began as an inventory control technology, the electronic tag’s ability to gather more information than other tools has given it a role as way to control foodborne illness. RFID tracking can be managed by existing software systems, according to Chris Schaefer, director of market development for data capture solutions at Motorola, which provides RFID products.

After having to recall all its packaged spinach following an E. coli outbreak in 2006 that

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• FOOD LOGISTICS

RFID Tags Provide Real-Time Checking For Chicken Deboning And Distribution

O

zark Mountain Poultry, based in Rogers, Ark., produces 1.5 million pounds of hand-deboned poultry per week in more than 25,000 square feet of production space, supported by another 50,000 square feet of quality control, coolers and docks. The company has developed an RFID tracking system that has improved its productivity and efficiency. While the company first introduced the RFID tracking system 10 years ago, new features have been added, notes Scott Southerly, plant manager.

Ozark Mountain Poultry has found that RFID technology allows the company to capture realtime information at different points of the production and delivery process. In addition to improving efficiencies, the RFID technology provides a higher level of transparency for its manufacturing and distribution. This proves beneficial in tracing quality issues if and when they occur.

The company is among those that have discovered the RFID tag’s unique capability to record what happened when in a production and distribution process.

RFID read/write devices enter information at critical points in the process determined by the company’s staff IT programmer.

In a chicken processing plant, the deboning process is one of the most labor intensive functions. Deboners remove bones from raw chickens, then place them in tubs on a converyor line to a packing area. Prior to introducing RFID, workers at Ozark Mountain Poultry weighed chickens, wrote the weight on a container with a grease pen, then sent them on to deboning stations. Once the deboner cleaned the chicken, new weights were marked using grease pens. The deboner placed the chicken on a conveyor belt and sent it to a quality control station where the chicken was weighed again. At the quality control station, another worker compared the deboned weight to the raw weight.

Under the old system, if a quality issue occurred, it was time consuming to determine where a problem occurred in the production process. The information on the containers was manually recorded and entered into the system.

With the RFID tags automatically keeping track of products, there is no need to mark the containers or manually enter the information into the system.

The raw chicken weights are entered into the

software system automatically. Raw chickens are placed on a conveyor line after they are weighed and sent to a deboner station. The deboner removes the bones and cleans the chicken and places it into a tub that has an RFID tag attached to it. An RFID read/write device at the work station enters a code noting the particular deboning work station and the time the tub leaves that station.

The deboning process typically takes about 15 minutes, according to Southerly.

The tub then goes to a weight scale at the end of the deboning line where it gets weighed again.

A quality assurance (QA) tech physically examines the chicken before weighing it a second time.

Another RFID reader records the new weight, at which point the tub gets sent to a packout station.

If there is a problem with the chicken, the QA tech sends it back to the person who deboned it. Should there be a problem after the chicken

Ozark Mountain Poultry developed RFID technology to capture real-time information at different points of the production and delivery process.

leaves the QA station, the system has a record of who had the chicken and when.

There is one QA tech for each of the six deboning lines. There are 24 workers for each of the six deboning lines.

In addition to improving efficiency, the system allows the company to pay workers based on productivity. Workers are paid based on how many pounds of chicken they debone.

In 2009, the company installed video screens in the deboning stations to allow deboners to see who the top producer is at any given time. The list has motivated employees to work faster and better, Southerly notes. “It has helped us with quality,” he says. “There’s more accountability and better understanding of what’s happening.”

“It’s continually evolving to give more information,” says Southerly. www.foodlogistics.com

9/15/14 12:48 PM

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FOOD LOGISTICS • SEPTEMBER 2014 33 A FAMILY TRADITION OF GROWTH, SERVICE AND INNOVATION

9/15/14 12:48 PM

A George’s employee takes the temperature of a refrigerated chicken package in transit.

sickened 200 people, Dole Foods started RFIDtracking vegetables from harvest, through processing and packaging, and on to stores.

A Canadian meat processor, Levinoff-Colbex SEC in St. Syrille de Wendover, has deployed RFID to provide end-to-end visibility across its logistics chain. An RFID tag is associated with every animal and meat product as it moves through the company’s processing plant. If a veterinarian identifies a problem with any animal part, every other product from that same animal can be immediately located on the production line and traced back to the source animal.

The system has allowed the processor to achieve certification in the international market, according to a case study by Motorola Solutions,

which provides the RFID readers, tag antennas and monitoring service.

Logistics industry observers have noted that RFID remains a very costly solution. In addition to the RFID deployment cost, observers say that less expensive bar code readers have proven effective monitoring the necessary data for data and temperature monitoring.

Nevertheless, large companies including Walmart and government institutions are issuing RFID compliance mandates to product manufacturers, according to a recent RFID report from the University of Florida.

The July Food Logistics reported Hy-Vee, the West Des Moines, Iowa-based supermarket, now requires suppliers to include RFID tags with orders. Hy-Vee implemented what it characterizes as a complete cold chain management system to monitor temperature of perishable foods from the vendor to a distribution center to the store.

OUR SERVICES ENCOMPASS: COLD STORAGE WAREHOUSING: • 4 strategic locations in the Northeast

As temperature control, security and inventory management technologies evolve, food companies will be in a better position to meet customer and government concerns about safety.

George’s, the Sprindale, Ark.-based chicken processor, is grateful for the fact that the food transport industry has strong organizations such as the American Trucking Association and National Private Trucks. “The industry is very strong,” George’s Jeff Overstreet says. “We’ll keep getting food to the American consumer.” ◆

For more information: MERCURYGATE INTERNATIONAL, 919-469-8057, mercurygate.com MIDWEST REFRIGERATED SERVICES, 414-410-8200, midwestrefrigerated.com MOTOROLA SOLUTIONS, 847-576-5000, motorolasolutions.com ORBCOMM, 703-433-6300, orbcomm.com RAILEX, 888-472-4539, railex.com RLS LOGISTICS, 856-694-2828, rlslogistics.com SAVE A LOAD, 800-728-5623, saveaload.com SENSITECH INC., 978-720-2648, sensitech.com SUNTECK TRANSPORT GROUP, 561-988-9456, suntecktransportgroup.com WITTE BROS. EXCHANGE, 800-325-8151, wittebros.com

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info@rlslogistics.com | www.rlslogistics.com 34

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www.foodlogistics.com

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SECTOR REPORTS

ROBOTICS

How Robots Are Changing The Food Industry And Improving Fulfillment Robots have moved upstream and can be used for filling, capping, sterilizing, high-speed picking and sorting, packaging and other activities. By Chris Castaldi

P

er the Center for Disease Control and Prevention, foodborne illnesses are on the rise.

Every year, about 48 million people in the U.S., roughly one in six people, gets sick from eating contaminated food. The Food Safety Modernization Act (FSMA) gives the Food and Drug Administration power to regulate how food is grown, harvested and processed, and has provided a huge opportunity for the overhaul of all food production in the U.S. According to Plunkett Research, U.S. consumers spend approximately $1.8 trillion annually on food. Consumer demand for faster deliveries of a wider variety of food and beverage products is driving distribution and supply chain managers to embrace automation and robotic technologies at an unprecedented rate across the board, from e-commerce to food distribution.

With SKU proliferation, labor costs, space utilization, and health and safety issues challenging the food and beverage industry profit margins, the goal of management is to use the least amount of labor to get the best rate in a small space and spend the least amount of money. The growing home delivery business adds to the challenge, along with stores requiring more frequent, smaller, store-friendly deliveries. Plus, retailers must keep their shelves stocked with more products in order to eliminate stock-outs.

Since manual applications of food handling have a higher rate of error and

The Yaskawa Motoman MH12 Robot curved upper arm enhances its reach and allows a wider range of applications. Photo courtesy of Motoman.

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chance of contamination, material handling robots are being brought in so that production lines can hold up to the new standards, regulations, lifestyles and flexible packaging needs. Distribution and supply chain managers can expect lower costs, greater throughput of product, and higher revenues through advanced automated supply chain solutions and robotics.

Robots provide additional advantages in food production, such as: • Improving food quality – Robots work in harsh environments, so where food must be handled at freezing temperatures, robots can sufficiently handle this process. Robots are also built to operate in various harsh environments, such as extreme cold. A harsh environment for a human, or even absence of oxygen, is no problem for robots.

• Improving product consistency – Using robots in food production reduces waste and increases overall yield because actions like cutting are more consistent. It is estimated that robots can help manufacturers enjoy roughly a 3 percent yield improvement in situations where precise cuts make the difference between contaminated meat and sellable product.

• Adding functionality – Robots can make adjustments beyond the skill of an operator. Not only do robots promote a more sterilized environment, they also take more precise counts during production, which leads to the ability to track a package that might be tainted back to its origins.

• Improving worker safety – Robots can utilize sharp, dangerous equipwww.foodlogistics.com

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Pallet Flow

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Cantilever

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ment that eliminates the need for workers to be involved, making for a safer work environment.

• Improving food safety – Contamination can be transferred from workers.

Using robots in food production eliminates the opportunity for contaminants to be transferred to food products.

• Improving productivity – When labor is in short supply, robots can be brought in to perform repetitive, physically intensive work that takes place in an unpleasant environment where it will be hard for workers to perform. Robots work expertly in repetitive environments where workers often get bored or tired.

• More convenience - In addition to the new law, consumers are looking for smaller, more convenient packaging to meet their changing lifestyles; and producers themselves are looking for more flexible methods of packing mixed or multiple orders on the same line.

Robots began downstream Initially, robots were used within food production in downstream processes, such as fulfillment operations and packaging.

Using robots in these operations helps increase performance, reduce order cycle times, and maximize order fulfillment efficiency. In picking operations, robots utilize gripping technology to pick items from bins or cartons. Robots can be used in emptying and filling totes as well.

The emphasis on smaller, store-friendly deliveries from distribution centers to the store means that each pallet must include a variety of product so clerks can not only replenish directly to the shelf, but also in alignment with the store layout. That makes their jobs easier, but it can make building a pallet harder. Robots can help build pallets, even if they are made up of a mixture of SKUs. Robots can fill pallets, which can be configured to handle cases, rows, layers or custom patterns. Using palletizing robots increases throughput and efficiency. Mixed pallets and retail-ready pallets can be configured to save costs while increasing time to market.

Robotic gantry systems are engineered to meet the food and beverage industries’ need for high SKU mixed product distribution while eliminating 100 percent of the labor involved with building a mixed SKU pallet. Today’s gantry systems can be half a football field long and accelerate to tremendous speeds. In one example, a multi-gantry system can pick 300 concurrent SKUs at more than 250,000 cases per day.

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• FOOD LOGISTICS

Robots at work within ITW Warehouse Automation’s Vertique case picking system.

Another solution combines robotics and materials handling equipment to build mixed pallets a layer at a time. One layer picker uses a low-vacuum chamber principle to gently lift the layer. This type of picker can effectively lift 98 percent of the products in the retail sector, including diverse products with varying surfaces like loose produce, six packs of bottled beverages or smooth cartons.

Unloading pallets is a backbreaking process that can be automated via robots.

Robotic depalletizing systems can handle a broad range of product types, including cases, bags, bundles, trays, totes, pails, pallets and sheets. Many can be customized to meet specific project requirements.

Robotic depalletizing systems feature a multi-axis articulated arm robot, which provides the ultimate in flexibility and reliable operation. With fast, pre-programmed changeovers and customizable end-of-arm tooling, these systems can easily depalletize a variety of different products.

Depalletizers decrease operational costs and eliminate difficult manual tasks that can lead to employee injuries.

Robots move upstream Food producers must ensure the quality and safety of their products. Leveraging cutting-edge robotics helps producers remain profitable, competitive and flexible.

Originally, robots were used in downstream production processes, but today, robots have moved upstream and can be used for filling, capping, sterilizing, high-speed picking and sorting, packaging and other activities.

Robots help load and unload packages, cartons and pallets very quickly and cost effi-

ciently. Palletizing robots package food and beverage products for transfer and shipment.

These robots provide smooth movements at varying speeds and are capable of handling different pallet sizes, types and weights.

Robots can form food, grind, and cut food products. Many incorporate sensors to check for thickness, color and any inconsistencies in food products. Robots are useful for upstream supply chain operations because they can work in critical environments not fit for humans, and work well in repetitive environments. Ease of cleaning ensures hygienic requirements are met.

The quantity of food and beverage products moved daily through DCs is staggering, but with the help of robots, food producers and distributors can meet these demands, while lowering costs and improving efficiencies. ◆ Chris Castaldi is director of business development for W&H Systems, a material handling systems integrator for the food and beverage, wine and spirits, and retail industries.

For more information: CENTER FOR DISEASE CONTROL AND PREVENTION, 404-639-3311, cdc.gov FOOD AND DRUG ADMINISTRATION, 888-463-6332, fda.gov PLUNKETT RESEARCH, 713-932-0000, plunkettresearch.com W&H SYSTEMS, 201-635-3493, whsystems.com www.foodlogistics.com

9/15/14 1:39 PM

2014 Educational Webinar SERIES Food Logistics’ Educational Webinar series in 2014, entitled “The Cold Chain: Uncovered,” delves into various aspects of the global cold chain, from the latest advancements in reefer equipment and cold storage facilities, to new transportation services and how shippers and logistics providers are main-taining a safe food supply chain from farm to fork.

A different cold chain topic will be explored once per quarter.

NEW

Global Supply Chain Solutions for the Food and Beverage Industry

NOVEMBER 5: Boosting Warehouse Efficiency in the Food/Bev Sector.

From floor to ceiling, there are multiple opportunities to boost efficiency in the warehouse. For some companies, simple and relatively low-cost upgrades involve racking and lighting, while large-scale warehouse automation projects are the solution for others. Food Logistics sits down with supply chain executives to find out the latest trends in warehouse efficiency. http://bit.ly/warehouseauto

■ DECEMBER 10: The Relationship between Cold Chain Integrity and Food Safety.

Today’s cold chain provides a foundation for growing trade volumes of agricultural Sponsored by and processed food shipments, opening new markets for imports and exports and giving consumers access to more fresh food throughout the year. Maintaining food safety is paramount, especially in developing countries with limited cold chain infrastructure. This final Webinar in our series takes a comprehensive look at how various players in the cold chain are maintaining food safety throughout an increasingly global food supply chain.

http://bit.ly/ColdChainIntegrity

Visit our archived webinars: The Reefer Box: From ‘Plain Old Cold’ to ‘Smart and Controlled.’ http://bit.ly/1veblt6

Cold Storage Facilities: Safer, More Sustainable, and More Efficient. http://bit.ly/1lwKfwn

Fuel Management Strategies for the Global Food Supply Chain. http://bit.ly/transpmgt

Perishables on the Move: Road, Rail, Ocean, and Air. http://bit.ly/1qn1CTG

If your company wants to be included as one of the panelists/sponsors for any of these seminars, please contact Judy Welp at (480) 821-1093, jwelp@foodlogistics.com.

Thanks you to all our sponsors and panelists.

(Dates are subject to change)

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For more information on specific times and how to register, visit us at: www.foodlogistics.com.

9/15/14 1:39 PM

SECTOR REPORTS

TRA NS P ORTATION

EnerSys Zero Battery Change Solution For Lift Trucks Cuts Costs, Boosts Productivity

Electric Forklifts Gain Acceptance, Driven By E Sustainability Features Electric forklifts cut emissions, use less energy, and minimize waste and maintenance. BY BRIAN FAUST

M

arket acceptance of electric forklifts has steadily increased in the last six years, according to the Electric Power Research Institute (EPRI), with electric forklifts representing 64 percent of the U.S. market. In addition to offering cost and performance benefits, electric forklifts also enable companies a way to enhance their environmental profile. Here are The EnerSys® Zero Battery some of the ways electric forklifts help Change Solufacilities go “green.” tion includes Greatly reduce emissions: For Express® eMAX every 10,000 hours of use, internal HF® fast charcombustion (IC) engine-powered gers to allow forklifts emit 120,000 more pounds operators to charge their trucks during regularly scheduled breaks, of carbon emissions than electricpowered forklifts, according to EPRI. eliminating the need to change batIn fact, according to the U.S. Depart- teries while maintaining optimum lift truck performance. ment of Energy (DOE) GREET Life Cycle calculator, electric forklifts produce the lowest well-to-wheel greenhouse gases of any forklift.

Reduce energy usage: With almost no emissions, there is no need to ventilate exhaust, reducing energy usage. Electric forklifts also generate very little heat compared to IC forklifts. This reduces the strain on warehouse temperature-control units and the cost for cooling and air conditioning.

Cut fuel usage and costs: Electric-powered forklifts do not require any fuel, an immediate and ongoing savings. For every gallon of liquid propane used, only 6 kW hours of electricity are used. An electric forklift can achieve savings of up to $9,000 per truck per year compared to IC forklifts (based on 2,000 hours of operation per year).

Legacy batteries and chargers are designed to meet the high power demands of today’s industrial equipment, including forklifts, walkies, and AGVs.

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• FOOD LOGISTICS

nerSys®, a provider of stored energy solutions for industrial applications, offers the Zero Battery Change Solution, a customized power management program for lift truck fleets that provides an alternative to liquid propane, hydrogen fuel cells and conventional, lead acid battery-charging systems. The ZBC Solution allows lift trucks to operate all day without changing batteries and without the need for a battery room.

“With the ZBC Solution, drivers simply pull up and plug in,” says Steve Spaar, marketing director Americas for EnerSys. “Our technology allows operators to charge their trucks during regularly scheduled breaks, eliminating the need to change batteries — even in multi-shift operations — while keeping every lift truck performing at its peak throughout the day.”

EnerSys offers everything needed to eliminate battery changes — starting with a full evaluation of the operation to installation, report programs, preventative maintenance and repair services — all under one limited warranty. EnerSys offers a wide range of battery, charger and accessory products to meet the specific performance, space and budget requirements of each fleet and operation.

The ZBC Solution includes ZBC Designer™ software, an interactive modeling software that identifies the most efficient and cost-effective energy configuration for companies running forklift fleets.

The software completes operational and financial analysis within 30 minutes to provide a savings framework.

“Our ZBC(SM) Solution has the largest customer base of any similar battery-charging program in the world,” says Spaar. “It is custom-engineered, fully integrated and professionally managed to deliver customers unmatched savings and added productivity.”

The ZBC Solution offers lift truck fleets the following benefits compared to other power management programs: Increased productivity: The ZBC Solution provides all the benefits of eliminated battery changes without the excessive cost and risk of other technologies. Unlike fuel cells, which require periodic hydrogen refills, the ZBC Solution has zero productivity loss, making it highly costeffective for both large and small fleets.

Reduced asset requirements: The ZBC Solution maintains batteries at an optimum rate of charge 24 hours a day. This increases the longevity of the batteries and reduces the need for extra trucks, batteries and change equipment. The ZBC Solution can reduce battery inventory by up to 50 percent, eliminating the need for battery rooms and freeing valuable floor space.

Reduced direct operating costs: The ZBC Solution reduces maintenance by up to 50 percent by eliminating the labor associated with battery changes.

Improved worker safety: No battery changes means reduced crossfacility traffic and less chance for workplace injuries.

Cleaner, quieter environment: The ZBC Solution makes it easy to transition to an electric lift truck fleet, improving air quality in the workplace and reducing noise from propane-powered trucks. Also, electric lift trucks are “greener” than other alternative choices including hydrogen fuel cells, according to EnerSys®. Visit https://greet.es.anl.gov/fleet_footprint_calculator (US DOE) for more details.

For more information on EnerSys® and its full line of products, systems and support, visit www.enersys.com. www.foodlogistics.com

9/15/14 10:43 AM

Expect More From Your Reach Truck.

Only from Jungheinrich® Introducing the new ETR series of pantograph reach trucks – the latest innovation from Jungheinrich.

• Fastest lift speeds in the industry • Smooth, quiet ride • Intuitive controls • ProTrac® drive axle for greater stability • Robust mast with lift heights up to 450 inches • 400+ dealer locations in North America

Take a test drive: Put our German engineering to the test — and see firsthand how you can achieve more. www.jungheinrich-lift.com 1-877-543-6757

© 2014 Jungheinrich. All rights reserved. All registered trademarks are the property of their respective owners including Jungheinrich® and its logos. Some products may be shown with optional equipment.

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Gasoline vs. eGallon Prices 2001 - Present

For more information:

5.00

GAS PRICE

PRICE (USD)

4.00

3.00

DOUGLAS BATTERY, 800-368-4527, douglasbattery.com ELECTRIC POWER RESEARCH INSTITUTE, 650-855-2000, epri.com ENERSYS, 610-236-4040, enersys.com U.S. DEPARTMENT OF ENERGY, 202-586-5000, energy.gov

2.00

EGALLON PRICE 1.00

Minimize waste: With electric forklifts, there are no engine, transmission or coolant fluid changes and no need to dispose of used fluids, oil and filters. Furthermore, batteries may be recycled. More than 98 percent of all battery lead is recycled.

Reduce noise pollution: An electric forklift does not produce engine noise, allowing the operator to hear better for enhanced operation and safety.

Increase floor space: With an electric

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forklift, there is no need for gasoline or propane storage outdoors. Electric charging stations do not present the same hazards that come with storing liquid fuels on-site.

Today’s new battery charging technologies (i.e., opportunity or fast charging) eliminate battery changing stations and reduce battery inventory, further freeing valuable floor space.

Reduce maintenance: Maintenance is the key to efficient forklift operation. Unlike IC forklifts, electric forklifts don’t have engines,

transmissions or cooling systems. With fewer moving parts, maintenance is significantly reduced. An IC truck costs, on average, 30 to 40 percent more to maintain over its life than electric trucks due to more frequently scheduled maintenance.

Electric forklifts continue to gain in acceptance as they help companies enhance their “green” profiles through reduced emissions, energy, fuel usage, waste, noise level, maintenance and floor space. For more information on converting from an IC fleet to an electric fleet, including an online “IC2E” calculator, visit www.douglasbattery.com/ calculator.aspx. ◆ Brian Faust is the general manager of Douglas Battery, a brand of EnerSys, a provider of stored energy solutions for industrial applications.

EPRI, Utilities, Auto Manufacturers To Create Open Grid Integration Platform For Plug-in Electric Vehicles

T

he Electric Power Research Institute (EPRI), eight automakers and 15 utilities are working to develop and demonstrate an open platform that would integrate plug-in electric vehicles (PEV) with smart grid technologies enabling utilities to support PEV charging regardless of location.

The platform will allow manufacturers to offer a customer-friendly interface through which PEV drivers can more easily participate in utility PEV programs, such as rates for off-peak or nighttime charging, according to EPRI. The portal for the system would be a utility’s communications system and an electric vehicle’s telematics system.

As the electric grid evolves with smarter functionality, electric vehicles can serve as a distributed energy resource to support grid reliability, stability and efficiency. With more than 225,000 plug-in vehicles on U.S. roads

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– and their numbers growing – they are likely to play a significant role in electricity demand side management.

The platform enables integration across multiple communication pathways, such as automated metering infrastructure, home area networks, building energy management systems and third party entities that aggregate energy management services for commercial and industrial power customers.

Researchers anticipate that grid operators in the future may call on electric vehicles to contribute to grid reliability by balancing solar and wind generation, mitigating demand charges and providing ancillary services such as frequency regulation and voltage support.

Utilities and regional transmission organizations participating and supporting in the software and hardware development and demonstration include DTE Energy Co., Duke Energy, PJM Inter-

• FOOD LOGISTICS

connection LLC, CenterPoint Energy, Inc., Southern Co., Northeast Utilities, Southern California Edison, Pacific Gas & Electric Co., San Diego Gas & Electric, Commonwealth Edison, TVA, Manitoba Hydro, Austin Energy, Con Edison and CPS Energy.

Auto manufacturers are American Honda Motor Co., BMW Group, Chrysler Group LLC, Ford Motor Co., General Motors Co., Mercedes-Benz Research & Development North America, Inc., Mitsubishi Motors Corp. and Toyota Motor Engineering & Manufacturing North America, Inc. “A key aspect of the platform’s benefits will be giving customers flexibility and choices,” says Dan Bowermaster, EPRI manager of electric transportation.

“It can help the PEV customer determine the value of using their parked vehicle as a grid resource, and help the industry develop a convenient, user-friendly

customer interface. We see this as the foundation for future developments to integrate PEVs with the grid.”

Additionally, it could increase service reliability to customers by helping to mitigate the impact of strain on the grid during peak periods and could contribute to curbing greenhouse gas emissions. Utilities might benefit by better managing their loads and avoiding upgrades to infrastructure – savings that can be passed onto utility customers.

Sumitomo Electric will develop the core platform technology on the first phase of the project.

This software platform aligns with the Vehicle Grid Integration Roadmap Initiative of the California Public Utilities Commission and the California Independent System Operator, as well as conforming with standards set by IEEE, IEC/ISO, and SAE, and Open ADR Alliance, making it globally applicable. www.foodlogistics.com

9/15/14 10:43 AM

ADD SOME DIVERSITY TO YOUR PAYLOAD THE 3000R MULTI-TEMP TRAILER ®

Visit us at IFDA Booth #611

For 100 years, Utility has delivered numerous innovations that have enabled our customers to significantly increase their productivity. In fact, the 3000R has remained the #1 selling reefer in North America for 20 consecutive years. Our standard of reliability and real world performance continues with our Multi-Temp configuration. From temperature-controlled compartments for greater thermal efficiencies to advanced loading features for improved productivity, there are almost limitless options for your specific delivery requirements. With so many choices, Utility’s 3000R continues to set the standard for refrigerated transportation. Find out more at utilitytrailer.com.

To find out more, call your local dealer or visit www.utilitytrailer.com. © 2014 Utility Trailer Manufacturing Company. All rights reserved.

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Software Corp.

SOF T/TE CH TMS

of CAMS

SECTOR REPORTS

Image co urtesy

Rising Transport Costs Raise Stakes For TMS Cloud-Based Systems And Other Technologies Create New Options B Y E L L I O T M A R A S

M

to better manage transportation costs. Industry surveys have indicated that f&b logistics decision makers view transportation management systems (TMS) as delivering some of the best returns on investment. No doubt, investment in TMS will prove worthwhile given the rising cost of transportation. For this to happen, decision makers must understand the capabilities of rapidly evolving TMS software.

While carrier costs are rising, shippers are encountering a greater need for flexibility in their TMS systems as the f&b market becomes increasingly fragmented. Retailers are adding SKUs to meet a more diverse customer base.

In addition, the growing omnichannel calls for less predictable orders and more single-item purchases. These factors increase the complexity of transportation management.

Image courtesy of CAMS Software Corp

.

anaging the transportation of goods in the food and beverage supply chain has always been a moving target, no pun intended. What’s changed in a big way recently is there is more pressure to control transportation costs as carrier costs have exploded due to a chronic driver shortage while government regulations keep adding new costs and headaches. Food Logistics’ 2014 reader survey revealed that rising fuel and transportation costs are the industry’s fourth biggest concern, following improving customer service, food safety and security, and reducing supply chain costs.

Fortunately, new technology, such as the Internet cloud and evolving software and hardware, gives supply chain managers more tools

CAMS Improves Driver Productivity With Activity-Based Compensation

C

AMS Software Corp., the Vancouver, Canada-based provider of transportation management solutions, has helped large grocery fleets improve their routing, dispatch and driver payroll operations. Their flagship suite, called Prospero, was designed from the ground up specifically to suit the needs of large grocery fleets.

“Grocery fleets have all sorts unique and surprisingly complex business needs around all areas of transportation” says Brian Taylor, company president. Routing for perishable product with different temperature and tight delivery window constraints is challenging. Large union fleets often have rigid driver bid and seniority rules that can throw a wrench into the best laid plans for driver assignments or resource optimization. “Progressive grocery operations also have continuous improvement goals surrounding the optimization of their backhaul and salvage obligations” adds Taylor.

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• FOOD LOGISTICS

Activity-based compensation, for example, is an area where tremendous driver efficiency gains can be realized over hourly pay but it can often be very difficult to implement, especially in union environments. CAMS Software helps clients overcome this roadblock by systematically analysing years of historical delivery record data, often mined from electronic on-board recorder databases.

“When establishing drive time and labor standards, it’s critical that they are understandable, defensible and manageable” Taylor says. “You need to be cognizant of how traffic conditions change in different directions at different times of day and on different days of the week.” This level of granularity is often necessary in order to establish drive time standards that reflect the real world, Taylor adds. While this may be easily understood and defensible, it can be a daunting task to initially establish, let alone maintain that level of detail going forward.

TMS automates planning and decision making (defining the most efficient routes), transportation execution (carrier rate acceptance and dispatching), transportation followup (tracing shipments, collecting documents and sending alerts for delays) and reviewing and measuring performance.

The advent of Software-as-a-Service (SaaS) and the Internet cloud have created a surge of TMS providers in recent years. TMS providers claim TMS has become more affordable for smaller f&b manufacturers and wholesalers that have historically trailed their larger competitors in using TMS. Companies that outsource transportation need automated systems that track openings on carrier routes as they become available, analyze the economics of shipments, review carrier ratings, schedule shipments and keep track of deliveries.

“It’s difficult to make educated decisions using Excel spreadsheets,” says John Riske, vice president of business development at Next Generation Logistics Inc. (NGL), a Chicago-based TMS SaaS solutions provider.

Shippers continue to seek the efficiency of combining outbound and inbound deliveries.

“Grocery chains are starting to do a better job of tying their outbound and inbound together,” notes Mike Mulqueen, senior director of product management for Atlanta, Ga.-based Manhattan Associates, which provides a TMS offering. “We believe there is an opportunity for wholesalers – especially those with fleets – to do the same. This would enable them to bring more inbound freight under management.”

Riske at NGL agrees that many f&b shippers are looking to combine outbound and inbound shipments, but he doesn’t think it will make fast strides. “You need systems in place to provide visibility for better planning.

In some cases, you don’t necessarily want to or can manage all of your inbound freight.

There is risk on the inbound side; shippers assume ownership of the load and more often than not, companies are not asking for www.foodlogistics.com

9/15/14 11:06 AM

the right information before converting to a customer pick up. They need to negotiate the correct pickup allowances and a lot of times they don’t do this and leave money on the table. Companies don’t have the systems and tools in place to manage that.”

Riske further notes that while technology is evolving, TMS modeling can only accomplish what the carrier-provided data allows the TMS to work with. Carriers are equipping their fleets with onboard telematics that log a lot data such as vehicle maintenance diagnostics, temperature monitoring, satellitegenerated location tracking and more, Riske notes, but not all carriers are doing this.

TMW Systems, the Mayfield Heights, Ohio-based TMS provider, integrates with various onboard technologies, telematics, and messaging systems to bring real-time load visibility and business intelligence to end clients, says Andy Hedrick, marketing alliance director for Appian at TMW. Specific business reporting, form processing and field workflow requirements are outlined individually with each client in delivering the appropriate solution.

Telematics-enabled vehicle data played into Papa John’s Food Service (PJ Food Service) decision to deploy Japan-based Isotrak’s TMS last year. The solution allows managers to monitor fleet operations using satellite tracking feeds and vehicle telematics data. PJ Food Service also wanted a system that would allow them to meet U.S. Department of Transportation hours of service (HOS) regulations which limit how long drivers can work.

to augment its TMS solutions and provide collaboration related to carrier communication and data mapping. Prior to the NTE deployment, GENCO was dissatisfied with efforts associated with carrier connectivity, and limitations in their ability to leverage data provided by carriers when certain fields weren’t completed. These challenges led GENCO to search for a better solution to address their needs for carrier connectivity, as well as cleansing, matching and augmenting data to assist the operations team by providing real-time information.

GENCO now has one platform for all their carriers to interact with. Since deploying NTE LLC’s system, GENCO has been able to eliminate the temporary staff and focus other staff resources on more value-added work to support their customer’s supply chains.

ODW Logistics, Inc., a 3PL based in Hamilton, Ohio serving a number of f&b product manufacturers, recently selected Shelton, Conn.-based 3Gtms, Inc., a new software player, for what it sees as a highly versatile TMS interface platform as well as a powerful TMS optimization engine.

We partner with both customers and carriers!

System interface crucial The ability to integrate with a company’s existing network has become important to transportation system managers. A versatile interface platform manages trucks, trailers, agents and drivers from the same interface and can automatically upload all documents associated with a load onto a server or a network.

The Isotrak solution noted above integrates with hardware and software partners within the customer’s supply chain. Platform integration capabilities were key to PJ Food Service selecting Isotrak because PJ Food Service did not want a host of stand-alone systems.

They sought a solution that would allow for integration into existing systems so that from the time the order was placed to the time the truck returned empty, they would have full visibility and metrics delivered on one platform. They previously had only two points of visibility – when a truck left, and when it arrived back at the distribution center.

Last year, GENCO, the Pittsburgh, Pa.based 3PL provider, selected NTE LLC, www.foodlogistics.com

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Flagship Logistics Group is a partnership-driven supply chain provider to more than 11,300 shippers throughout North America.

The partnerships we have made with quality carriers, who are all rigorously screened and under contract, have helped us provide the ultimate customer service to our shippers.

(855) 492-4211 CustomerCare@FlagshipLG.com FlagshipFoodGroup.com/Logistics

FOOD LOGISTICS

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Atlanta, Ga.-based Transcore’s CarrierPoint software allows customers to manage and measure variable costs introduced through the carrier selection process through the use of benchmark rates, ceiling rates, and other control points. These control the automated tendering algorithms used to secure capacity, and feed into the real-time monitoring module.

“When we saw the single platform architecture and how it simplifies the entire planning and execution process while improving the overall quality of load building and system maintenance, it was immediately clear that 3Gtms has developed something completely

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new for the market,” says Bill Grannis, ODW’s director of information technology.

Dave Giblin, vice president of ODW Logistics, says the optimization engine is important because it allows routes to be changed daily in response to order changes

and shifting carrier availability. A customer can put in a same-day order and the system can transfer a pallet from one scheduled route to another. Finding the right solution can save thousands of dollars. “Optimization is a mandatory piece of the discussion. It puts more freight on each truck out there. The flexibility of 3Gtms allows us to do that on the fly without causing accounting confusion or unfairly allocating costs within our account base being optimized,” Giblin says.

Mitch Weseley, president of 3Gtms, says it’s important that an algorithm consider all “constraints” such as delivery windows, driver types, equipment types, etc. when choosing a TMS solution. An algorithm that builds loads that cannot be run has no value.

Weseley further notes that temperaturecontrolled transport is more important in food than other verticals. Several observers have noted that OTR carriers are not investing in temperature-controlled equipment.

Omnichannel affects modeling Manhattan Associates’ Mulqueen echoes many TMS colleagues in citing omnichannel fulfillment as a new factor in transportation modeling for f&b players.

The growth of omnichannel is making smaller and more frequent orders more preva-

www.foodlogistics.com

9/15/14 11:06 AM

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Logility demonstrates its TMS life cycle beginning with shipment history, moving to shipment planning, then shipment execution, then freight accounting before returning to the shipment history database.

lent in f&b distribution, agrees Bill Pritz, vice president of the transportation solutions group at Logility Inc., the Atlanta, Ga.-based chain supply software provider.

TMS providers continue to offer new features.

Transcore, an Atlanta, Ga.-based TMS provider, has introduced a freight payment service for customers whereby the carrier does not have to generate invoices for the shipper.

“By speeding payment process, you make yourself more of a shipper choice to carriers,” says Ken Sherman, vice president of the IntelliTrans business unit of TransCore.

Ajesh Kapoor, senior director at GT Nexus, the Oakland, Calif.-based supply chain services provider, says the quest for visibility www.foodlogistics.com

FLOG_44-47_SectReptTMS.indd 47

has always been a challenge in TMS because transportation is only one aspect of the supply chain. To provide “end to end” supply chain visibility, it is necessary for users to integrate the transportation piece with other pieces, such as purchasing, inventory and other points in the supply chain.

Kapoor further notes that while software technology advances, it is important for an organization to integrate as many external functions and internal functions as possible to reap the benefits of what many envision as “b2b connectivity.”

One of the more promising developments TMS observers are noting is a growth in pooled distribution, whereby different (oftentimes

For more information: 3GTMS, 203-567-4610, 3gtms.com CAMS SOFTWARE CORP., 866-699-2267, camspro.com GENCO, 800-677-3110, genco.com GT NEXUS, 510-808-2222, gtnexus.com ISOTRAK, 404-995-6655, isotrak.com LOGILITY, 800-762-5207, logility.com MANHATTAN ASSOCIATES, 877-596-9208, manh.com NEXT GENERATION LOGISTICS, INC., 888-607-9372, nextgeneration.com ODW LOGISTICS, INC., 262-548-1220, odwlogistics.com TRANSCORE, 800-923-4824, transcore.com TMW SYSTEMS, 216-831-6606, tmwsystems.com competing) shippers send shipments on a common carrier.

A stronger sense of cooperation could portend even more benefits in the future. Several observers note that social media has created a new forum for sharing operational information. The f&b industry has shown more willingness to share operational information, but competitive issues are still keeping people from making their data accessible. ◆ FOOD LOGISTICS

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Food Logistics Staff

Whether you’re committed to stay at peak performance or you recently realized you need to seriously tone up, this conference delivers insights and resources that can 2014 Distribution Solutions Conference help strengthen your operational performance. The workout includes: October 21-23 • Indiana Convention Center in Indianapolis > WORKSHOPS on warehouse, transportation, technology, HR, and executive topics. > EXPOSITION with the latest equipment & technology + top service providers. > NETWORKING with distributor peers from across the industry.

Jolene Gulley Publisher

Elliot Maras DayCarrie Konopacki Judy Welp + Opening Super Sessions

Lara Sowinski Editor-in-Chief

Managing Editor

Midwest and West Coast Sales Manager

East Coast Sales Manager

Amazon.com: The Potential Impact on Foodservice Distribution The Food LogisticsLeadership Team is eager to meet you!

Development that Works Stop by booth #902 or contact Carrie Konopacki to schedule a meeting 920.568.8309; mobile 262.473.9260; Back to theckonopacki@ACBusinessMedia.com Future II: A Look at the U.S. Economy The 2014 Distribution Solutions Conference is sponsored by the International Foodservice Distribution Association IFDAonline.org

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Alison Levine

DAY 1 GENERAL SESSION Captain of the First American Women’s Everest Expedition, West 9/15/14 1:55 PM Point Adjunct Professor on Leadership, and author of On the Edge:

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ADVERTISER INDEX ADVERTISER........................................................................................ PAGE C. H. Robinson Worldwide, Inc.......................................................................... 13 CAMS Software.............................................................................................. 9, 51 Dematic................................................................................................................ 7

CONSOLIDATION, DISTRIBUTION AND WAREHOUSING

Flagship Logistics............................................................................................... 45 Ford Motor Co...................................................................................................2-3 Great Dane Trailers............................................................................................. 52 Food Logistics.............................................................................................. 39, 48 Interlake Mecalux............................................................................................... 37 Isuzu Truck......................................................................................................... 31 ITI & FAC............................................................................................................. 47 Jungheinrich....................................................................................................... 41 Magline, Inc........................................................................................................ 15 MercuryGate....................................................................................................... 35 Mitsubishi Fuso Truck........................................................................................ 17 Newell Rubbermaid............................................................................................ 11 Penske.................................................................................................................. 5 Port of Stockton California................................................................................. 25 PROCAT Management Services........................................................................ 46 Railex.................................................................................................................. 21 Rehrig Pacific Co................................................................................................ 33 RLS Logistics..................................................................................................... 34 Save-A-Load...................................................................................................... 29 Sensitech............................................................................................................ 27 Utility Trailer Mfg. Co.......................................................................................... 43 Volvo Trucks....................................................................................................... 19 Wavelink............................................................................................................. 24

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FOOD LOGISTICS

RK AMR M EE ETTTPPP LLL AA M A A CC E K RA K CE E

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FOOD (and More) FOR THOUGHT

ELLIOT MARAS

Today’s Food Shoppers Are Less Likely To Have A Primary Destination

Food marketers must cater to a more mobile buying audience; logistics partners can help them succeed.

W

hile a natural disaster like the late August San Francisco earthquake drives home the need for emergency preparedness in the food supply chain, the more subtle changes in consumer lifestyles point to less dramatic but equally alarming aspects of a changing retail landscape. Consumers, armed with Internet connectivity, are purchasing food when and where they want like never before. The result is a more fragmented retail marketplace that makes logistics more important for food marketers.

The recent U.S. Grocery Shopper 2014 Trends report from the Food Marketing Institute (FMI) examines shifts in consumer shopping habits. The data was based on an online survey of 2,116 U.S. shoppers between the ages of 18 and 74.

The changes detailed in the 142-page report impact every player in the retail food chain. Every player needs to know where the consumer is spending more of their time. Processors, wholesalers and retailers all need their logistics partners to be up to speed on the challenges they face.

Who shops the way they used to?

As I scanned the FMI report, I was struck by how many of the changes I could relate to as a shopper. I had not realized how much my own habits have changed in recent years. Several years ago, my wife and I made one weekly trip to the same supermarket for groceries.

Today, we go to four retailers a week – two “dedicated” (traditional) supermarkets, one general merchandise discounter that sells food, and a membership warehouse club. In addition, every other week, we visit an SHOPPERS independent grocer that specializes in INDICATING: 9% fresh produce and often has outstandNO PRIMARY ing limited-time offers. We also review FOOD coupons two or three times a week SHOPPING from CVS and daily via email.

My own experience speaks to one of STORE Source: Food Marketing the FMI report’s overriding themes – Institute U.S. Grocery the jump in the number of consumers Shopper Trends, 2011-2014 who no longer have a primary store for food. Clearly, I am not the only shop3% per who no longer relies on one store 2% 2% to satisfy all his or her needs.

The report notes that 9 percent of 2011 2012 2013 2014 consumers in 2014 said they have no primary store for grocery shopping.

That might not sound like a big number, but it triples the previous year’s number. The trend first emerged in 2011 when 2 percent of consumers indicated no primary store for food purchases.

The lack of a primary destination for food challenges food marketers to manage more different types of retail destinations. This represents both a marketing and logistics challenge.

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• FOOD LOGISTICS

Longer-term trends, meanwhile, continue to confront the food industry.

Away-from-home shopping grows Away-from-home food spending has been growing at the expense of at-home food spending since 1953. In 2006, the Great Recession delivered the first and only blip in this trend, but the interruption didn’t last long. Awayfrom-home food spending rebounded in 2008, MARAS and in 2014, away-from-home nearly matched at-home food spending.

If present trends continue, foodservice could overtake retail in consumer food spending.

Food logistics professionals will continue to play a big role in enabling manufacturers to cash in on growing foodservice sales.

E-commerce, meanwhile presents another opportunity, one that relies on astute logistics support as much as any sales channel. Thus far, it doesn’t look like e-commerce plays a big role in food sales; only 8 percent of consumers have ordered groceries online, the report notes.

But as a shopping tool, the Internet is empowering many shoppers to determine what products they want and where to get them. While only 8 percent of consumers have ordered groceries online, 27 percent have used the Internet to view prices, availability and coupons in planning a shopping trip, the FMI report notes.

Food marketers need to stay connected to consumers on an ongoing basis if they want to win their business. The more shopping options merchants give consumers, the more they will sell. To maximize options, food companies need to be able to ship orders on fast notice from different delivery points.

Keep in mind that mobile Internet connectivity has only recently become a common lifestyle, and the millennial generation has not reached maturity as a buying audience. Big changes are in store.

Millennials bring different habits The FMI report also notes the millennial generation is first generation to engage in “meal based” shopping. This refers to planning a grocery list around meals as opposed to the traditional mindset of keeping a kitchen pantry stocked. These millennial consumers are as likely to build their shopping list around recipes or a plan of specific meals as around sales specials promoted by a store.

Yes, I was surprised by how many of the changes in the FMI report I could relate to as a shopper. But when I consider the fact that I am a baby boomer, I can only imagine how different the retail food landscape will look when the millennial generation reaches their prime spending years. ◆ Elliot Maras is managing editor of Food Logistics. www.foodlogistics.com

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Distribution Solutions Conference October 21-23, 2014 • Indianapolis, IN

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