Food Logistics September 2019

EMBRACE NEW TECHNOLOGIES

DETER PESTS WITH AN INTEGRATED STRATEGY

CARRIERS ADOPTING BLOCKCHAIN PLATFORM

Global Supply Chain Solutions for the Food and Beverage Industry

ONLINE DEMAND CHALLENGES GROCERS E-COMMERCE MOMENTUM RISES AS COMPANIES BETTER UNDERSTAND CUSTOMER PROFILES.

Issue No. 210 September 2019 FoodLogistics.com

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STANDARD PRE-COLLISION ASSIST WITH AUTOMATIC EMERGENCY BRAKING*

DRIVER CONFIDENCE. WE’VE MADE IT OUR BUSINESS. The 2019 Ford Transit Connect offers an array of available driver-assist technologies. See what else is new at ford.com/transitconnect.

THE SMART MONEY’S ON TRANSIT CONNECT.

*Driver-assist features are supplemental and do not replace the driver’s attention, judgment and need to control the vehicle. Pre-Collision Assist with Automatic Emergency Braking can detect pedestrians, but not in all conditions and does not replace safe driving. See owner’s manual for system limitations.

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ON THE MENU

September 2019 ISSUE NO. 210

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COLUMNS FOR STARTERS

No Good Outcome To U.S.-China Trade War

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The opportunity for a positive outcome to this bilateral trade war has evaporated.

COOL INSIGHTS

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COVER STORY

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E-commerce momentum picks up for the food and beverage industry as companies better understand customer profiles.

FEATURE THIRD-PARTY & REFRIGERATED LOGISTICS

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Improving the Customer Experience with TMS

By successfully transferring to a centralized data and technology platform—you have a great deal to gain in supply chain efficiencies and customer engagement.

SECTOR REPORTS WAREHOUSING

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Deter Pests with an Integrated Strategy

Food safety begins in the warehouse, and that means having a pest management program in place.

Embrace New Technologies

Get ahead of the issues today that are impacting the industry tomorrow with Industry 4.0 technologies to invigorate your business.

SOFTWARE & TECHNOLOGY

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The cold chain must be an integrated process where all players recognize their own role as well as those of the previous and subsequent players.

FOOD (AND MORE) FOR THOUGHT

Grocers Face Challenges Serving Online Demand

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Every Role Matters

Hitting the Trifecta in Supply Chain Software Development

DEPARTMENTS

Supply Scan 14 Food on the Move 8

An application within a network, leveraging data from the ecosystem, is where the magic starts to happen.

OCEAN PORTS & CARRIERS

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WEB EXCLUSIVES

Carriers Adopting Blockchain Platform

TradeLens confirms the scope of the challenges the global shipping industry faces and provides transparent solutions.

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Avoiding and Managing Recalls: How Integrated Processes Can Help foodlogistics.com/21084291

FDA Has Suspended 6 Facility Registrations Under FSMA foodlogistics.com / 21083542

10 Companies Changing the Food and Beverage Space in 2019 foodlogistics.com/ 21082726 www.FoodLogistics.com

Published and copyrighted 2019 by AC Business Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher.

Food Logistics (USPS 015-667; ISSN 1094-7450 print; ISSN 1930-7527 online) is published 10 times per year in January/February, March, April, May, June, July, August, September, October and November/December by AC Business Media, 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices.

POSTMASTER: Send address changes to Food Logistics, P.O. Box 3605, Northbrook, IL 60065-3605. Subscriptions: U.S., one year, $45; two years, $85; Canada & Mexico, one year, $65; two years, $120; international, one year, $95; two years, $180. All subscriptions must be paid in U.S. funds, drawn from a U.S. bank.

Printed in the USA. Cover Image: SDI Productions / E+ / Getty Images

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DO YOU KNOW THE REAL TEMPERATURE OF YOUR PRODUCT DURING TRANSIT? Cooltrax Fresh InTransit provides users the ability to remotely manage and control their refrigerated assets. Our direct connection and seamless integration to Carrier and Thermo King reefers allow full bi-directional control from any web browser. Enhance your temperature monitoring ability with wireless sensors to gain uninterrupted and continuous visibility into your product temperatures.

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DETAILS

FROM THE EDITOR’S DESK

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FOR STARTERS

NO GOOD OUTCOME TO

U.S.-CHINA TRADE WAR F

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SOWINSKI

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or over a year, the U.S. and China have engaged in a trade war that has seen both sides ratchet up retaliatory tariffs on an increasing number of goods.

American farmers have been hit with tariffs on a range of agricultural exports, while U.S. consumers are seeing higher prices on goods imported from China, such as footwear, diapers and appliances.

The opportunity for a positive outcome to this bilateral trade war has evaporated.

Initially, trade negotiations between the U.S. and China appeared to make progress. These early discussions were at least effective in stalling the escalation of retaliatory tariffs, which by the way, the vast majority of economists, trade experts and others agree are a losing game for all parties involved.

As we start September, the prospects for trade negotiations between the U.S. and China are dim while the negative effects of the trade war are more evident.

Identifying buyers for American farm goods and cultivating relationships takes time. It’s not easy for famers to suddenly find new buyers for crops, meat, and other foods, and if they can, it’s likely they’ll get a less than premium price. Likewise,

U.S. companies that invested in China over the years for low-cost manufacturing and/or as a growing market to sell in to cannot alter supply chains overnight.

The trade war is also generating considerable turbulence in the U.S. stock market, which due to the highly integrated nature of financial markets across the world, is amplifying economic impacts and adding to fears of another global recession.

However, it’s the lack of strategy that is most worrisome. When President Trump withdrew the U.S. from the Trans-Pacific Partnership shortly after taking office, it was clear that U.S. trade policy would be based more on emotion and grandstanding than it would on strategy and long-term gains. Since then, we have seen an overhaul of NAFTA that produced questionable improvements; heightened criticism of the World Trade Organization; and increased trade friction with the European Union and other trade partners/allies.

It’s time for a new course.

Enjoy the read.

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

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

WWW.FOODLOGISTICS.COM PRINT AND DIGITAL STAFF Group Publisher Jason DeSarle Associate Publisher Judy Welp Editorial Director Lara L. Sowinski lsowinski@ACBusinessMedia.com Editor John R. Yuva jyuva@ACBusinessMedia.com Web Editor Mackenna Moralez mmoralez@ACBusinessMedia.com Contributing Editor Barry Hochfelder Senior Production Manager Cindy Rusch crusch@ACBusinessMedia.com Creative Director Kirsten Wiskus Audience Development Director Wendy Chady Audience Development Manager Angela Franks ADVERTISING SALES (800) 538-5544 Associate Publisher (East Coast) Judy Welp (480) 821-1093 jwelp@ACBusinessMedia.com Sales Manager (Midwest and West Coast) Carrie Konopacki (920) 542-1236 ckonopacki@ACBusinessMedia.com National Automotive Sales Tom Lutzke (630) 484-8040, tlutzke@ACBusinessMedia.com EDITORIAL ADVISORY BOARD Jaymie Forrest, President & CEO, Activ Technologies, Inc. John Haggerty, Vice President of Business Development, Burris Logistics Robert A. Norton, Ph.D., Professor of Veterinary Microbiology, Public Health and Biosecurity, Auburn University; Coordinator of National Security Initiatives, The Futures Laboratory Jon Shaw, Director of Sustainability and Global Marketing Communications, UTC Climate, Controls & Security Smitha G. Stansbury, Partner, FDA & Life Sciences Practice, King & Spalding CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (847)-291-4816 circ.FoodLogistics@omeda.com LIST RENTAL Jeff Moriarty, InfoGroup (518) 339-4511 jeff.moriarty@infogroup.com REPRINT SERVICES Carrie Konopacki (920) 542-1236 Fax: (920) 542-1133 ckonopacki@ACBusinessMedia.com AC BUSINESS MEDIA Chief Executive Officer Barry Lovette Chief Financial Officer JoAnn Breuchel Chief Digital Officer Kris Heineman Chief Content Officer Christoph Trappe Vice President, Sales & Marketing Amy Schwandt Director of Digital Operations & IT Nick Raether Director of Digital Strategy Joel Franke Published and copyrighted 2019 by AC Business Media.

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage or retrieval system, without written permission from the publisher.

FOOD LOGISTICS | SEPTEMBER 2019

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SUPPLY SCAN

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

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HOW UNUSED MILK IS BECOMING A SOURCE OF SUSTAINABLE CLOTHING MATERIALS

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Cargill is opening a new Innovation Lab at the University of Illinois at Urbana-Champaign campus, allowing students to focus on solving the world’s greatest challenges across the global food and agriculture supply chain.

The Lab will be led by Cargill’s digital labs team of data scientists, enabling students and staff to work directly with business leaders, operations teams and customers to help move digital ideas to test mode in a matter of weeks.

“Cargill’s commitment to engaging our students in its innovation process will add a new dimension to their educational experiences at Illinois,” said Robert J. Jones, chancellor, University of Illinois at Urbana-Champaign. “I had the good fortune to visit Cargill’s headquarters and engage with their leadership in this process. I am excited that Cargill has decided to join the dynamic environment in our Research Park.”

ONE NETWORK ENTERPRISES ENHANCES THE SUPPLY CHAIN BUSINESS NETWORK FOR THE RESTAURANT & FOOD SERVICE INDUSTRY

One Network Enterprises latest version of its Real Time Value Network powered by NEO intelligent agents for the Restaurant & Food Service industry is now available. The software will enhance the real-time business network that bring resiliency, efficiency and shared business benefits for the entire network of restaurants and food service companies and their rich ecosystems of suppliers, distributors and logistics providers.

“For the Restaurant & Food Service industry, driving forecast accuracy from 60 or 70 percent into the 90s is a big deal, and our platform makes it possible,” says Greg Brady, CEO of One Network Enterprises. “One Network runs the whole process autonomously with the aid of its AI-enabled NEO agents. This means that restaurants can dramatically improve service levels and deliver the freshest product for the best possible customer experience—while at the same time cutting inventories in half, reducing waste, and lowering supply chain expenses, like the huge cost of expediting. Plus, there’s a real revenue bounce as stockouts disappear. It’s a recipe for success—and a true competitive advantage.”

The new functionality, NEO, makes autonomous supply chain management possible for each location and its trading network. The perpetual inventory capability keeps count of stock on hand for all current products and raw materials, which is crucial to replenishing needs so that inventory levels across millions of product-restaurant combinations can be monitored, refined and replenished.

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Mi Terro, a startup based in Los Angeles, aims to draw attention to the amount of waste produced in the dairy industry by creating sustainable fabrics from unused milk. The company sources excess milk from a dairy farm in China before processing it and turning milk into fibers capable of being used in durable, lightweight clothing.

The entire milk-to-clothing process takes about two months to complete with one glass of milk corresponding to five shirts. Mi Terro collects milk from its dairy farm partner, skims it to remove fats before dewatering it to become powdered milk. It is then dissolved and purified to remove substances that are not casein—the proteins that make up a large proportion of milk.

Once the casein is isolated, it is immersed in an alkali solution and passed through a spinneret to solidify the proteins into fibers.

After this, it is removed from the alkali solution and the fibers are stretched, spun into yarn and ready to be used in the manufacturing of clothing.

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

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Rear door gasket design optimizes thermal performance.

The light weight Utility Barrier Door is designed to seal better than any other door in the industry. Utility’s one-piece gasket is fabricated from dual durometer rubber and is designed to eliminate more potential entry points for heat and moisture to enter the reefer. In tandem with Utility’s industry-leading foam-in-place insulation, the 3000R® delivers the industry’s highest level of thermal performance.

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SUPPLY SCAN

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

TAKEOFF TECHNOLOGIES AND WAKEFERN FOOD LAUNCH AUTOMATED MICROFULFILLMENT CENTER

Twitter

Takeoff Technologies has teamed up with Wakefern Food Corp., the largest retailer-owned grocery cooperative in the U.S., to launch a highly automated micro-fulfillment center in New Jersey.

“We are excited to partner with Takeoff Technologies to see how their hyperlocal automation technology will benefit our cooperative, retail members and shoppers,” said Steve P. Henig, Wakefern’s vice president of Digital Commerce & Analytics. “We are really proud of our eGrocery shopping platform, ShopRite from Home, and believe this partnership will enhance our online shopping service.”

The new center will serve select ShopRite stores operated by Wakefern member Inserra Supermarkets in North Jersey and New York. Takeoff’s automated technology will use advanced robotics in the fulfillment center, allowing upwards of 60 grocery items to be assembled in minutes, increasing efficiency.

AMAZON APPLIES FOR BRICK-AND-MORTAR LIQUOR STORE

Amazon has reportedly applied for a license to open a liquor store in San Francisco. The e-commerce giant is rumored to begin selling beer, wine and spirits.

Business Insider reports that the storefront would allow consumers to buy alcohol directly from Amazon, allowing the company to make a physical presence in the city. The 200-square-foot liquor store would be at the site of its current warehouse in San Francisco and would only be operational from 8 a.m. to 4 p.m. daily. Though, alcohol deliveries from the store would be made after-hours from 8 a.m. to midnight.

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A farm workers advocacy group has stepped up pressure on The Wendy’s Co. over its purchases of tomatoes by calling for a nationwide boycott of the Dublin, Ohio-based burger chain, according to news reports. The Coalition of Immokalee Workers (CIW), started by farmworkers in Immokalee, Florida, in 2001, called for the boycott as part of its long-running campaign to convince Wendy’s to join the Fair Food Program.

Several chains, including Wendy’s competitors McDonald’s and Burger King, have been part of the program for years. As part of that effort, the restaurants agree to pay a penny per pound surcharge directly to workers.

“Ten years ago, we sent a letter to Wendy’s asking them to follow Taco Bell’s example and work with us to protect farmworkers’ fundamental human rights in their supply chain,” the coalition’s Cruz Salucio said in a statement. “They refused then, and they continue to turn their backs on farmworkers to this day, even as we built a groundbreaking new approach to social responsibility in partnership with Florida tomato growers and 14 other major food retailers.”

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FARMWORKERS CALL FOR WENDY’S BOYCOTT OVER TOMATO BUYING

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SUPPLY SCAN

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

IMPOSSIBLE FOODS SIGNS MAJOR MEAT SUPPLIER AFTER SHORTAGE

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FDA AND CDC TEAM UP TO STOP CYCLOSPORA CONTAMINATION

The FDA and Centers for Disease Control and Prevention (CDC) are teaming up to identify data gaps and research that is needed to develop improved tools to detect, prevent and control Cyclospora contamination of food.

Outbreaks of cyclosporiasis has been reported in the U.S. since the mid-1990s and linked to various types of imported fresh produce, including raspberries, basil, snow peas, mesclun and cilantro.

The first time the parasite was confirmed in domestic produce was 2018.

Representatives of the FDA, CDC, food industry and academia participated in a scientific workshop last month to discuss gaps in detection methods and plans for the developmental tools to help keep Cyclospora out of food before and after harvest.

“Together, the FDA and CDC are committed to protecting Americans from Cyclospora and other organisms that can make them sick,” said Frank Yiannas, deputy commissioner for food policy and response for the FDA, and Monica Parise, director of the division of parasitic diseases and malaria for the CDC in a press release. “Both agencies will continue to use all the tools they have available, from new detection techniques to DNA fingerprinting tools to enforcement tools like import alerts, to prevent cyclosporiasis illnesses in the United States.” www.foodlogistics.com

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Impossible Foods suffered from a product shortage this spring, prompting several restaurants to pull the product off their menus as they anxiously waited for meat alternatives.

In order to ensure that the shortage was a one-time error, the company has teamed up with major meat supplier OSI Group to help meet the demand from consumers and restaurants. The partnership comes at a time when consumers are turning more often to plant-based meats.

Reuters reports that Impossible Foods and OSI will be investing in OSI facilities to produce the patties, while multiple facilities in the Chicago area will start supplying Burger King and other customers as well.

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SUPPLY SCAN

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

ADDRESSING FOOD WASTE IS A $2.5 TRILLION MARKET OPPORTUNITY

A new industry is emerging as the world grows more concerned about climate change.

According to the United Nations, food wasted in the supply chain and at home is one of the largest contributors to global climate change, generating 4.4 gigatons of carbon dioxide each year. The combined costs of social, economic and environmental impact reach $2.5 trillion annually, prompting businesses to create new solutions that address food waste.

Data analytics company Good for Food is assisting with educating people by offering a smart tracker technology to hotels and large commercial kitchens to reduce food waste and save costs.

There are currently limited solutions that help prevent food waste, so the technology can educate the kitchen on how to reuse certain items or ingredients in other parts of the menu. For example, ingredients can be “upcycled” through deep-frying or using them as a garnish rather than being thrown out.

The company’s “actionable insights” provide customers upwards of 50 percent in food waste reduction, CNBC reports.

Transfers loads from one pallet type to another

ALBERTSONS EASES ONLINE GROCERY SHOPPING FOR CUSTOMERS WITH DISABILITIES

Albertsons is aiming to make online grocery shopping more accessible for customers with disabilities.

“As a long-time customer, I appreciate the company’s commitment to accessibility,” says Darrell Hilliker, a Safeway shopper in Arizona. “Through the straightforward implementation of the objective Web Content Accessibility Guidelines, blind people like me will be empowered to reap the benefits of online grocery delivery.”

The grocery chain is aiming to conform to the Web Content Accessibility Guidelines (WCAG) version 2.0 Level AA as its accessibility standard. It has made sigdiego_cervo / iStock / Getty Images Plus nificant enhancements to its online shopping websites and mobile applications to improve accessibility. Albertsons is teaming up with several visually impaired customers of the company’s family of grocery stores in a process known as Structured Negotiation.

“Ensuring a great shopping experience for all customers is one of our highest priorities, which includes ongoing web and mobile app accessibility enhancements to provide access to customers of all abilities,” says Ramiya Iyer, group vice president, information technology forAlbertsons Companies Inc..

GROCERY INVOLVED IN HALF OF TECHNOLOGY-BASED PROJECTS

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According to research done by the University College London, the grocery sector is responsible for nearly half of all distributed ledger technology-based supply chain projects.

The grocery industry is leading the pack, with 15 percent of projects taking place in the healthcare and fashion industries.

Meanwhile, 39 percent of projects are operating in unspecified areas. Coin Telegraph reports that these non-sector specific projects are focused on a use case capable of application across multiple industries.

The report follows an ongoing trend of grocery retailers teaming up with technology companies to use blockchain to track the entire supply chain. Most recently, Walmart China announced that it was going to use the ledger to track the supply chain of perishable groceries to ensure freshness. studiocasper / iStock / Getty Images

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CAPTIVE SHOP MODEL LEADS TO SUCCESS T

Taking over shop operations and offering customized solutions make Transervice one-of-a-kind.

ranservice has perfected a formula for long-term client partnerships. It began 50 years ago with supporting “one to one relationships” and continues until this day.

Transervice provides dedicated on-site maintenance and logistics services. “This means that our clients will have the same technicians working on their vehicles every day.

Over 1,150 of the 1,200 Transervice employees work at our customers’ locations,” according to Wolfgang Marschhauser, Senior Vice President.

“Since 1969, our business has

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grown extensively in the food, dairy and beverage marketplace. It’s an area that requires comprehensive maintenance services due to the nature of the product – if a refrigeration unit goes down, the product is at risk. When you have the same technicians dedicated to a client, they get to know the equipment and even more importantly develop relationships with the drivers,” he says.

Transervice has been providing its services, maintenance, leasing, freight brokerage and logistics for a variety of food related businesses in various aspects of the food industry

for many years, some up to 40 plus.

Industry leaders such as Bimbo Bakeries, Kroger, Praire Farms and Wakefern have put their trust in Transervices hands.

Whether it is helping to optimize fleets, maintaining rolling stock and MHE, leasing equipment or providing drivers, Transervice has been dedicated to creating specialized programs to ensure the success of its customers in the food, dairy, beverage, manufacturing and distribution industries.

Transervice’s unique operating model caters to clients with demanding needs and customers.

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

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CHICK-FIL-A NOW DELIVERS FROM ITS OWN DISTRIBUTION CENTER

DELIVERY DRIVERS ARE EATING YOUR FOOD A survey conducted by US Foods found that 30 percent of drivers admit to stealing a bite of food that they’re responsible for delivering. The survey gathered information from 500 food delivery drivers and more than 1,500 customers in America who order through apps like DoorDash, Postmates, Grubhub and UberEats.

According to NPR, respondents ranged from 18 to 77 years old, with a median age of 31. Drivers who reported working for a food delivery app had a median age of 30.

Of the drivers surveyed, 54 percent reported that they have been tempted by the smell of a customer’s food, while half of that figure actually stole a bite.

On a scale of 1 to 10, with 1 being “no big deal” and 10 signifying “absolutely unacceptable,” the average customer response was an 8.4 out of 10—indicating that most people don’t want their food tampered with.

To prevent drivers from stealing some of their food, 85 percent of customers recommended adding tamper-evident labels or packaging to their containers, NPR reports.

Meanwhile, some delivery services, such as Postmates, already have strategies in place.

“Each person who completes a delivery using Postmates expressly agrees that all food and goods delivered will arrive in a tamper-free form and in compliance with all applicable food health and safety laws,” Postmates said in a statement.

Chick-fil-A has made its first delivery from its own distribution center last week, saying that there are many more to come as it continues to build its own distribution network.

The restaurant chain first announced the distribution center this spring, saying that it will open initially as a pilot facility while the full-scale permanent facility is built.

“We are thrilled to be opening our first distribution center right here in Georgia,” said Paul Trotti, executive director on the distribution project. “This investment will allow us to continue to innovate around Chick-fil-A restaurants’ unique needs so that we can better serve restaurant operators and team members, and ultimately our guests.”

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a sense of urgency. After the close of Q2 and the Fourth of July holiday, shippers don’t feel compelled to make deliveries by a specific date.

This summer is a little different. There was an uptick in truckload freight activity at the end of July that carried over into August as shippers move imports ahead of new tariffs beginning Sept. Spot van rates averaged $1.84 per mile in July, as van volume increased 6.8 percent from June.

Any additional volume will be welcomed by reefer haulers. Harsh weather curtailed and/or delayed many produce harvests this year, but improved yields out of California contributed to an 8.7 percent increase in reefer volume from June to July. Spot reef-

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Truckload Freight: Steady as She Goes By Mark Montague Summer usually marks the beginning of a downward turn for truckload rates. Volume and capacity are obvious factors but so is

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DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Mark Montague is senior industry pricing analyst for DAT Solutions, which operates the DAT® network of load boards and RateView rate-analysis tool.

He has applied his expertise to logistics, rates, and routing for more than 30 years.

Mark is based in Portland, Ore.

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er rates averaged $2.19 per mile nationally, a 6-cent drop from June but otherwise the highest monthly average since February.

The July 2019 average was down 41 cents from July 2018, even though volume increased 12 percent compared to last year.

In August, those California markets fell off and gave way to stronger produce shipments from Michigan, Minnesota, and other Midwest markets.

Moving forward, the new tariffs are a wild card, on top of the potential risks to supply chain operations during hurricane season. But truckload volumes and pricing followed normal seasonal patterns in July and August, despite uncertainty in some segments of the economy.

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

FMCSA WANTS TO MAKE DRIVERS SAFER AND HAVE MORE FLEXIBILITY The Federal Motor Carrier Safety Administration (FMCSA) has published its proposed rulemaking on changes to the hours of service (HOS) rules to increase safety on roadways by updating existing regulations for commercial vehicle (CMV) drivers.

FMCSA’s proposed rule on hours of service offers five key revisions to the existing HOS rules: • Increase safety and flexibility for the 30-minute break rule by tying the break requirement to eight hours of driving time without an interruption for at least 30 minutes, allowing the break to be satisfied by a driver using on duty, not driving status, rather than off duty.

• Modify the sleeper-berth exception to allow drivers to split their required 10 hours off duty into two periods: one period of at least seven consecutive hours in the sleeper berth and the other period of not less than two consecutive hours, either off duty or in the sleeper berth. Neither period would count against the driver’s 14-hour driving window.

• Allow one off-duty break of at least 30 minutes, but not more than three hours, that would pause a truck driver’s 14-hour driving window, provided the driver takes 10 consecutive hours off-duty at the end of the work shift.

• Modify the adverse driving conditions exception by extending by two hours the maximum window during which driving is permitted.

• A change to the short-haul exception available to certain commercial drivers by lengthening the drivers’ maximum on-duty period from 12 to 14 hours and extending the distance limit within which the driver may operate from 100 air miles to 150 air miles.

PORT OF NEW YORK AND NEW JERSEY RELEASE COMPREHENSIVE PLAN The Port Authority of New York and New Jersey recently released its comprehensive 30-year plan.

The port has experienced record growth in cargo volume. During the first five months of 2019, the port set an all-time record for cargo, handling 3,041,814 TEU. “Our predecessors had the foresight to clearly understand the value of the port to regional jobs and economic activity and made substantial investments that today are paying huge dividends,” said Port Authority Chairman Kevin O’Toole in the press release. “This plan will continue the momentum we have built and drive this port to new heights that two decades ago would have seemed impossible to achieve.”

The master plan focuses on five principles: • Ensuring sustainability and resiliency in all operations and future developments • Promoting regional economic generation • Establishing state-of-the-art facilities • Providing a “Platform for Partnership” for all local stakeholders • Shape future growth of the region The press release also said that the port authority will continue to drive down diesel emissions, and work to minimize noise, congestion and other environmental impacts by working with tenants and operators to incorporate performance goals and incentives.

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SEPTEMBER 2019 | FOOD LOGISTICS

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BY EDUARDO KERBEL

EVERY ROLE MATTERS M The cold chain must be an integrated process where all players recognize their own role as well as those of the previous and subsequent players.

aintaining temperature control for fruits and vegetables in transit is the most critical factor in assuring successful transport so consumers can enjoy fresh produce at its top condition, flavor and nutritional value.

Yet in the global transport of perishable goods, the “cold chain” that stretches from point of harvest to point of sale can be thousands of miles long with many players participating in the process. With each perishable item having its own distinct optimum temperature and tolerance for temperature fluctuations, how can temperature control for quality assurance be maintained? Considering the volume of goods successfully shipped every day, it’s both complicated and a modern marvel.

The cold chain must be an integrated process where all players recognize their own role as well as those of the previous and subsequent players. This is necessary to assure compliance.

Preparations and Precautions

Eduardo Kerbel joined Carrier Transicold Global Container Refrigeration in 2015, building on a 29-year career focused on postharvest business practices for private industry and government and as an educator.

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The packing plan is where the cold chain begins. Products need to be cooled as quickly as possible after harvest to remove the heat load accumulated over the many weeks of growing in the field or orchard.

Packing plant personnel must process, cool and pack the produce quickly, avoiding delays of even a day. At no point, should there be mixing of cold and warm products.

Before transport, products should be pre-cooled to their minimum safe temperature to ensure all biochemical and physiological

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processes are slowed down and to guarantee enough potential postharvest life to endure transport and commercialization at destination markets. Most efficient and effective ways to pre-cool fresh produce involve very cold water, forced air or even vacuum, depending on the type of commodity.

The Journey Begins If produce is loaded into refrigerated containers or trucks using non-refrigerated cross docks or loading stations, the container’s refrigeration system should not be running while loading, as warm air from the surroundings will likely be introduced into the container.

When fresh produce arrives at destination ports, it either goes directly to distribution centers or ripening facilities in the same containers, or it is transferred to refrigerated trucks and then hauled.

Keeping it Cool Up to this stage of the perishable commodity’s journey from farm to fork, the “heavy lifting” of temperature control has been largely handled by a container refrigeration system. Now, nearing the final destination, the perishables will leave the security of the container and may be subject to unintended breaks in the cold chain as they get closer to the “finish line” of the consumer’s shopping cart.

If fresh produce only spends a short time at distribution centers before being dispatched to stores and supermarkets, it may not suffer negative consequences from being kept at temperatures too high or too low. However, if these goods are staged at suboptimal temperatures

for even several hours, then deterioration, ripening or chilling injury can be triggered.

After being staged in distribution centers, fresh produce will be dispatched for stores, supermarkets and wholesale markets.

RomarioIen / iStock / Getty Images Plus

COOL INSIGHTS

Fresh on Arrival Once fresh produce arrives at stores, supermarkets and wholesale markets, it will often be commercialized at warmer than optimal temperatures. Typically, stores and supermarkets maintain ambient temperatures between 68 and 75 degrees Fahrenheit for the comfort of shoppers. Unless stores have the space and equipment to create refrigerated storage areas kept at different temperatures, backroom staging of fresh produce tends to range between 50 and 90 degrees Fahrenheit.

Fresh produce usually remains on shelves between one and five days before final sale. Managing fresh produce display areas is a constant battle against time and spoilage (over-maturity), where produce managers work to keep shrink levels low.

Exposing fruits and vegetables to suboptimal warmer or colder temperatures during distribution and commercialization will undermine quality, condition and shelf life potential.

We have technology that is better than ever to maintain temperature compliance. The rest is up to those who manage the distribution process so that consumers can enjoy fruits and vegetables that seem freshly picked, even when the originating farm or orchard is half a world away.

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COVER STORY

BY MARY SHACKLETT

GROCERS FACE CHALLENGES SERVING D

ONLINE DEMAND

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n April 2019, EMarketer reported that “U.S. grocery ecommerce—specifically online food and beverage sales— will grow 18.2 percent to $19.89 billion in 2019.” The EMarketer report mentions Amazon, Kroger and Walmart as key players in the development of online food ordering and delivery channels.

Nevertheless, as traditionally “in-store” grocery retailers focus on online orders and deliveries, challenges present themselves in the form of e-commerce channel development, integration and support of systems and business processes for online sales and deliveries, as well as ways to assure customer satisfaction.

Kroger is just one example.

In 2018, the chain’s online sales increased by 66 percent, but in early 2019, Kroger CEO Rodney McMullen also acknowledged that the company was behind where he wanted it to be, and that part of the challenge

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milindri / iStock / Getty Images Plus

E-commerce momentum picks up for the food and beverage industry as companies better understand customer profiles.

was forming productive partnerhas made products from 1,600 stores available quickly online— ships with startups that specialized without Kroger having to set up in online orders and deliveries and deploy its own online ordering that were capable of providing an applications. This gives Kroimpetus to the U.S. grocery development of ger time to develop its own e-commerce— Kroger’s online proprietary e-commerce specifically online food platform, while it meets onfood channels. and beverage sales— line customer needs today.

There were also difficulties will grow 18.2 On the backend of online integrating online percent to $19.89 ordering and in the food technologies and supply chain itself, Kroger billion in 2019. business processhas partnered with online EMarketer grocer Ocado in the U.K. in es into Kroger’s order to use robotics in distribuexisting systems and operations.

Since then, Kroger has moved tion centers for faster fulfillment of customer orders. forward.

The Kroger story is not uncomIt now sells with Instacart, which

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mon in the food and beverage industry. Companies understand that they have to meet the online ordering needs of their customers, but they are also mindful of prematurely disrupting age-old processes that have effectively run their businesses for decades. They are also sensitive to the impact that any new business investment has on food and beverage margins that are already paper thin.

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Worries of Food and Beverage Executives

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“There are a number of things that food and beverage executives

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worry about when they think about e-commerce,” said Nabil Malouli, vice president and global e-commerce lead for the DHL supply chain. “The first worry is that revenue from e-commerce is uncertain.

At present, only 2 percent to 3 percent of grocery sales are online, so companies need to move carefully into the online space.

Second, the technology changes with e-commerce. Existing technology in the supply chain and other systems was set up for in-store operations, so there have to be adjustments.

Finally, there are the mind-sets of the executives themselves. Since

At present, only 2 percent to 3 percent of grocery sales are online, so companies need to move carefully into the online space.”

Nabil Malouli, vice president and global e-commerce lead, DHL

online sales revenue is still very small, there is a natural resistance toward investing too much too soon—yet everyone admits that online sales are the fastest-growing food and beverage channel.

You want to be in the online space because if you’re not, you risk not being competitive in the future— but you also want to measure your investments.”

Dealing with the inventory

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disparities between stores and distribution centers is an additional major challenge.

“These disparities that often exist between stores as well as distribution centers already make it difficult to accurately forecast demand and plan for replenishment,” said Pratik Soni, CEO at Omnichain, a supply chain solutions provider. “They also make it hard to align on important aspects of grocery e-commerce.

Questions start to come up, such as: Who is going to fulfill a customer’s order? The distribution center or a nearby store? Or, how do we account for online or mobile sales into demand forecasts?”

Bringing the Goods to Market

Consumers want their orders to arrive quickly and accurately to prevent spoilage.”

MJ_Prototype / iStock / Getty Images Plus

Pratik Soni, CEO, Omnichain

Nowhere are the challenges for online food and beverage ordering and fulfillment greater than in the supply chain itself.

“The logistics of delivering food from store to consumer, or from farm to table are significantly different than they are in in-store customer fulfillment,” said Malouli.

“Because you’re delivering to the end consumer directly, there is a very low margin for error, and you need to maintain high quality for the goods that you deliver. There are also significantly higher levels of returns with online ordering,

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COVER STORY

and you have to meet customer expectations on rapid order fulfillment. The latter is one reason why automation and robotics in warehouse operations are expanding. They help speed supply chain performance.”

Understanding What Customers Want Malouli says that the number one question food and beverage companies ask when they consider investing in logistics solutions for online shopping is what other companies are doing.

The second question is what customers really want.

“That’s why we do consumer market studies,” said Malouli, “We can show prospects and clients where the market is heading and what customers are asking for—and how we can make supply chain solutions like logistics work economically and profitably.”

Studies reveal that online food and beverage customers, especially

in the millennial segment, want convenience, choice and the privacy of eating at home. There are websites that help them cost-compare food and beverage deliveries from different stores, but overall, they don’t seem to mind paying extra for the convenience of having their food delivered.

“I often deliver to students in the U District (University of Washington), and it amazes me that students are willing to pay twice or three times more for food that they could buy at a store just blocks away,” said a Seattle friend who drives for Postmates.

“Consumers want their orders to arrive quickly and accurately to prevent spoilage,” said Soni. “If a grocery retailer is fulfilling orders directly from their stores, they need insight into which stores have every item in the customer’s order, as well as which one is the closest to their home.”

Not to be overlooked either is the segment of aging baby boomers and retirees who are happy to “eat in” with home delivery instead of having to drive to the market. Although they are likely to be more cost-conscious, they often are willing to pay a premium for home delivery.

That being said, there are still plenty of reasons to go to a supermarket—whether it is the social experience of shopping, of seeing and selecting your own food firsthand, of sampling new foods and beverages, or of enjoying the pleasant atmosphere of a place that has been well merchandised.

“This is an important fact for food and beverage companies to remember in their strategies,” said Malouli.

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Isuzu trucks offer fantastic maneuverability and visibility along with the ability to carry more cargo than a conventional truck with the same wheelbase.

Isuzu trucks are available in classes 3 thru 6, have GVWR ratings from 12,000 to 25,950 lbs., and offer both a diesel and a gas engine that is also CNG/LPG capable. Isuzu’s multiple wheelbases can accommodate any body from 10-30 feet to fit your specific business needs.

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continued

“There will always be a place for in-store shopping, even as online shopping expands.”

In other words, what companies have to deliver to their customers is an integrated omnichannel experience so that, to the customer, it doesn’t matter if he or she purchases or returns items online or instore. The treatment is consistent.

The customer never hears words like, “I’m sorry, we can’t process your return as you bought it from the online store.”

Best Practices

Mary Shacklett is the president of Transworld Data, a technology analytics, market research and consulting firm.

Prior to founding the company, she was vice president of product research and software development at Summit Information Systems.

Bringing all channels together to create a unified customer experience is one challenge food and beverage companies face—but so, too, is balancing demand forecasting and replenishment to minimize waste, since grocery stores in 2018 accounted for 10 percent of total U.S. food waste.

“The food and beverage business is perhaps the most challenging to balance supply with demand due to the perishable nature of food products,” said Soni.

“Most grocery retailers find themselves constantly in a reactive mode, which presents challenges in costs and waste.

Namely, grocery stores can’t sell items past their expiration date, so any excess product becomes considerable waste. On the other hand, under-project demand, and you have unhappy customers and lost sales. It is already challenging enough trying to forecast demand at the store level—e-commerce only brings a whole new dimension to the equation.”

So, what are the best actions for grocers to take right now with their e-commerce efforts? ❶ Research technology trends.

The industry already knows that more business will be conducted online, so the key is to be ready for it. “From my perspective, people

SDI Productions / iStock / Getty Images Plus

COVER STORY

What companies have to deliver to their customers is an integrated omnichannel experience so that, to the customer, it doesn’t matter if he or she purchases or returns items online or in-store.

should not be looking at today’s and beverage chains, the ultimate technology, but at what the techgoal might be to develop your own proprietary e-commerce systems nology is likely to be like in five or and processes because you have 10 years,” said Malouli. the internal expertise—but this ❷ Don’t be late to market. The takes time. While you are in the online segment of food and beverage sales is still very small, but that’s process, an outsource solution can enable you to meet your customer no excuse to wait. The first into the demands today. space, with the best processes and technology, will be best positioned ❺ Know your customer. Online to capture this market when it grocery sales could reach $100 explodes. billion by 2025. A survey conducted by marketing consultancy Valassis ❶ Integrate your systems. revealed that online shoppers like The tried and true processes that to save time (66 percent); enjoy support in-store retail shopping the larger selection of products won’t all work for e-commerce.

(66 percent); and find the online This is the time to revisit processes experience easier than shopping and systems to see if they can be in-store (65 percent)—but enhanced, or if they shoppers also miss the senneed to be ticketed Most grocery for replacement, sory experience of touching retailers find and smelling produce (64 ❹ Look for an themselves percent) and are uncomexperienced e-comconstantly in a merce partner. There fortable having someone reactive mode, are companies in else pick out their produce which presents the supply chain, in or other perishable items challenges (62 percent). logistics, in distriin costs While these are general bution and in online and statistics, every store has selling that already waste.” its brand to promote, and are heavily engaged the job of also understandin e-commerce. Even Pratik Soni, CEO, Omnichain if their experience is ing the uniqueness of its in other industries, customers. Understanding they know what who customers are, and e-commerce needs to accomplish. how they want their food and For small- and mid-sized companies, beverages delivered is central to being able to outsource portions retaining them in a highly competiof their e-commerce operations tive industry. can be the difference between That’s what e-commerce must succeeding—or not. For large food achieve.

PhanuwatNandee / iStock / Getty Images Plus

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HOW A SECOND GENERATION FAMILY IS LEVERAGING

AUTOMATION AND TECHNOLOGY IN A DEEP-FREEZE ENVIRONMENT INSIDE AUSTRIA

“The automated deep-freeze warehouse fits in perfectly with our operations and has contributed to making important processes more effective and economical. The decision to implement this project and the automated solution was the right one at the right time,” · Wolfgang Hochreiter, Managing Director at Hochreiter

Founded in 1958, Hochreiter Fleischwaren GmbH processes and markets food products from its headquarters in Bad Leonfelden, Austria.

The core processing circles around sausage and additional meat products for numerous food companies. Recent and steady growth had the company subsidiary Condeli, based in Reichenthal, looking to expand its operations.

The previous warehouse capacity was pushed to the limit, so the company soon looked for a new high bay warehouse for storing deep-frozen intermediate and finished

products. The company made an initial investment for a new 7,500m2 (80,729 sq. ft.) warehouse, and tapped SSI SCHAEFER for the design and implementation for operations and software technology.

As with any food product, the challenge was the special care and attention that comes with food logistics. As with any food application, one must instill high quality, freshness, hygiene standards and regulations, as well as be cost effective and energy efficient. This project in particular needed to meet several goals:

• Implement a high bay warehouse for frozen products with a link to production lines, • Increase warehouse and throughput capacities, • Reduce employee workload in a challenging environment, • Automate to reduce the potential for human error, • Ensure a continuous cold chain environment, • Fully automate processes from raw materials to staging for dispatch, • Provide an economical solution with high quality customer service.

Top Right: SSI SCHAEFER Exyz Pallet Crane Right: SSI Orbiter® Pallet Shuttle

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A Compact Deep Freeze Storage Warehouse with Short Storage Channels and an Automated System with Redundancy was the Answer The entire warehouse storage capacity of 4,743 pallets includes nine storage levels, while a two-aisle channel storage system allows up to 60 storage and 60 retrieval operations to occur simultaneously. The system consists of two SSI SCHAEFER Exyz storageretrieval machines with an SSI Orbiter® loadhandling device, a pallet conveying system and a rack structure. It also includes a platform for deep-freeze evaporators covering roughly 100m2 (1,076 sq. ft.), which is integrated into the high bay warehouse at a height of approximately 20m (65’). High-speed gates for the airlocks in the deep-freeze pre-zone and production areas, as well as the incoming and outgoing goods, areas are also included.

In the deep-freeze warehouse section for incoming goods, pallets are added to inventory at both ends.

Pallets are placed on a chain conveyor by a forklift and the barcode is scanned using a handheld scanner. This information transfers into WAMAS®, the warehouse management software solution. The data is then made available during operation. The pallet passes through a

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contour inspection and is subjected to a weight check. Defective pallets are transported to a “no read” section and sent back for rectification.

Once WAMAS calculates the optimal storage location, the SSI Orbiter collects the pallet at the transfer location.

It is then transported to the designated storage channel as it is combined with other pallets weighing up to a maximum 1,200kg (2,645 lbs). For retrieval, the pallet lifts out of the rack rail and transports to the storage-retrieval machine by the SSI Orbiter. The wireless and extremely efficient SSI Orbiter channel vehicle boasts a comprehensive range of safety features.

Furthermore, it is supplied with an energy saving rechargeable battery that recharges within seconds at the docking station. This feature provides a huge advantage in deepfreeze environments.

The retrieved pallets transport onto a buffer lane via a conveying section and prepared for collection by the forklift.

The challenge with this application was two-fold.

First, high-density pallet storage was needed.

Second, a high level of redundancy was a requirement. To achieve this, the usual single batch filing of channels within the channel storage system had to be taken into account since a mixture of different items in the channel had to be avoided. The best way to prevent partially

filled channels is to compare the number of pallets in the channel with the typical order structure—this operation is handled by WAMAS. The solution consists of a high bay warehouse with two-aisle bound SSI SCHAEFER Exyz storage and retrieval machines, which in combination with corresponding SSI Orbiter channel vehicles, ensure storage and retrieval of pallets.

The pallets are stored one behind the other— allowing the desired storage density and level of redundancy to be achieved.

The advantage of this solution lies in the prevention of partially filled channels, which results in higher warehouse occupancy under normal operating conditions. Furthermore, WAMAS evenly distributes items on both storage aisles.

Should one storage retrieval machine need maintenance or have downtime, goods can still be accessed from the other aisle, as pallets are stored and retrieved from the area between the storage aisles by both storageretrieval machines.

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BY TONY DONOFRIO

IMPROVING THE CUSTOMER EXPERIENCE WITH TMS A

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s consumers, our buying decisions are increasingly centered on logistics.

Nearly every product is a commodity these days—competition for customers is no longer won with product alone. Service has become the critical winning factor.

Already the norm for online retailers, such as Amazon.com, this trend is now seen with raw materials, parts and finished goods.

Additionally, mass customized products are now being treated as a commodity, with home delivered customized meals as a leading trend.

Personalized ingredient selection is now considered as the standard service that customers demand.

What makes this all possible are the tools that give customers continuous visibility into the movement of goods to their doors, such as advanced replenishment

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and transportation management systems (TMS). These integrate suppliers, manufacturers, and retailers using data intelligence to drive supply chain decision-making and ultimately help companies meet the changing demands of their customers.

Cost Management

For food suppliers, one advantage is to use tools to visualize multiple complex processes helping to identify inefficiencies in the supply chain, and then build strategies to eliminate bottlenecks and cost challenges. Shippers can use real-time

Steve Debenport / E+ / Getty Images

By successfully transferring to a centralized data and technology platform—you have a great deal to gain in supply chain efficiencies and customer engagement.

ra2studio / iStock / Getty Images Plus

FEATURE: TMS CUSTOMER EXPERIENCE

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continued

every level in the supply chain. As an example, food service companies that are still doing manual transportation management can generally save from 6 percent to 11 percent when they begin using a TMS. But the savings are a secondary metric. The primary benefit lies in the improvement of the customer experience, thanks to mass customization of service.

schedule, transportation managers don’t need to scramble to find cost-effective replacements. An automated system can provide a list of available options, capacities, costs and timelines, and trucks can be outfitted with GPS devices to improve predictability.

All of these efficiencies convert into better prices, faster turnarounds, less spoilage, and more reliable services for customers at

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fre pla ma exp

Mass Customization of Service

Smederevac / iStock / Getty Images Plus

operational reports to help uncover opportunities like potential late shipments, backhauls, minimized mile-routing strategies and missed opportunities to combine orders— all patterns that are difficult, if not impossible, to see without access to detailed metrics and analysis.

Companies can also factor the end-to-end supply chain into estimates of time and cost Food service of production and delivery companies that are of goods. For example, a still doing manual protein processor mantransportation ufacturer with 30 plants management can across the United States generally save (using advanced tools) from 6 percent could consider the location to 11 percent of growers, distributors when they and customers when estimating production tarbegin using gets, movement costs and a TMS. projected service levels to aggregate supply, self-dates, and customer orders to create efficiencies in logistics and margin.

A leaner workforce may also be possible. More streamlined transportation can mean fewer people are needed for loading, unloading, staging and more.

It also can cut down on wasted time. When trucks don’t arrive on

kupicoo / E+ / Getty Images

FEATURE: TMS

Mass customization of service in the perishable supply chain requires synchronized processing, supplier availability, and transportation movement to streamline complex execution, which is achievable when you use tools like TMS to segment and aggregate data to create multiple, customized delivery paths. Customers get exactly what they want—and they know when to expect it.

For example, point-of-purchase materials, such as in-store aisle displays, holiday specials and even refrigerated fixtures, used to be shipped in cross segment standardized packages containing everything a store might require at their particular site. However, stores

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package containing only what they need based on the store specific brand, planogram, or promotion reducing waste and weight shipped.

If you deliver what the customer needs and let people see in real time where their order is, you eliminate calls and free up critical resources to be deployed elsewhere. Additionally, a TMS effectively enables utilizing a delivery day and time verses a ship date range. This provides larger ship windows to optimize transportation and drive customer service reliability.

Sustainability

frequently do not use all of the display plans, signage or the all of the materials shipped. Today, the stores expect to receive a customized

Data technology can also help manufacturers measure and diminish the environmental impact of end-to-end supply chains, while saving money and keeping customer prices in check. Optimizing routes, delivering direct-to-store rather than to centralized warehouses, and also localizing production are all ways to reduce miles and emissions. Steps also can be taken

to reduce the size and weight of paper and packaging. Increasingly, buyers demand insights If you deliver what the that help them understand customer needs and let and minimize the envipeople see in real ronmental impact of the products they stock. A TMS time where their order is, can help you provide those you eliminate calls and free metrics, while aligning with up critical resources to be deployed elsewhere. your customer’s goals.

There are technology and process solutions for every kind of company and every challenge in the perishable supply chain. Legacy players once defined the space, but now newcomers offer more choices for finding a right-sized vendor. The key to success is being tech-ready.

Right now—once you find the right fit and are able to successfully transfer to a centralized data and technology platform—you have a great deal to gain.

Tony Donofrio is partner—supply chain practice for Argo Consulting. He has more than 30 years of supply chain experience and a reputation for taking on tough challenges, creating growth opportunities and outperforming the competition.

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Real-time farm to fork cold chain visibility Partnering to protect your customers and your brand.

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Temperature monitoring

Product movement traceability

24/7 monitoring and response

Analytics and insights

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Learn more or try a pilot. contact@controlant.com — controlant.com

Follow us @controlant on Twitter

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SECTOR REPORTS WAREHOUSING

BY MACKENNA MORALEZ

Food safety begins in the warehouse, and that means having a pest management program in place.

Dreamframer / iStock / Getty Images Plus

DETER PESTS WITH AN INTEGRATED STRATEGY I n 2018, there was a record number of food recalls, with over 380 products being pulled off the shelves. With recalls and outbreaks never seeming to cease, safety remains a major concern for consumers.

While it is companies’ intention to serve the consumer, they should also strive to protect them as well.

It is crucial that companies put consumers first as food safety evolves in the warehouse.

Prevention Is Critical

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Pest management is a major concern for warehouses, especially as companies start to build locations closer to city centers. Chelle Hartzer, technical services manager for Orkin, says that a majority of pest problems start outside. Determining entry points for pests and sealing them can be the first step to a mitigation plan.

“Looking for those entry ways and closing them is a great thing to do,” Hartzer says.

“I make it all sound very simple, but I understand how that can be a challenge—especially with dock doors opening and closing all the time. That’s why we have screens for dock doors and screens that can seal any openings. You can also make the outside a little less hospitable. Cutting down trees a lit-

» »

tle and trimming bushes. Any place where pests can find resting spots and food sources on the outside.

Cleaning up those spaces a little bit can push them out further.”

Sanitation also needs to be consistent throughout the warehouse. All living things need food,

water and shelter. By making the environment in the warehouse less welcoming, it will make it harder for pests to get in and obtain those resources.

“This is a partnership. There are plenty of things that a pest control provider can do and there’s also

» » » »

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SR: WAREHOUSING

continued

plenty of things that a sanitation person can do on the facility side,” she says.

The definition of a pest can vary, however. Hartzer explains it as something within the warehouse that is out of time and out of place.

In a recent poll by the Supply Chain Network, 28.6 percent of respondents said that ants Your and rats were the most employees commonly seen pests in are there their facility. Cockroaches every day, and flies followed behind they know what’s at 14.3 percent as well. going on in your “We don’t want insects facility—use in our food supply and we them to your don’t want rodents in our advantage.” warehouses, but there Chelle Hartzer, technical are things that we don’t services manager, Orkin consider to be pests. Look at birds, they are pretty and everyone likes them, but the minute that bird gets into your warehouse it is now considered a pest,” Hartzer says.

She adds that pest management can be as simple as using your eyes and looking out for pests, suggesting that employees be familiarized with pests that are common to the area so they know what to look for.

In addition, Hartzer advises that facilities use a pest mitigation log to track pest sightings. Those areas can then be quarantined to prevent further crossover into other areas of a facility. Meanwhile, it is important that everything gets inspected prior to being let into the logistics center.

“Your employees are there every day, they know what’s going on in your facility—use them to your advantage,” Hartzer advises.

richard johnson / iStock / Getty Images Plus

Know Your Pests

“We don’t want to just react when an incident happens, we want to be able to prevent it from happening altogether.”

Take a Proactive Approach It’s all about being proactive, not reactive. Hartzer stresses that a pest management plan is essential as consumers demand to know how their food is sourced, processed and delivered. For example, having a monitoring system in place can help detect how a pest gets into the facility before it spreads.

“It’s challenging when you think of the food industry. We as humans need that food, but so do other things. So, it’s not always possible for complete prevention. What is possible is preventing the problem from getting any worse when it does happen. Make sure you inspect incoming goods for contamination so they can be refused,” she says.

The Food Safety Modernization Act (FSMA), first signed into law in 2011, helped improve warehouse safety, despite food recalls being on the rise.

The law gives the FDA the power to mandate a recall when companies refuse to do it voluntarily.

The law also expands the agency’s ability to enforce preventative measures, such as having recall

plans in place in case of an event.

However, on the pest management side, when FSMA was first enacted, very little changed because the food and beverage industry always had higher standards when it came to safety.

“When FSMA came along from a pest management standpoint, not much really changed. The biggest change was documentation—we had to document a bit more when it came to our procedures. But we were already focusing on preventative strategies,” Hartzer says.

“We already had integrated pest management approach. We were looking at exclusion and detailed inspections to find issues. So, for many of our actual practices, it didn’t change much.”

Still, pest management plans will always be changing. When considering how large some of the food facilities are and how much is going in and out of it each day, it is essential to have an updated plan in place. Hartzer recommends to review pest mitigation plans on a yearly basis as some requirements may have changed.

“It is absolutely essential to have an integrated pest mitigation plan in place,” Hartzer says. “This is a partnership. Even when you hire a third-party partner, there’s still a lot going on if your facility has to shut down for a few days, then you lose your customers. It is important to have plans in place to keep your supply chain running.”

Daniil Dubov / iStock / Getty Images Plus

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SECTOR REPORTS SOFTWARE & TECHNOLOGY

BY DAVID LANDAU

HITTING THE TRIFECTA IN SUPPLY CHAIN SOFTWARE DEVELOPMENT “I

An application within a network, leveraging data from the ecosystem, is where the magic starts to happen.

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believe in the power of shared data and technology to build a better future.”

While it’s unlikely Microsoft co-founder Paul Allen had supply chain in mind when he said this, the statement resonates truer than ever in our industry. Shared data and technology have the power to propel supply chain performance to new levels.

If I were to start telling you the benefits of cloud technology, you would roll your eyes and maybe even be tempted to start clicking on ads! But let’s face it—the traditional benefits are table stakes now. It’s simply expected. Kind of like when we reached a certain level of maturity with the internet, smart entrepreneurs began using it as the basis for breaking paradigms (think Uber, Netflix and Instagram). Providers of

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supply chain technology now must think about more than just planning a load, optimizing a pick path or planning an inventory purchase.

Moving Beyond Commoditized Capabilities Supply chain execution is very established by now. We’re talking 30 years of transportation and warehousing software. Tendering a load, RF picking and scheduling appointments are basically the same regardless of what software you use. By now, most companies have exhausted the ‘5 percent to 10 percent savings’ every TMS and WMS vendor promises.

Applications in isolation do the best that they can, but an application within a network, leveraging data from the ecosystem—that’s

where the real magic starts to happen. Companies that adopt this software model of the future will make strides and leaps forward in managing their operations more efficiently.

You don’t want to take my word for it? How about Gartner, who last year, released the first-ever Multienterprise Supply Chain Business Networks (MESCBN) Magic Quadrant, evaluating such networks that “support a community of trading partners that need to coordinate and execute on business processes that extend across multiple enterprises.” A subsequent brief in May 2019 summarized that MESCBNs “are essential and chief supply chain officers need to incorporate them into their business plans.”

The conversation about supply chain software development can no longer start and stop with applications…or data, or a network.

Achieving best-in-class requires these components working together intelligently, and that is really where we believe supply chain tech is going to take our industry to a whole new level.

Operating in a Network As previously described, pur-

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pose-built applications for transportation and warehousing have long done their job very well—optimizing within the isolation of the business where contact with the

outside world is generally limited to 1:1 conversations. Can you take my load? How much? Where is it? By contrast, if that application is built to work within a network, compa-

nies gain easier access to services and other benefits. Collaboration with partners is easier. Access to carriers and increased capacity is faster by being part of a larger community and via digital freight marketplaces.

From a development perspective, applications that exist in a silo are fairly simple. Applications that participate in a network (or are the network) must be designed differently. API calls and web services must be available throughout the application to share or request data. Architects must think ahead of what can be done with information that may not exist natively within the application but is readily available in the extended network.

Producing and Harnessing Powerful Data Large networks have two primary benefits. First and foremost is the connectivity and collaboration described above. But beyond that,

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SR: SOFTWARE & TECHNOLOGY

continued

networks that manage transactional data also have a natural by-product: data. Tons of data.

Imagine tens of millions of loads and billions of dollars in freight spend moving through an application and network, and you’ve got massive amounts of data.

Used properly, that data is crunched with cutting-edge algorithms (insert your favorite buzz term here—artificial intelligence, machine or deep learning) in order to decipher where it has been and where it is going. When made available to the original applications, decisions can be driven by data. Choices can be made based on analysis and comparisons. Hence, another way in which the original application architecture must be reconsidered.

Take for example the scenario of meeting Walmart’s on-time, in-full (OTIF) policy, requiring suppliers to

deliver full truckloads within a twoare late 5 percent of the time. Howday window 87 percent of the time, ever, data-driven analysis shows to and 97.5 percent in-full for food and reduce that to 2 percent would cost beverage deliveries. The penalty of an extra $500,000 in freight spend.

3 percent of the cost of goods for This could be more than the penfailing to meet these requirements alty. Armed with this insight, I can is significant, consider all factors to particularly for decide if the increased Architects must an industry that costs are worth it (or think ahead of what operates in sinmaybe have an entirely can be done with gle-digit margins different conversation information that may with Walmart). to start.

Say a sup“There are relatively not exist natively plier is trying few ideas that you can within the application to increase do just by yourself.” but is readily its on-time That Paul Allen guy available in performance was pretty darn smart. by 3 percent to the extended We don’t live in a world stay above the of isolation. We are network. requirement. connected in more ways Multiple factors than we probably even could help to achieve this, not all realize. So why develop and deploy of which are available with a siloed applications when you can work in application alone. For instance, with connected harmony by using applimy current carriers, my shipments cations with networks and data?

LANDAU

David Landau is chief product officer at BluJay Solutions, leading product strategy and vision as well as overall direction of the full suite of solutions from concept to post-launch performance. He has more than 20 years of industry leadership experience.

,

www.foodlogistics.com

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9/3/19 3:21 PM

SECTOR REPORTS OCEANS & PORTS

BY JOHN MCCURRY

CARRIERS ADOPTING BLOCKCHAIN PLATFORM T TradeLens confirms the scope of the challenges the global shipping industry faces and provides transparent solutions.

radeLens, the blockchain-based solution announced last year by Maersk and IBM, continues to gather momentum. Today, data on more than half of the world’s ocean cargo is committed to the TradeLens platform and expected to be fully available by first quarter of 2020.

TradeLens is an open and neutral industry platform which uses the Hyperledger Fabric permissioned blockchain to guarantee the immutability and traceability of trade documents. The platform was built to bring together thousands of separate trading partners with a common approach to sharing information and documents securely and quickly, in line with Maersk’s vision to connect and simplify customers’ supply chains through seamless customer engagement and end-to-end offerings. Currently, the platform handles more than 10 million events and more than 100,000 documents every week.

Process Improvement Mission Rapid adoption of TradeLens across the global shipping supply chain continues. Hapag-Lloyd and Singapore-based Ocean Network Express (ONE) Pte. Ltd are among the recent participants to join TradeLens. Hapag-Lloyd and ONE,

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the world’s fifth- and sixth-largest carriers, respectively, join CMA CGM and MSC Mediterranean Shipping Company, both of which recently announced they are joining TradeLens. With these additions, the scope of the platform now extends to more than half of the world’s ocean container cargo.

Todd M. Smith, IBM’s vice president, global trade—blockchain, says the world’s training ecosystems need to be modernized. He notes that the process for transporting and trading goods remains costly, manual and paper based.

“The global shipping industry

moves more than $16 trillion worth of goods around the world and across borders annually,” Smith says. “Nearly 80 percent of the items consumers use daily are, at some point, shipped by container.

However, the associated paperwork and documentation needed to move cargo globally can be exchanged over 100 times for a single shipment. That’s hugely inefficient and is exactly the type of process we are on a mission to help the industry improve.”

Smith says TradeLens provides clearer views across trading partners and greater transparency

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SR: OCEANS & PORTS For many years, blockchain technology has been hailed as a potential core technology to create

trust and transparency

in global shipping and logistics.”

Michael White, head of TradeLens, Maersk

continued

and simplicity in the movement of goods. As a result, the technology is helping change how global trade is done. Participants in the TradeLens network are able to quickly pinpoint where their cargo is located and its state of availability. This reduces time for truckers and drayage drivers, reduces port and terminal congestion, minimizes customs and inspections delays, and ultimately shortens the lead time required for shipment delivery. Shippers, distributors and regulators can quickly access trusted and essential information via the blockchain, reducing the amount of paper documentation and improving costly and time-consuming operations, such as freight audit and invoice handling.

TradeLens confirms the scope of the challenges the global shipping industry faces, Smith says. For example, simple actions needed to understand container status can take hours or days to resolve.

The costs associated with managing the information in supply chains often exceeds the costs of actually moving goods. However, there’s also confirmation that the value exists. TradeLens is offering customers significant increases in shipment visibility, and this data will only improve as the ecosystem and platform evolve and grow.

“We continue to integrate more data to the platform in real time and direct from the source, mitigating the latency that often exists even in the fastest supply chains,” he says.

Expanding Partners and Digitization John McCurry is an Atlantabased writer specializing in logistics and manufacturing.

He is a former editor of Air Cargo World magazine.

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TradeLens is demonstrating that major carriers are ready, willing and even eager to get involved, according to Smith. They realize that digitization of their processes and workflows is a must. By working together, they can drive change. He says collaboration across the industry means that the TradeLens community now has the clout to tackle some of the industry’s trickiest challenges. For

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example, negotiable e-bills of lading sands of documents each week, is high on that list. “The benefits of providing shippers, carriers, freight TradeLens are seen by all who join forwarders, customs officials, port the ecosystem,” Smith says. “The authorities, inland transportation model we are building is designed providers and others a common specifically to benefit all parties view of transactions—and building no matter your role. The benefits trust in the process. themselves can and will differ by “Major carriers such as CMA need and where an organization and MSC have signed up for the sits in a supply chain. Shippers and platform to increase visibility of consignees generally engage with the end-to-end shipment milestones platform as a consumer of shipping which provide benefits for their information to improve their control existing customers, while finding tower operations and as a means to opportunities to optimize operimprove collaboration with supply ations and reduce overall costs,” chain partners with tasks such as White says. “This is made possible streamlining customs clearance.” by greater collaboration and seamFreight forwarders and 3PLs ben- less, secure sharing of real-time, actionable supply chain information efit similarly but put these benefits across all parties—encompassing to use for their broader customer shipping milestones, cargo details, base, he adds. Carriers, terminals sensor readings and more. Enabling and ports authorities contribute data and benefit from having access the digitization and automation of cross-organization business to easily share and consume with those Enabling the processes is integral to around them. digitization global trade. TradeLens— thanks to blockchain—helps “For many years, and blockchain technolautomation ensure all transactions, documents and data are ogy has been hailed of crosssecured and auditable.” as a potential core organization technology to create Hapag-Lloyd pursues a business trust and transparmulti-platform approach processes is to technology, according to ency in global shipping and logistics,” spokesman Andre Zimmerintegral to says Michael White, global trade. man. The company keeps head of TradeLens at a watchful eye on developMaersk. “With TradeLens, Maersk ments and the various technology has been taking a leading role in initiatives in the industry. As blockdigitizing global trade, and the level chain is concerned, Hapag-Lloyd of industry backing indicates that believes that this technology can be our solution has enormous potential an enabler to digitize the maritime to transform the shipping industry supply chain and increase interopas we know it.” erability across the industry.

White says for the shipping inHapag-Lloyd is also part of the dustry, blockchain is transformative new Global Shipping Business in that it is increasing trust in docuNetwork (GSBN), another blockments and information workflows— chain-based initiative. Zimmerman something the industry has lacked says Hapag-Lloyd believes that new entirely. What was only available to technologies such as blockchain offer the very top companies in the space opportunities which can be utilized is now available to the mid-market in close cooperation with customers as well, expanding the market to and suppliers as well as competinew players that previously faced tors. Using platforms like GSBN or high barriers to entry. With more TradeLens, Hapag-Lloyd is creating than 100 participants on the platnetworks in which information can, form today, TradeLens is already beside other benefits, be transmitted processing more than 10 million throughout the industry efficiently discrete shipping events and thouand with a low rate of error.

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FOOD (AND MORE) FOR THOUGHT

BY STEPHEN DOMBROSKI

EMBRACE NEW TECHNOLOGIES

DOMBROSKI

Stephen Dombroski is QAD’s senior manager for the consumer products and food and beverage vertical markets.

He has over 30 years experience in manufacturing and supply chain and has helped multiple companies in a number of industries to implement S&OP concepts and processes.

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anufacturers in automotive, high-tech and life sciences have made tremendous inroads with digitization and automation. The domestic food sector is starting to catch up, but worldwide, many food producers still rely on manual processes. The industry realizes that the food supply chain can benefit from Industry 4.0 technologies and is working on how to wisely apply them.

a product and quickly identify the source of food safety issues is not just a legal responsibility for food producers, but also a social and ethical obligation to their consumers. · Pressures to Improve Margins— Food manufacturing is historically a low margin business, so managing costs is a major priority. However, increasing transportation and inventory costs, combined with shorter product lifecycles, make this difficult.

Catalysts Driving the Need for Change

Benefits of Industry 4.0

Many factors are driving food manufacturers to embrace advanced technologies. The market is growing and there are many challenges, including the following major issues: · Increasing Consumer Demands—Consumer preferences have changed, and manufacturers now provide an infinite amount of product choices in new and evolving segments. Consumers dictate the path of the industry in ways ranging from price to quality to product specifications and customizations.

Consumers want healthier products that can be prepared quickly. · Expanding Value Chain—There are more venues than ever before for consumers to purchase food products. Because the market for online food buying will continue to grow, manufacturers need to ship more products to more places. Item location planning accuracy is critical to getting inventory where it needs to be and when. · Food Safety—The pressure to produce safe and quality food is increasing. Consumers want to know what they are eating, and governments are enforcing stricter rules.

The ability to track the life cycle of

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The global food supply chain currently is not agile enough to respond to the present needs of the marketplace. While low margins can limit investment in new technologies, the market is forcing manufacturers to innovate and evolve for survival.

All aspects of food production can benefit from advanced technologies.

For example, farmers are experimenting with sensors to monitor soil, pests and other environmental issues to assist in proper irrigation and fertilization, which improves crop yields, quality and minimize costs. These kinds of technologies can also be used to provide manufacturers, distributors and sellers

PrathanChorruangsak / iStock / Getty Images Plus

Get ahead of the issues today that are impacting the industry tomorrow with Industry 4.0 technologies to invigorate your business.

with important information that can help to streamline the supply chain and maximize manufacturing and distribution efficiencies.

Another promising Industry 4.0 technology is blockchain. Food and beverage products move through many touch points and are handled by many people, and blockchain can assist in the tracking of food origins.

How Do You Get There?

Implementing the solutions of Industry 4.0 will be easier if you have a clear vision of how to begin and if your processes and goals are aligned.

You need a plan, because your competitors already have one. Start with current systems. Ensure that they are as up to date as possible (latest release) and that they provide you with what you need now. · Align and partner—Associate with those who understand your business and the processes and tools that can be used to execute your strategy. · Evaluate current data sources— Make sure you know what data you need and find out how to get that data. · Integrate—Determine whether or not current equipment and data from existing systems and planned systems can be connected. · Start small—Rome was not built in a day, so start small to avoid missteps—but, start.

Advanced technologies can be intimidating, but they don’t have to be.

It can be an exciting journey. Getting ahead of the issues impacting the industry tomorrow now will invigorate your business. Most importantly, it will help you become the agile, effective enterprise that will succeed in the future.

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