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Food Logistics




Global Supply Chain Solutions for the Food and Beverage Industry




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The Ford F-650/F-750 is 45% quieter inside the cabin at idle than the previous generation* with reduced noise, vibration and harshness, improved suspension and refined cab craftsmanship. More reasons Ford Medium Duty trucks are the fastest-growing-volume medium-duty brand.** And the winner of Work Truck magazine’s Medium-Duty Truck of the Year award for two years running.

Vehicle shown with optional features and aftermarket equipment. *When equipped with the available 6.7L Power StrokeÂŽ V8 Turbo Diesel Engine. **Based on IHS Markit TIP Registrations for GVW 4-7 vehicles with sales over 1,000 units for CYTD Dec. 2016 vs. CYTD Dec. 2015.

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THE F-650/F-750 /// FORD.COM

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October 2017 ISSUE NO. 191 COLUMNS



The trucking industry must learn to navigate increased regulation and coming rate increases.


The Constant Evolution of Foodservice



Regardless of where in the foodservice supply chain you reside, adapting to constant change is critical.




 rozen Consolidation F Gains Popularity in Evolving Retail World

H  ow the Right Carrier Can Help Boost Business

W  hy Food Traceability Continues To Grow In Importance





T  MS in the Changing World of Food & Beverage

Choosing the right TMS takes some work, but it can make all the difference.

Supply Scan 10 Food on the Move 40 Ad Index WEB EXCLUSIVES • How to Combat Drowsy Driving 12365735


Data collected via lift truck telematics is creating a safer, more efficient warehouse.


Consumers and industry alike see the benefits of improved food traceability.


T  he Data-driven Lift Truck


The right transportation provider is essential to an efficient supply chain and brand protection.

Frozen foods shippers look to order consolidation as the market grows and order sizes shrink.


C  ontrolled Atmospheres Enable Fresh Produce to Reach Distant and New Customers

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


T  ruck Capacity Continues to Shrivel




C  old Chain Ports Remain Hot

Niche ports for perishable foods are investing in a changing market that keeps their services fresh and operations efficient.

• Case Study: Leading the Spanish Wine and Juice Market with Order Processing Automation

• 4 Ways Propane Autogas Vehicles Add Value for Urban Delivery Fleets

Published and copyrighted 2017 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher. Food Logistics (USPS 015-667; ISSN 1094-7450 print; ISSN 1930-7527 online) is published 10 times per year in January/February, March, April, May, June, July, August, September, October and November/December by AC Business Media Inc., 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices. POSTMASTER: Send address changes to Food Logistics, P.O. Box 3605, Northbrook, IL 60065-3605. Canada Post PM40612608. Return undeliverable Canadian addresses to: Food Logistics, Station A, P. O. Box 25542, London, ON N6C 6B2. Subscriptions: U.S., one year, $45; two years, $85; Canada & Mexico, one year, $65; two years, $120; international, one year, $95; two years, $180. All subscriptions must be paid in U.S. funds, drawn from a U.S. bank. Printed in the USA.



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Located at the heart of Florida’s largest and fastest growing consumer market The Tampa Bay/Orlando I-4 corridor region is home to the largest and fastest growing concentration of distribution centers in the State. The region is also located at the heart of Florida’s agriculture industry, and is home to the State’s largest cluster for the grocery/food and beverage sector. • 135,000 square foot state-of-the-art facility • 6,348 racked pallet positions using Interroll gravity fed rack system • On-site dedicated temperature controlled fumigation services • Safe, food-grade glycol refrigerant used throughout • USDA approved for cold treatment services • 106 reefer plugs 1101 CHANNELSIDE DRIVE, TAMPA, FLORIDA 33602

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n September, I was invited to join a supply chain panel at the KINEXO Summit. It was a great learning experience and a meaty exchange of ideas and information. Jonathan Starks, chief operating SOWINSKI officer at transportation intelligence firm FTR, kicked off the summit with an overview of the trucking market. The prevailing message was the continued tightening of capacity, which he FOR EVERY said would only get worse in the coming months. In turn, IN trucking rates are AVERAGE SPEED steadily climbing. Currently, rates in YOU NEED TO the spot market are up 20 percent NEARLY year-over-year. Contract rates haven’t experienced that kind of spike, but they will likely rise 5 percent in the next year. At the same IN THE SYSTEM time, myriad pressures in the TO MOVE THE SAME AMOUNT trucking industry are colluding to OF FREIGHT impact capacity, said Starks. The hours-of-service regulation is negatively affecting capacity, while the pending implementation of the electronic logging device mandate is having an even more pronounced effect, he said. Secondly, the implementation of the Federal Motor Carrier Safety Administration’s national clearinghouse of truck driver drug and alcohol violations in January 2020 will amplify constraints. Simply put, regulations are generating headwinds. Lower productivity due to the proliferation of







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regulations means more equipment is needed to move the same amount of freight. Recruiting drivers is also harder in this environment. The driver pool is shrinking while driver pay and incentives are drying up as well. More regulations also create barriers to entry, especially for owner-operators. The nation’s maxed-out infrastructure coupled with growing congestion is also putting the squeeze on capacity, Starks pointed out. This caught my attention: For every 1 mph drop in average speed, you need to add nearly 70,000 more trucks in the system to move the same amount of freight, he said. Can the industry get busy and hire enough drivers to mitigate the impact on capacity from all these pressures? Probably not, said Starks. The forecast for truck capacity is bleak, and shippers of temperature-controlled freight are facing even tighter constraints. Why? More goods are now being shipped in refrigerated trailers—pharmaceuticals, aerosols, electronics, paint, and health and beauty products—and it’s eating up refrigerated capacity at a faster clip. Meanwhile, the perishable foods segment continues to grow as consumers seek out fresher food and more convenience foods. When growth in e-commerce is factored in, refrigerated capacity really starts to dry up. Shippers have to figure out ways to mitigate the current and coming rate increases, emphasized Stark. Great advice. Enjoy the read.

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

WWW.FOODLOGISTICS.COM PRINT AND DIGITAL STAFF Group Publisher Jolene Gulley Associate Publisher Judy Welp Editorial Director Lara L. Sowinski Editor John Yuva Assistant Editor Amy Wunderlin Senior Production Manager Cindy Rusch Creative Director Kirsten Wiskus Audience Development Director Wendy Chady Audience Development Manager Angela Kelty ADVERTISING SALES (800) 538-5544 Associate Publisher (East Coast) Judy Welp (480) 821-1093 Sales Manager (Midwest and West Coast) Carrie Konopacki (920) 542-1236 National Automotive Sales Tom Lutzke (630) 484-8040, EDITORIAL ADVISORY BOARD Jaymie Forrest, Chief Supply Chain and Commercial Officer, ScanTech Sciences 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 LIST RENTAL Elizabeth Jackson, Merit Direct LLC (847) 492-1350, ext. 18; Fax: (847) 492-0085 REPRINT SERVICES Carrie Konopacki (920) 542-1236 Fax: (920) 542-1133 AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich CFO JoAnn Breuchel Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas Published and copyrighted 2017 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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Intelligent Automation Makes the Difference Automation solutions from SICK help you meet increasing demands for food and beverage supply chain improvements. Our broad portfolio of sensors, automatic identification systems and safety solutions are flexible, scalable and help make your operations more intelligent. Implementing automation solutions from SICK can reduce supply chain costs, improve transparency, and enhance food and beverage distribution processes. You’ll find SICK transforming logistics operations in all supply chains...from retail, to parcel, and food and beverage - for 70 years and counting. SICK is a global solutions provider located in your corner of the world. From cold storage, sortation, order fulfillment, packaging and palletizing, you’ll improve food distribution through our flexible and cost-effective automation solutions. We think that’s intelligent.

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Americold, a global leader in temperature-controlled warehousing and logistics in the food industry, recently broke ground on a new facility in Middleborough, Massachusetts, for its long-time partner Ocean Spray. The facility will support Ocean Spray’s production requirements for its northeast harvesting operations, specifically for Craisins® dried cranberries. As demand for the company’s array of unique, healthy products has continued to grow globally, so has the need for frozen storage and refrigeration. This new facility, adjacent to Ocean Spray’s production facility in Middleborough, now will become a key component of the distribution process for Craisins. The new facility will offer 173,000 square feet of bulk storage, with three rooms operating at 0 degree Fahrenheit to maintain cranberry integrity from harvest to production. Design considerations took into account the high volume of incoming cranberry loads at harvest time, and freezing those cranberries to Ocean Spray’s high standards, which ensure taste, color and health benefits. “The strength of our partnership comes from Americold’s commitment to understanding our unique needs as the global leader in cranberry products,” says Mike Stamatakos, senior vice president of global operations for Ocean Spray.



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Seegrid, a leader in connected self-driving vehicles for materials handling, has expanded its suite of automated solutions with the announcement of the GP8 Series 6 self-driving pallet truck. Further enhancing the Seegrid Smart Platform, which combines flexible and reliable infrastructure-free vision guided vehicles with fleet management and enterprise intelligence data, the GP8 Series 6 offers fully automated material movement to execute hands-free load exchange from pick-up to drop-off. “The GP8 Series 6 closes the automation loop by providing an end-to-end solution, removing the need for human assistance to complete tasks,” says Jeff Christensen, vice president of product with Seegrid. “In manufacturing and e-commerce environments, every human touch is costly and unpredictable. As we help our customers develop smart factories of the future, safety, efficiency and operating costs will continue to be the driving forces behind the adoption of automation.”

Mars Food is opening a new North American headquarters in Chicago’s Goose Island neighborhood, according to the Chicago Tribune. Mars Food, a business unit of Mars Inc., previously based its North American business in Los Angeles. The new 20,000-square-foot office, will house 75 employees, half of whom have been hired locally. Caroline Sherman, vice president of corporate affairs for Mars Food North America, tells the Chicago Tribune, that moving its headquarters to Chicago “enables our longterm growth ambitions by bringing us closer to our factories, our customers and other parts of our business.” Mars Food, a smaller segment of the Mars’ business relative to pet care products and chocolate, includes a $1 billion brand in Uncle Ben’s, and smaller brands such as Seeds of Change and Suzi Wan.


Post Holdings, the maker of Honey Bunches of Oats and Grape-Nuts cereals, will buy Bob Evans Farms for about $1.5 billion, adding vegetable-based side dishes and breakfast sausages to its portfolio. The deal comes months after Post agreed to buy British breakfast cereal brand Weetabix for 1.4 billion pounds ($1.8 billion). Bob Evans sells frozen foods, such as refrigerated potato, pasta and pork sausages, under Bob Evans, Owens, Country Creek and Pineland Farms brands. The company also has a foodservice business, representing about 35 percent of sales volume.

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Hy-Vee Inc. is planning to build a large distribution center on 150 acres in southern Minnesota. It’s the first center outside of Iowa for the West Des Moinesbased grocery company. The facility would be at least 1 million square feet and located along Interstate Highway 90 on the western edge of Austin, a city of about 25,000 people and home to Hormel Foods. Hy-Vee said it would build the distribution center in phases. The company does not own the land yet, but it anticipates construction could begin in 2019. The Midwestern grocery chain currently has two distribution centers, both in Iowa. The Chariton warehouse has more than 1 million square feet, and the center in Cherokee has about 650,000 square feet. The company also is expanding its Perishable Distributors of Iowa food production center in Ankeny to 700,000 square feet.

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Toyota Material Handling U.S.A. (TMHU), commemorated the 50th anniversary of the first Toyota forklift sold in the United States with a special event for dealers, associates, dignitaries and media at its U.S. forklift headquarters in Columbus, Indiana. The company, which holds the title as the No. 1 forklift in North America, sold its first U.S. forklift to a grape farmer in Fresno, California, in 1967. Fifty years later, Toyota proudly displays that forklift at its Columbus campus as a reminder to visitors of the brand’s quality and longevity. To mark the golden anniversary, Toyota associates custom-designed, engineered and built a gold-painted forklift, which was unveiled at the milestone ceremony on Aug. 30. Additionally, Toyota will plant 50 cherry blossom trees on its Columbus campus and donate 50 more cherry blossom trees to the city of Columbus. Cherry blossom trees are the national flower of Japan, home of TMHU’s parent company, Toyota Industries Corporation (TICO). In addition to the trees, Toyota presented the Columbus Department of Parks and Recreation with 50 youth scholarships for those in need. “Fifty years represents a golden achievement in the U.S., and today we honored the associates, the dealers, our suppliers and the community who supported TMHU’s journey to this major milestone,” said Brett Wood, president and CEO of Toyota Material Handling North America. “This ceremony underscored our legacy here in the U.S., but it was also designed to give a glimpse into the future of Toyota Forklifts’ ongoing leadership and growth in the rapidly changing material handling and logistics industry.” Indiana’s Secretary of Commerce, Jim Schillinger, addressed the crowd at the 50th anniversary ceremony and recognized TMHU for its sizable impact on Indiana’s economy. Columbus Mayor James Lienhoop also spoke and noted how Toyota Forklifts not only lifts the Columbus economy, but also lifts our country’s material handling industry. The event wrapped up with a keynote address from legendary Indiana basketball coach Bobby Knight.




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Albertsons Cos Inc., one of America’s biggest supermarket chains, has purchased meal-kit delivery service Plated, as it looks to attract more customers to its stores amid increased competition. Albertsons’ expansion into meal kits, which deliver fresh ingredients and recipes to subscribers, comes less than a month after Amazon’s entry into the grocery market with its acquisition of Whole Foods Market. Amazon’s entry is expected to increase pricing pressure on retailers. The Albertsons-Plated deal also comes a few months after Blue Apron Holdings became the first U.S. meal-kit company to go public and as more and more food companies take an interest in the meal-kit delivery industry. Nestle led a $77 million investment round in meal-kit company Freshly in June, while Unilever Plc’s venture capital arm led a $9.2 million investment in organic meal delivery service Sun Basket in May.

The Utility Side Skirt by Utility Trailer Manufacturing Company, a leading manufacturer of refrigerated trailers, dry freight vans, flatbeds and Tautliner® curtainsided trailers, has earned preliminary approval from the Environmental Protection Agency (EPA) for use as an aerodynamic device on dry van and refrigerated trailers in order to meet Greenhouse Gas-Phase 2 (GHG2) regulations. The Utility Side Skirt qualifies at the GHG2 BIN III Level, which is a standard that exceeds the EPA’s current SmartWay requirements. It also exceeds current California Air Resources Board (CARB) requirements. The EPA and the National Highway Traffic Safety Administration Phase 2 Heavy-Duty rules are the latest regulations put in place to further reduce greenhouse (GHG) emissions and fuel consumption for medium-duty and heavy-duty vehicles, including trailers that are used in combination with tractors.


What We Can Learn from Harvey and Irma By Mark Montague Mark Montague is an industry rate analyst for DAT Solutions, which operates the DAT network of load boards and RateView rate-analysis tool. He has applied his expertise to logistics, rates and routing for more than 30 years. Mark is based in Portland, Oregon. For information, visit


Hurricanes Harvey and Irma were devastating in their own ways, but their impact on freight followed a typical threestage pattern. Before the storm, forecasts gave shippers time to plan. Outbound rates increased, but goods were rerouted, stockpiled and saved from spoilage. During the storm, nothing moved until power, roads, rails and other infrastructure were deemed safe. After the storm, emergency supplies came first, followed by van and reefer freight, and then flatbeds with equipment and materials for cleanup and rebuilding. One thing that distinguished Harvey from Irma is the significance of Houston to the national freight economy. Distribution centers near Houston serve at least six states; after Harvey, some shippers began to supply markets ordinarily served by Houston from hubs in the Southeast, including Atlanta, Charlotte and Memphis. Warehouses in the Midwest were called on to supply the Northeast in order to compensate for freight that otherwise would have come from Atlanta. Many of those warehouses had to supply Colorado and


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other out-of-the-way markets ordinarily served by Houston. It’s telling that on Aug. 30, when Harvey made its final landfall, the worst truck shortage according to our DAT Hot Market Maps was in Grand Rapids, Michigan. That’s because trucks were being diverted to deliver emergency relief to staging areas like San Antonio and Dallas, leaving

shippers in the Midwest scrambling for trucks to move apples, potatoes and other seasonal freight. The storms tested supply chains, but also showed what a resourceful industry we can be. Many offered equipment and warehousing to organizations like the American Logistics Aid Network.The help is greatly appreciated as the cleanup continues.





2016 2015

9 6 3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec National average load-to-truck ratios for reefers from 2015 to the present. Copyright 2017 DAT Solutions

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A cargo van that turns heads. A lease that turns profits. Whether you’re bringing fresh ingredients to local restaurants or delivering furniture, you need a cargo van you can depend on. And when you lease a Kenworth T270, you’re getting all the benefits of The World’s Best truck without the capital cost. Equipped with a powerful PACCAR PX-7 engine, automatic transmission and a 26' Morgan van body rated at 26,000 lbs GVW, you can confidently haul more for less. The World’s Best delivers. ®

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Global shipping consultancy Drewry has launched a new, dedicated Reefer Benchmarking Club to meet the growing concerns of shippers about rising freight rates and reduced service levels at a time of carrier consolidation. Mirroring the success of Drewry’s benchmarking club service for dry containers, which now generates over 700,000 data points each month, the new Reefer Benchmarking Club will similarly operate as a closed user group with full anonymity and confidentiality. Club members will receive detailed, bespoke reports that benchmark the different elements of their ocean spend and carrier service performance, enabling them to reduce costs and improve their competitiveness. The relevance of this new initiative is highlighted by recent increases in reefer freight rates, illustrating that reefer shippers are suffering more than others. Reefer shippers are particularly sensitive to shipment delays or service disruptions because of the perishability of their cargo.


The U.S. Food & Drug Administration (FDA) is offering a one-hour training module, free of charge, to help carriers meet the requirements of the Food Safety Modernization Act’s (FSMA) Sanitary Transportation of Human and Animal Food Rule (Sanitary Transportation Rule). The Sanitary Transportation Rule requires rail and motor vehicle carriers to provide food safety training to personnel engaged in transportation operations. This requirement applies when the carrier and shipper have agreed in a written contract that the carrier is responsible, in whole or in part, for the sanitary conditions during transportation. Such carriers are required to establish and maintain records documenting the training of operations personnel. The online course is designed to provide basic food safety training and does not describe specific operating procedures and practices, but is intended to complement industry best practices. Carriers also can give their own training or use a third-party.

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PhilaPort handled 667,069 metric tons of cargo in August, achieving its highest ever monthly total. The Port of Philadelphia also broke new records for monthly container throughput, moving 54,185 TEUs or twenty-foot equivalent units, and forest products, which reached 109,604 metric tons last month. PhilaPort CEO Jeff Theobald credited the Port’s highly productive labor force, the marine terminal operators, and an improved perception of the Port for the increased tonnage. “As we continue to upgrade our infrastructure and improve our systems, the word is getting out. That’s why shippers are choosing PhilaPort as their preferred port,” he says. The previous record for total monthly tonnage was reached in May 2017, when 625,935 metric tons were handled.

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lobal demand for fresh fruits and vegetables is expanding as a result of consumer interest in healthy, fresh produce, as well as an increased appetite for crops from KERBEL distant growing regions, supported in part by rising affluence in emerging economies. How these products get from point of origin to their final destinations varies based on the time sensitivity of each commodity. The key to extending the transit life of perishables, beyond what refrigeration alone can do, is to minimize produce respiration. During respiration, fresh produce consumes oxygen (O2) and emits carbon dioxide (CO2), which causes the produce to ripen too quickly. This can be overcome by using “controlled atmosphere” techniques, which change the composition of air both inside a refrigerated space and around the cargo. With controlled atmosphere systems, sensors measure CO2 and O2 intermittently and adjust to pre-determined levels through fresh air intake and removal of excess CO2. In cases of highly sensitive and low respiring produce, Eduardo Kerbel sometimes an injection of nitrogen joined Carrier Transi- is needed to bring the gas levels cold Global Container into proper balance. Refrigeration in 2015, building on a 29-year Pressing Pause career focused on Controlled atmosphere technolpostharvest business ogy can effectively minimize the practices for private in- respiratory activity of perishables. dustry and government. Lower respiration helps maintain Today, he works closely the freshness and quality of the with companies to help product and can also delay decay, them advance their loss of texture, ripening, aging, success in transporting dehydration, weight loss and loss of perishable goods from nutrients. Controlled atmospheres farm to consumers also can reduce chilling injury by everywhere. allowing transport at slightly lower



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temperatures, which in turn helps maintain quality even longer. As a supplement to good temperature control, controlled atmosphere technology can potentially add days or even weeks to transit shelf life. This allows produce to travel longer distances, enabling delivery of a greater variety of produce to consumers around the world. Another component that should be controlled is ethylene, a hormone produced by all fresh produce that can accelerate decay, aging and ripening in the confined space of a refrigerated container. In addition to lowering respiration, a controlled atmosphere system should remove ethylene in an active way to avoid its harmful effects. Carrier Transicold’s XtendFRESH™ system is an example of technology that can monitor and control O2 and CO2 and remove ethylene. The XtendFRESH system does not require external ethylene filters or disposable scrubbing material, which distinguishes it from other systems. Controlled atmosphere technology can considerably increase the transit life of many fruit and vegetable cargoes by slowing down their metabolic rate without affecting eating quality and nutritional composition balance.

Handle with Care Although controlled atmosphere is excellent for transit life extension, it can only realize its full potential when the commodity is harvested at the right age and

optimum maturity, precooled properly and quickly, handled correctly, packed properly, processed under sanitary conditions, transported at the recommended temperature and atmospheric composition for each commodity, and cold chain compliance is maintained. Existing, affordable controlled atmosphere systems are based on creating the correct atmosphere through product respiration. Establishing the desired levels of O2 and CO2 in a timely manner after closing the container is highly dependent on how fast the commodity respires and the potential leak rate of the container. Success depends on the type of commodity being shipped and using an air-tight container. An XtendFRESH type of controlled atmosphere system works best for high-respiring commodities, like bananas, avocados, mangos, asparagus, snap beans and raspberries. Some commodities that are low-respiring, such as grapes, blueberries, cherries, apples, peaches, papaya, kiwi and cantaloupe, require lower O2 or higher CO2 than may be possible to achieve with the standard technology. For them, it may be necessary to inject nitrogen or CO2 into the container prior to departure to establish the desired levels. Designing the right controlled atmosphere protocol and using the proper controlled atmosphere system will help extend transit life potential of fresh produce. This also can help to reduce quality claims, while ensuring arrival of products in top condition to more distant consumer destinations.

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FOODSERVICE Regardless of where in the foodservice supply chain you reside, adapting to constant change is critical.




ew industries have been as influenced by changes, especially in the last decade, many of the challenges revolve as the foodservice industry. Driven around consumer demand, as most by consumer demand, continuous customers prefer fresh, high-qualreleases of new technology, and the ity food, as well as menus that will ability to deliver products faster and adapt to their changing tastes. more efficiently than ever before, “They also prioritize sustainable, the foodservice indushumane food sources and try has, in reality, had no Restaurants want assurances of protection choice but to evolve—as from food-borne illness,” Mican’t afford consistently and succhalski says. “And they expect to drop their cessfully as possible. transparency in nutritional prices and Of course, the compete more and allergen information. changes have not effectively with Restaurant chains, along with occurred without retail options their supply chain partners, a fair share of chalbecause are committed to meeting lenges arising as well. of rising those needs.” Although they are Although restaurant chains labor quite wide ranging, the are dedicated to improving costs.” customers’ experiences challenges can still be Joe Tracy, overcome, particularly and ensuring their requests CEO, Dot Foods through data access, are met, they must also technological applicaface another daunting fact: tions and highly talented individrestaurant traffic has been weak for uals. In doing so, the industry is nearly two years, according to Joe preparing for better automation, Tracy, CEO of Dot Foods. After all, improved productivity and potenthe gap between paying to eat out tial, and long-term growth. versus eating at home has never been bigger. Overcoming But what is the primary cause? Challenges in an Ever- Tracy believes the increasing price changing Industry gap is largely due to government Without question, the foodserregulations—supply chain changes vice industry has encountered a resulting from the Food Safety wide array of challenges in recent Modernization Act (FSMA), as well years—from competition for cusas increases in minimum wages, tomers to menu item variety. with half the country implementing According to Bill Michalski, chief higher minimum wages than the solutions officer for Arrow Stream, federal law requires.

“Restaurants can’t afford to drop their prices and compete more effectively with retail options because of rising labor costs,” Tracy states. “In addition, it is more and more difficult to find labor and staff for restaurants, as well as distribution centers.” At distribution centers, driver shortages cannot be overstressed. Regardless of the potential to earn $63,000 per year, on average, people are simply not interested in driving and unloading groceries. Some don’t have a personality and temperament that is customer-centric, while others would rather not complete the tests necessary for a commercial driver’s license (CDL). As a result, the workforce is generally older and is not being replaced often enough by young talent. “Food service distribution is not well-known. We need to raise our profile and make the industry more attractive,” says Mark Allen, president and CEO of the International Foodservice Distributors Association (IFDA). “It’s a wonderful environment to work in for


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the right type of people.” Of equal importance, Allen also stresses that, although the environment has improved drastically, many regulations were passed between 2008 and 2016, leading to high compliance costs. Another issue is comprehensive tax reform, with typical distributors paying a 38-percent effective tax rate (their rate after deductions). “We would like to see Congress tackle this issue and bring down taxes for the industry,” he adds. As evidenced by customers’ ever-changing tastes and demands, restaurant traffic, government regulations, increases in minimum wage and a high effective tax rate, the foodservice industry is poised for even more change. To succeed amid constant changes, distributors must stay ahead of the trends that are influencing the industry, while also offering their customers solutions to successfully meet the trends head-on,

according to Stacie Sopinka, vice president of product development and innovation, US Foods. “Rather than being focused solely on operational efficiency, today, modern-day foodservice must win through actionable insights and innovation,” she stresses.

Technology, Data and Talent: A Foundational Trio for Success With this in mind, technology, along with data access, is foundational to foodservice companies’ success. Not only must they have immediate, accessible visibility into what’s occurring in their supply chains, but they must also know what’s happening in real time, so that they can respond to issues more quickly, predict what they will be doing and respond accordingly— with more precision. “Visibility means more today than it did five years ago,” Michalski explains. “Today’s supply chain personnel don’t just want access to data. They want the insights that come with it. “Technology should proactively tell companies where to look in their supply chains, alerting them without any prompting to the specific opportunities and threats that should have their attention.” For instance, foodservice organizations can receive automatic alerts if distribution inventory on a key ingredient, particularly for a limited time offer, is not sufficient enough to meet anticipated demand. Or they can be informed of pricing discrepancies across systems, thereby avoiding thousands of incorrect invoices. They can even be notified

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immediately if a variety of product quality issues are revealing trends that may negatively influence customers’ experiences sooner, rather than later. “Restaurants don’t have many people managing their supply chains,” he explains. “If these people are spending time tracking down inventory levels, they’re not spending time performing other critical responsibilities.” Technology and data access is the answer to these issues and more. And although foodservice’s supply chain visibility is incomparable to retail, for example, it is changing—to the point in which forms of data collection like GS1 are gaining momentum. “Within the next three to five years, the industry will transition more in that direction,” Michalski says. “You are starting to see technologies that excel at spanning the restaurant supply chain, leveraging a network of data from chains, distributors and suppliers to help them operate as if they are a single company.” Aside from technology and data access, foodservice companies must also focus extensively on talent. As the industry strives to recruit younger professionals—in 48 of 50 states, people under the age of 21 can only use their CDL to drive intrastate—it is currently developing an apprentice program that will provide people under the age of 21 a better pathway to driving as a profession. The program will last over a year, thereby requiring the apprentices to spend time with experienced drivers prior to driving alongside them. Upon doing so, they will then

 The foodservice industry must have real-time visibility into their supply chain, so they can respond to issues more quickly.

Today’s supply chain personnel don’t just want access to data.

They want the insights that come with it.” Bill Michalski, chief solutions officer, Arrow Stream



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COVER STORY I feel positive about our prospects for the future, as food away from home

will continue to thrive.” Mark Allen, president and CEO, IFDA


drive within 150 miles of their start locations. “It won’t be a quick fix, but it’s something we’re working on as an industry to help increase the pool of available drivers,” says Allen. “It will help anybody in the trucking industry become more excited about it and the profession as a whole.” Matthew Granlund, vice president of operations for Merchants Foodservice, adds that, although “the well in foodservice is only so deep,” the hiring of corporate driver recruiters is yet another method being used to attract more prospective employees. “Aside from recruiters, foodservice distributors should also consider offering sign-on bonuses, as well as pay plan increases,” Granlund says. “Each of these may be necessary to recruit—and retain— future drivers.”

A Bright Future Chris Lewis is the owner of Innovative Written Solutions, a content development and editorial services company. He has written for a variety of organizations, as well as industries like engineering, higher education and workforce solutions. He can be reached at lewis. christopherm@


Due to the growth of meal kit companies and “grocerants” in retail, Dot Foods’ Tracy believes the foodservice industry has become more fragmented and, in turn, is currently only increasing by roughly 1 to 2 percent. Of equal importance, millennials—the same age group that is not showing an interest in foodservice-related jobs—are changing the way food is consumed, yet another cause of the industry’s evolution. “They prefer to eat numerous small meals per day, care deeply about what is in their food, and more often than not, prefer to eat


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at home,” Tracy explains. “We are all trying to adjust to secure our piece of the pie.” Regardless of Tracy’s growth estimates, Allen thinks the industry has a bright future, as independent operators continue to thrive, while new restaurant concepts are also being revealed to the public regularly. “How can we (within the industry) do a better job to ensure consumers receive their food in the environment in which they want to consume it, whether it’s delivery, take out or other options? Primarily, we need to continue to evolve the way we serve consumers within their homes,” he says. “I feel positive about our prospects for the future, as food away from home will continue to thrive.” Ted Gundersen, project manager for Nicholas and Co., agrees with Allen’s sentiment, adding that food safety is vital as well. “With a rapidly growing industry, foodservice is outpacing retail in different segments,” he states. “As this occurs, we need to focus on constantly evaluating food safety— from A to Z.” He continues, “What does your quality management program look

like? Does it cover all the aspects of your operation—from suppliers/manufacturers to customers/ end users? Foodservice organizations need to evaluate what protection they have in place from start to finish.” Additionally, companies must focus on the well-being of their employees and take advantage of the new automation and technologies that either are available in warehouses or will be in the coming months and years. Labor on trucks, after all, is necessary, but in warehouses, machines are working well alongside humans, while distributors are becoming more and more comfortable with analytics that can better serve their customers and improve their employees’ health. “The typical foodservice driver ages out of the profession in their late 40s or early 50s,” Allen concludes. “Through technology, we can make the physical part of their jobs easier so that their careers can be extended beyond the physical limitations that exist today.”  Millennials are not showing an interest in foodservice-related jobs, but are changing the way food is consumed—a significant trend in the industry’s evolution.

10/3/17 11:37 AM

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FROZEN CONSOLIDATION GAINS POPULARITY IN EVOLVING RETAIL WORLD Frozen food shippers look to order consolidation as the market grows and order sizes shrink.


he world of frozen food shipping has shifted significantly over the last few years, as many frozen food companies look to inventory consolidation to help gain an advantage in a growing but changing market. A study by Grand View Research estimates that the frozen food market will reach $72.98 billion by 2024, and yet, while the market for

frozen foods is growing, order sizes aren’t. There are many contributing factors to this trend, including changing consumer demands and e-commerce’s growing presence, in addition to greater retail restriction and harsher penalties. However, the right consolidation model can help shippers achieve greater supply chain efficiency and, ultimately, reduce costs and improve service.

Changing Consumer Demands Even as recently as five years ago, people turned to frozen foods for many meals—frozen waffles for breakfast, microwave meals for a quick office lunch, even pre-mixed meals for family dinner. But that’s changing. Today, convenience is king, and healthy options aren’t far behind on consumers’ wish lists. On-the-go packaging has never been more popular. Millennials and young families have jam-packed schedules, which means food needs to be ready fast. But unlike previous generations, today’s consumers still expect their grab-and-go options to be healthy ones. More than ever before, consumers are making thoughtful food choices based on ingredients, source, company story and perceived health benefits. And frozen foods that are capitalizing on this trend—especially disruptors— are seeing growth. Meatless meats, gluten-free bread and low-calorie ice cream are just a few of the products that are gaining popularity across the United States—due in large part because they fit into the healthy options that consumers crave.

E-commerce Drives Competitors Startup companies trying to meet the need for healthy, convenient foods are sprouting up and taking their fair share of the market every day. And these disruptors can quickly gain regional and national footholds, thanks to the rising popularity of e-commerce. Online shopping that comes with two-hour delivery windows has



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blown apart old expectations of shopping. When you can sit on your couch and pick out a specialty brand of ice cream to have delivered, why would you drive to the store only to be able to pick from one or two brands? The demand for more product diversity in stores to compete with online offerings means more competition for shelf space. And as retailers try to provide what consumers want, they’ve expanded their inventory to include more brands. To manage this, they’re placing smaller orders and adding deliveries. A retailer that used to place a 30-pallet order every week may now require four pallets every day of the week instead, because they’re working with three times as many companies all selling the same product.

Retailer Requirements and Penalties Frozen transportation isn’t all about the transportation costs anymore. Now your soft costs can have a real impact on margins. When

you fail to meet retailer requirements, you can expect to pay. Retailer fees for failing to stay compliant are rising; some retailers have even started fining based on the cost of the goods. And for the first time, paying a little extra on transportation costs to improve service and reliability levels might actually save your company money. And these fines are not static. It seems that every month retailers send out Frozen transportation isn’t all about the transportation new fees, fines or complicosts anymore. Now your soft costs can have a real impact ance structures. Especialon margins. When you fail to meet retailer ly impacted by these costs expectations, you can expect to pay.” are third-party logistics providers (3PL), who’ve rapidly seen more stringent onwindows to make time for the time expectations and narrowing deliveries they’re expecting from delivery windows. more brands. The ever-changing Beyond just being on time for expectations make meeting them delivery appointments, retailers even more difficult for shippers that also are shrinking those delivery need to deliver even more often.



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The same changes that are affecting the retail sector

Just-in-Time Environment Frozen food shippers are living in a just-in-time (JIT) world, and it changes everything. Plain and simple. It no longer matters that your frozen product has a yearlong shelf life if the retailer you’re delivering to expects new deliveries every week.



at large are influencing frozen foods.” Luckily, frozen food companies have it slightly easier than fresh food companies when it comes to transporting goods and still meeting retailer requirements. Transporting consolidated frozen products can be simpler than refrigerated products because freshness isn’t at stake. Trucks are kept in a frozen state, and as long as the truck maintains one set temperature, the products aren’t likely at risk for damage. Not to mention that refrigerated products have varying temperature windows, which can make consolidation across products more difficult—although not impossible.

Frozen Consolidation Shipping ORDER BY 6 PM FOR SAME DAY SHIPPING





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The right consolidation model is one way to support frozen orders and achieve greater efficiency across your entire supply chain, leading to reduced costs and improved service to retailers. When

implementing a strong consolidation strategy, there are several things to keep in mind: • Inventory levels can be used to your advantage. JIT requires tight inventory control—at every step in the process. However, frozen food companies often miss the opportunity to leverage inventory levels; they tend to spread inventory out across multiple locations that are near current retailers. However, this is a strategy for highly perishable freight, and less perishable foods often receive fewer benefits from this strategy. Instead, a central inventory location allows you to leverage volumes and drive inventory costs down, without sacrificing product quality. • Do-it-yourself frozen consolidation requires skill. Consolidating frozen foods relies on large volumes to make it successful—especially when retailer expectations are so high. When retailers expect deliveries every week and in a small window, building your own loads can be extremely difficult. Trying to send one truck that’s only 60 percent full isn’t cost effective. Then further expecting it to make multiple retail stops and hit every delivery appointment isn’t going to work well. A provider that has several customers all with small orders that are shipping to the same retail location can make a single consolidation appointment and be far more successful.

Not All Providers Are Equal Maintaining a central inventory location relies on nationwide provider coverage; regional carriers often can’t compare. A provider with strong retail relationships that already is regularly shipping through these channels will have the most to offer. At the bare minimum, a quality frozen foods consolidator should offer the following: • Understand requirements, and offer a fair rate. Your provider should offer a fair rate paired with quality service. Make sure

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your provider understands all retailer requirements to avoid unnecessary fees and fines. A cheap rate that delivers late and results in fees isn’t a fair rate anymore. • Operate with consistency. Even the largest retailer will let you choose what day to deliver, but it then expects you to consistently deliver on that day and in a predefined window. Frozen consolidators that have high enough volumes can help match production cycles and transit times to delivery expectations, such as tendering on a specific day, shipping within a certain window and delivering on that day as planned. • Provide visibility to orders and key performance indicators (KPIs). The concept of delivering both in full and on time is a hot topic across all supply chains— especially for temperature-controlled foods. The only way to achieve it consistently is with clear visibility. Visibility seems

like a self-explanatory requirement, yet it still is a challenge for some providers to deliver. You should know exactly where each of your consolidated orders are in transit—whether they’re awaiting pickup, in motion or meeting a delivery window. If the frozen food consolidators you’re looking at (or are already working with) aren’t able to provide this level of service, consider finding a provider that can.

ture is hard to predict, but it’s safe to say that more products will try to capitalize on the “convenience” and “healthy” aspects that today’s consumers want and demand. Those who are truly successful in the space will have supply chains that can keep their profits as profits—rather than paying them out as retail fees and fines.

Linus Kalenze is the director of consolidation at C.H. Robinson, a Fortune 500 provider of multimodal transportation services and third-party logistics.

Room for Innovation The growth of the frozen food market shows frozen foods are by no means disappearing. But the same changes that are affecting the retail sector at large are influencing frozen foods. What the space looks like in the fu-

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Data collected via lift truck telematics is creating a safer, more efficient warehouse.

Crown Equipment’s InfoLink fleet management system, shown below, is mounted directly on the lift truck.

ift trucks are the workhorses of the warehouse, and like most tools across the supply chain, they’re increasingly becoming smart—proving an essential source of supply chain data. Lift truck telematics are replacing outdated fleet management systems and, in some cases, manual processes to offer important data to managers that can be used to identify the best—and worst—operators, as well as measure impact, monitor and manage energy use, alert both operators and maintenance of possible repairs, and more. “There’s a lot of opportunity for customers to add telematics to their vehicles. Your larger, bigger fleet users have adopted it pretty much across the board, but there’s a lot of opportunity for your smaller customers to have one or two vehicles,” says Jim Gaskell, director

of global technology business development for Crown Equipment. “Fleets of all sizes can benefit from the data that’s being collected to improve their efficiency.”

Safety First When it comes to fork lifts, safety is always top of mind. Telematics integrated with a fleet management system can help operators check off a few of those safety boxes—quite literally. Gaskell says one of the primary reasons warehouses adopt telematics is to help operators comply with OSHA-mandated checklists. Telematics have the ability to not only record that checklist electronically, but also control or shut down the truck if the operator notes the truck is unsafe to operate. “One of the biggest problems (with the checklist) requirement is the completion of a paper checklist,” he adds. “Paper really only creates a record, and a lot of the times, an operator might write the wrong machine number on the piece of paper, and then after they’ve collected a week’s worth of data, they take that paper off the truck, they put it in the file cabinet and then they find out they have a piece of paper that doesn’t belong to any truck.” With telematics, the system always knows what truck belongs with what checklist. Additionally, telematics can respond to any kind of failure on the checklist, which indicates a reason the truck is unsafe to operate. The system will automatically lock out the truck until supervision comes and fixes the problem or re-enables the truck.

Operator and Fleet Efficiency Beyond the safety benefits, forklift data can help management track



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operator performance. Telematics systems can actually control the forklift based on an operator’s skill level, so that when they sign on to the equipment, their skill level is noted in the system and slows the truck down based on that level. The system also can provide performance indicators back to management, as well as the operator, such as how often they’re driving the truck, lifting the truck, standing idle on the truck, or not on the truck at all. These data points are especially crucial in optimizing your fleet. “In a lot of cases, customers think they’re using their trucks all the time because they see them in operation, but in reality, they use them a much smaller percentage of time,” Gaskell says. “People buy the number of forklifts that they need based on the peak volumes in the warehouse. When they’re trying to move goods, there’s certain peak times of the day, but at other times of the day, they’re not using the lifts all the time and maybe not at all.” Improving operator efficiency via data doesn’t come without its challenges, though. Gaskell notes that management often doesn’t know how to talk to their operators about the data being collecting about their performance, adding, “If you don’t know how to speak to your operator, then your level of service is going to be limited.” Management needs to be aware of certain operator behavioral patterns, how to address them and how to coach operators to avoid them. “If you don’t know how to ask the right question to address a problem, you will not have success,” Gaskell says. “You can look at the data, but you need to know what to do with it, how to address it. The best way to do that is to look at best practices.”

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Brace for Impact Many telematics units are mounted separately on the truck and some eventually Telematics will be built right can offer in—but what Gaskell real-time says is even more analytics important than the across your entire fleet. placement is how the system is integrated into the truck. “What I call an integrated system is one that uses the truck sensors to also enable the telematics,” he adds. If a lift truck is driving across an expansion joint that really shakes the truck, a telematics system that is not integrated into the truck’s sensors will log the movement as an impact. An integrated system will recognize that the truck didn’t change momentum, and know that the movement should be filtered as a bump in the floor instead of an

impact to the truck. “Systems that aren’t integrated, which means they’re not connected to the camera system or into the truck’s heart, so to speak, wouldn’t be able to identify that. They wouldn’t know that that truck didn’t change momentum, and they would register that as an impact,” Gaskell says. “When you think of a bolt-on system, it’s not as important as the modules on the outside. It’s how integrated it is to the truck system.”


That in itself, Gaskell says “could prevent complete engine failure, complete motor damage, batter damage, anything.” The maintenance light also gives the service provider an indication as to what part they might need for that vehicle, so if they’re traveling over the site, they’ll know what to bring. “The future of this is that all the data are analyzed in the cloud, and you can actually start to determine priority of codes and parts that are driven behind them,” Gaskell says. “The efficiency will continue to grow as that engine continues to get smarter.”

Like the check engine light in your car, telematics can alert both operators and maintenance personnel that something is wrong. Maintenance can seek out the vehicle and look up the code to decide if the repair needs to be addressed immediately. Or, via the terminal, maintenance can ask the operator to bring the truck in for service.

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HOW THE RIGHT CARRIER CAN HELP BOOST BUSINESSES Choosing the right transportation provider is essential to an efficient supply chain and brand protection.


ay in and day out, food and beverage shippers are faced with numerous decisions regarding their business. The constant barrage of choices and considerations can be overwhelming, especially when a key contributor to the stress is selecting the right transportation provider. Along with moving your products from Point A to Point B, the right transportation provider allows your supply chain to hum, while also protecting your brand. So, it goes without saying that selecting the right one is essential and maybe downright daunting—but it doesn’t have to be. Here are three easy steps in assessing the carrier that is the right fit for your business needs.

➊ Understand the benefits of large support networks to protect your brand. Bigger doesn’t

Mike Norder is the director of marketing at Schneider, a provider of transportation and logistics services. He has been with the company for more than 25 years.


always mean better, but the old expression holds true when it comes to transportation support networks. Carriers with large support networks use their own capacity and have more sophisticated resources and expertise to provide shippers with the best and most efficient ways to move freight. For instance, carriers with large networks often employ load engineers who assess whether the appropriate resources are in place to ensure freight is loaded, blocked and braced correctly for transpor-


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tation. The value of load engineers, claims per delivery can add up over however, dovetails into a larger time, needlessly contributing to the quality control issue. They evaltotal cost of transportation. A caruate food and beverage product rier that has the expertise in place conditions during transit and how to properly load and ship food and external transportation issues can beverage products can minimize affect the quality of the product unnecessary damages and claims. once it’s at its destination. That’s good news for the bottom A driving factor for quality was line and your brand. laid out by the U.S. Food and Drug Administration’s (FDA) Food Safety ➋ Opt for options Modernization Act (FSMA), which backed by assets. aims to ensure food is safe by shiftWhen it comes to transportation, ing the focus from responding to shippers have a lot of questions food contamination to preventing about how they should run their it. Shippers are responsible for enbusiness. One of those questions is suring that the correct equipment whether they should use asset- or is being used and appropriate connonasset-based carriers to manage trols are in place when delivering their freight. food products—information that Recently, food and beverage should be shared with their carriers manufacturers have experienced to ensure protocol is followed and margin compression due to the contamination is mitigated. potential of lost market share, In conjunction driven by the lack of conA carrier that with a shipper’s sumer loyalty. That means has the expertise FSMA standards, finding any cost savings in in place to properly the supply chain can make a load engineers load and ship food significant—and necessary— consistently take and beverage weather and altitude impact. Feeling the fiscal products variables into pinch, shippers may turn consideration when can minimize to using nonasset-based unnecessary carriers to take advantage shipping food and beverage products damages.” of potentially lower prices to ensure that the in the spot market. This integrity of the prodapproach allows shippers uct is maintained throughout the to cast a wide net when it comes to journey. Without this insight, the using brokerage providers. quality of the product, once it gets The drawbacks? Many times it is to its final destination, can mean unknown who is moving the prodadded claims per load if the product uct, whether the drivers are ELD has been compromised. Several or CSA compliant, or if they’ll be

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able to meet businesses needs on a consistent basis. An asset-based carrier with a controllable fleet mitigates those risks and offers capacity, flexibility and consistency, all of which help keep supply chain costs in check and ensure product availability for consumers. When using third-party logistic providers (3PLs), look for those that are backed by or include asset-based options. Engaging in

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a long-term agreement with an asset-based provider or reputable 3PL yields service efficiencies and consistency in product forecasting. This is beneficial because shippers experience more consistent rates year-round, and they can use the data gleaned over the length of the term to more accurately predict freight costs in the future. Another factor to consider when selecting a transportation pro-

vider is whether it has the ability to provide multimodal solutions for shippers. This flexibility and advanced mobility keeps product moving because it can accommodate for extenuating circumstances. Major closures due to construction or weather conditions can negatively impact shipping timelines and product availability. Using a carrier with robust offerings can allow for freight nimbleness that nonasset providers may not be able to deliver. Lastly, applying a centralized procurement strategy eliminates a piecemeal regional procurement approach, which often results in a larger overall transportation spend. Shippers need to assess their total transportation costs, not just parts of it, and determine whether a fractured transportation approach makes sense. Being consistent with several core carriers across an entire business or parent company can produce greater consistency and savings.

Engaging in a long-term agreement with an asset-based provider or reputable 3PL yeilds

service efficiencies & consistency in product forecasting.�



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Global Supply Chain Solutions for the Food and Beverage Industry

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Ma r k yo u r c a l e n d a r s t o s u b m it a n a p p li c a t i o n ! O nline nom inat ions open appr ox im a t e l y e i g h t w e e k s b e fo re t h e d e a d l i n e s l i s t e d a b o v e . Awar d r esult s, inf o rm a t i o n a n d n o m i n a t i o n s p o s t e d o n : Nomination dates and issues may change. Consult the call-for-entries email and nomination survey for confirmation

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➌ Find ELD-compliant carriers. The

deadline for ELD compliance is quickly approaching, and with that comes an unsurprising tightening of capacity, as carriers are either still noncompliant or struggling to adeptly implement and use the devices. The electronic solution will monitor drivers’ hours of service (the hours a driver is legally allowed to drive), making it easier to track, manage and share records of duty status data. Beginning Dec. 18, roadside enforcement personnel will begin documenting ELD violations. With the new regulation, noncompliant carriers/drivers will be issued citations, and eventually be put out of service. This means if your product is on one of these trucks, it’s going to be delayed for an undetermined amount of time. With cargo that has a limited shelf life, 10 hours (at least) is a lot to lose. To maximize efficiency, shippers should find a multimodal carrier

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that is an early adopter of ELDs and has already worked through the productivity, driver compliance and acceptance issues associated with this technology. Navigating the issues early, and being confident in the required compliance, ensures that drivers can do their job as efficiently as possible. Shippers that opt to use a noncompliant carrier can even be held liable if the driver is stopped, cited or involved in an accident. Because ELDs will help track hours of service, food and beverage shippers should work with ELD-compliant carriers now to discuss any necessary transportation changes. Due to changes with the mandate, current non-ELD-compliant drivers will see a reduction in miles driven. Assessing the business impacts from an ordering and fulfillment process will help identify required timeline changes and provide visibility into whether there is merit in restructuring the transportation plan. This could include converting some truckload

business to intermodal for maximum efficiency. Keeping food and beverage items moving is important, so using carriers that are compliant is imperative, especially as a capacity crunch looms.

Turning the Transportation Tables While the logistics of shipping food and beverage products can seem overwhelming, choosing the right carrier for the job can actually be an easy mark to check off a shipper’s lengthy to-do list. Working with carriers that have large support networks and are already ELD compliant alleviates the burdens that come with managing a supply chain—and often save on cost, too. Because these types of carriers are better prepared to meet the unique needs of the industry, shippers can worry less about how their products get from Point A to Point B, and focus more on finding new ways to grow their business into tomorrow.

Navigating the issues early, and being confident in the required compliance, ensures that drivers can do

their job as efficiently as possible.”



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TMS IN THE CHANGING WORLD OF FOOD & BEVERAGE Choosing the right TMS takes some work, but it can make all the difference.



s everyone knows, the it’s required,” insists JP Wiggins, supply chain is in constant co-founder and vice president flux, with new and complex of logistics at Shelton, Connectichallenges always appearing. Trans- cut-based 3Gtms. portation management systems (TMS) in the food and beverage Outdated Processes sector may be even more involved, an Advantage with cold chain, e-commerce, online For some food and beverage groceries and increasing complicompanies, efficiency may be ance issues complicating things. difficult to achieve because—as Food industry supply chains have hard as it is to believe—many are to juggle multistop loads, combine still using spreadsheets. less-than-truckload (LTL) into “The No. 1 tool is still Excel; full truckload (TL)—consolidating yet, the business is getting more different customers’ freight on the complex,” Wiggins says. “They’re same load, all the while meeting facing more needs from the cusregulations. tomer side. Customers are “Tracking expecting more and better Customers are and visibility of service, [even from] an IT expecting more, but are freight moveperspective, [but] they’re stuck in an industry ments, as well stuck in an industry that’s that’s still as the accuracy still highly manual.” highly of documentaThat changing landscape, manual.” tion, is no longer however, is beneficial to the ‘nice to have,’ TMS providers, notes Dan Dan Sellers, CEO, 360data


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Sellers, CEO of 360data in Appleton, Wisconsin. He sees three areas where a TMS can make a difference: routing, execution and analytics. “Routing means having the right carriers on the right route. Execution means integrating the system into your EDI, and business analytics means understanding the performance and management of your carriers,” he says. “You’ve got the data mined to help you drive those decisions.” The trend toward consumer demand and e-commerce has caught the attention of Sean Guzik, senior solutions architect at Cary, North Carolina-based MercuryGate. “Mail-order food like [ingredient and recipe meal kit provider] Blue Apron are now getting involved in the marketplace,” he notes. “That’s making us think about our distribution facilities and what the network model should be made up of.

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Where others heat up, we always stay cool.

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SR: SOFTWARE & TECHNOLOGY continued “Customers want visibility; they want to see their product move through the chain,” Guzik adds. “How are shippers changing their supply chains to adapt from supporting heavily processed food with a long shelf life to shipping fresh foods, especially since consumers are also looking at the source of the foods for environmental responsibility?” Stepping away from spread-

sheets to automated TMS technology is making a difference, says Wiggins, noting that return on investment (ROI) is achievable via automation and cost control. “As technology evolves, it becomes simpler and easier to install. There are many proven success stories with fast—less than one year—ROI. Even simple, full truckload execution should be automated, and there is cost savings to doing so. Automate simple tasks, capture better data

and use the data for analysis on how to improve. “Food distribution companies are now being judged more on the quality of their technology and IT abilities to deliver information, not just freight,” he adds. Sellers says that, from a TMS perspective, “not all of your issues can be solved, but there is software to integrate into the TMS itself. Best practices are driven by your customers. Each has different requirements, and you have to comply. A good TMS will have that compliance.”

It’s the Law Both the Food Safety Modernization Act (FSMA) and the electronic logging device (ELD) mandate are forcing food manufacturers, shippers and third-party logistics providers (3PLs) to ensure their carriers are compliant. FSMA came about because, according to the Centers for Disease Control and Prevention (CDC), about 48 million people (1 in 6 Americans) get sick, 128,000 are hospitalized, and 3,000 die each year from food-borne diseases. This is a significant public health burden that is largely preventable. That caused the U.S. Food & Drug Administration (FDA) to create the act, intended to ensure the U.S. food supply is safe by shifting the focus of federal regulators from responding to contamination to preventing it. The ELD rule was implemented by the Federal Motor Carrier Safety Administration (FMCSA). It requires ELD use by commercial drivers who are required to prepare hours-of-service (HOS) records of duty status (RODS). It sets ELD performance and design standards, and requires ELDs to be certified and registered with FMCSA. In addition, it establishes what supporting documents drivers and carriers are required to keep, prohibits harassment of drivers based on ELD data or connected technology (fleet management systems, for example) and provides recourse for drivers who believe they’ve been harassed.



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“The impact of the FSMA and other regulations is significant,” Sellers says. “One result is that shippers need to articulate the proper handling conditions and requirements for the product being moved. Are the carriers prepared to validate these requirements, and/or do they need to be able to do this? People knew FSMA was coming.” And, asks Guzik, how are shippers and 3PLs ensuring that the carriers they choose are compliant? In turns, those carriers also have an onus on them because of the ELD. Many observers think the rule will make an already critical driver shortage even worse. “Capacity is expected to decrease because some drivers are saying they will leave the industry, rather than comply,” Guzik says. “How can food logistics shippers obtain needed capacity with the specialized

equipment required for this industry? A lot of shippers want some type of carrier management software [with their TMS], so they know if they assign a load to a noncompliant carrier, they’ll be able to stop it and shift to a compliant carrier.” Other expenses that occur because of new regulations include training, technology, driver pay, administrative costs and more. “Where are the efficiencies in the supply chain to offset or slow those rising costs?” asks Sellers.

Things to Think About The integration of available software into a TMS system needs to be quick. What used to take years, now needs to be done in a couple of weeks or less, but it takes research to discover the right software to help you meet the needs of your customers. TMS is coming out with simple solutions that are rapidly implemented, cheaper and up front. Wiggins suggests looking at case

studies from other companies to gage their experiences. “We’re not Amazon, and you’re not Amazon, but customers expect the same kind of speed [and simplicity]. You have to hide the complexity from the customer,” he adds. Guzik agrees, noting it’s all about usability. “Make it simpler, and quicken each process. Look at use cases and successes. Is the TMS vendor strong in your success categories? Understand your customers’ requirements, what’s important to them for TMS. Find the strengths and weaknesses of each TMS. Velocity is the key. People want to get live as soon as possible.” Sellers adds, “Best practice is driven by your customers. Each has different requirements that providers must comply with. “Start with your primary distribution channel targeted toward TMS suppliers that have a strength and history in understanding what those distribution channels require to do business with them,” he advises.

Barry Hochfelder is a freelance journalist who has covered a variety of industries in his career, including supply chain. He also served as the former editor of Supply and Demand Chain Executive. Hochfelder is based in Arlington Heights, Illinois.

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uch has changed in the world over the last 10 years that’s affected the food industry and movement of perishable goods. According to a report by the Brookings Institution, “The Unprecedented Expansion of the Global Middle Class,” the global middle class is expected to grow from 3.2 billion people in 2016 to 5.2 billion in 2028—primarily in Asian countries. As the middle class and economies have grown, so too has the demand for food. Global supply chains have responded with new technologies to safely transport perishable foods to all points around the world. For


Niche ports for perishable foods are investing in a changing market that keeps their services fresh and operations efficient.



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ports specializing in the cold chain, this demand has been critical to their operations, while also leading to investments as carrier services and technologies evolve. Kristin Decas, CEO and port director for the Port of Hueneme, explains, “Now, more than ever, it is crucial to foster open communication with our customers. Partnering with them has proven key to implementing new technologies to meet the demand,” she says. “Leading the industry as the West Coast hub for bananas, we are continually looking at new technology and equipment to move this cargo even faster. Here at Hueneme,



our uncongested main gate and streamlined terminal traffic flows enable us to have one of the fastest turn times in the industry.”

Containers on the Move John Haroldson, marketing director for the Port of Wilmington, Delaware, says the port has a long history of handling perishable foods. It’s also the leading banana port in North America, with both Chiquita and Dole making weekly vessel calls. While these liner services have used containerization for decades to transport banana shipments, specialized reefer operators are transitioning from pure break bulk to deck-loaded reefer containers for other fruit shipments. This trend is occurring most with Chilean winter fruit cargo, where specialized reefers arrive with nearly 200 containers on deck and an additional 5,000 pallets under deck, says Haroldson. The move toward containerization is also appearing with the port’s Argentinean apple and pear programs, and is a topic of discussion with its Moroccan citrus customer. “One advantage is that it adds

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capacity and economies of scale for cargo-intensive, seasonal programs, such as our Chilean trade. We’re now seeing reefer operators beginning to compete head-to-head with large container operators by building fully cellular reefer container ships without break bulk pallet capability,” says Haroldson. “These operators can now bring a pure reefer logistics cargo focus to the marketplace, leading to a liner service hybrid while maintaining the core concepts of speed and service. “This absolutely works in underdeveloped or new markets when the volume of perishables does not justify carriage via a pallet vessel,” explains Haroldson. “This is the next evolutionary phase for the specialized and not so ‘conventional’ reefer—and it is already underway.” How will the port accommodate expected increases in containerization and volume increases in its reefer warehouses? Haroldson says the recent addition of two new ship-to-shore gantry

cranes with expanded pier length crane service coverage, along with investing in a major reefer warehouse racking installation program, will help with the infrastructure requirements. “We have a large, 800,000 square-foot on-dock refrigerated warehouse that is one of the largest complexes of its type,” says Haroldson. “Our new real-time inventory management system provides customers with the ability to

The difference locate fruit pallets within a racked maker at our port is stack. However, the difference maker is experienced port labor experienced that has been handling perishables port labor since the 1970’s.” that has been handling Lack of Congestion perishables since a Differentiator the 1970’s.” The Port of Hueneme continues John Haroldson, to grow as a niche port in Southern marketing director, Port of Wilmington, Delaware California, largely due to using its lack of congestion on port as a competitive advantage to attract

We Make Cargo Move BMW of North America Brusco Tug & Barge Channel Islands Logistics Chiquita Fresh Ceres Terminals Inc. DCOR Del Monte Fresh Produce Exxon GLOVIS Great White Fleet National Response Corporation Cool Carriers NYK Ro Ro Marine Spill Response Corporation Network Shipping OST Truck & Crane Oxnard Unloading Pacific Ro Ro Stevedoring Freeport McMorran Oil & Gas Port Hueneme Ice Port Hueneme Pilots Ports America SeaLand SSA Marine T & T Truck and Crane TracTide Marine Corporation Veneco Wallenius Willhelmsen Logistics Yara North America

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Working together since 1937 We enhance customer experience. We add value to your cold chain! The Port of Hueneme is one of the nation’s businest fresh produce ports, and is a vital economic engine for Ventura County. Our Port is uncongested. We consistently rank among the top U.S. ports for cargo throughput. We know every day counts! We’re green. Our robust environmental framework sets strategic plans in motion, earning us the first Green Marine third party certification in California and “Green Port of the Year” from the Green Shipping Summit USA. OCTOBER 2017 | FOOD LOGISTICS


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customers. “The port’s ability to continue to have a noncongested gate and dock is a direct result of the partnerships we have with our customers,” says Decas. “These partnerships have established Hueneme as the perishable commodity strategic port on the West Coast.” The port imports 600,000 cargo tons of bananas per year as well as other seasonal fruit from Central and South America, while exporting pears, apples and stone fruits from the coast’s farming industry. As a niche port for cool cargoes and dubbed “The Port that Farmers Built,” the Port of Hueneme is unique from other ports along the California coast. The move toward greater containerization in place of reefer break bulk ships is also occurring at the port. Dona Toteva Lacayo, chief commercial and public affairs officer for the port, says there’s also consolidation occurring among shipping lines. “The size of carriers is increasing, market shares are shifting and more perishables are arriving in containers,” says Toteva Lacayo. “We’re closely The port’s ability monitoring these trends and working with to continue to have our customers to reconfigure our termia noncongested gate nals so they’re more container friendly.” and dock is a direct There’s an absence of port congesresult of the tion, enabling the port to accommodate partnerships weekly ocean services. More important we have for perishable cargo is the port’s ability with our to maintain the cold chain. There are 299 customers” reefer plugs on port and more than 500 plugs among distribution facilities within Kristin Decas, CEO and port director, Port of Hueneme a 10-mile radius off port. “Reliability is critical, and providing quality customer service is why carrier customers continue coming back to us,” says Toteva Lacayo. “We have a strong relationship with our ocean carrier customers and understand what their needs are. While some are more container focused, others are shipping with break bulk pallets—what is constant is an efficient operation that doesn’t break the cold chain.” Along with customer relationship management, the port prides itself on transparency with its customers and marketing support throughout the community. Toteva Lacayo says decisions about vessel schedules as well as terminal, labor and space needs for the coming weeks are part of a weekly port operators group meeting. “Having the operations department and harbor masters in the same room to set schedules and decide on the operations plan going forward is imperative to our efficiency and level of transparency throughout the port,” says Toteva Lacayo. “It’s what prevents congestion that’s so common at many other ports and maintains open channels of communication.”

Speed On and Off Port It’s congestion at larger ports that is forcing supply chain leaders to seek alternative ports that operate more quickly and provide better communication than some larger ones, says Dominic O’Brien, senior marketing representative for PhilaPort. “You need operating systems that move cargo off the dock quickly using faster gate times, dedicated truck lanes and close access to highways,” says O’Brien. “PhilaPort provides the customized supply chain solutions that are essential for cold cargos.” Call us at 877.724.2327 or email

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there are 2,400 refrigerated plugs with segregated container stacking and cargo placement. O’Brien says new refrigerU.S. consumers are eatAs big-box retailers ated plugs are appealing to ocean carriers and their customers. ing more fresh produce and and e-commerce “We’ve made improvements to demanding healthy, fresh foods food companies the gates to move trucks through all year round. O’Brien says market more faster. And our new super-post this change is obviously good fresh produce, Panamax cranes will move for people’s health, but it’s our port will benefit.” containers more quickly on and also good for the port—which Dominic O’Brien, off the ship,” he says. “The port is serves as the No. 1 fruit port senior marketing representative, PhilaPort also adding 40 acres to the Packer complex in the United States. Avenue Marine Terminal, allowing “As big-box retailers and for faster operations. e-commerce food companies “With the purchase of 29 acres within one market more fresh produce, our port will mile of the docks, PhilaPort plans to build benefit,” says O’Brien. “Big retailers bring a 365,000 square-foot warehouse,” says stringent quality demands with their large O’Brien. “It will be a combination of refrigervolumes, and almost uniquely among U.S. ated and food-grade dry cargo. Marine TermiEast Coast ports, PhilaPort has the ability to nal space is valuable. Our goal is to move the meet those requirements.” At the port’s Packer Avenue Marine Termicargo quickly and efficiently from the pier to nal, its largest on-dock cold storage facility, this new in-land cold storage facility.”

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Randall Manufacturing Co................................... 12-13

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H & M Bay Inc........................................................................9

REB Storage Systems International.........................31

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MARITIME SHIPPING SECTOR Ripe For Technology Transformation


arlier this year, Food Logistics’ worth of waste in port and carrier the cargo once it’s available at the sister publication, Supply business processes alone. When ocean terminal. & Demand Chain Executive, the wider ecosystem is taken into The survey found that approxipartnered on a global industry account the inefficiencies—and opmately 90 percent of shippers and survey focusing on the technology portunities for improvement—are consignees report that visibility challenges facing the ocean shipeven greater. needs to be improved in the ocean ping supply chain. Just how significant are these supply chain. About 85 percent Technology firms Navis and XVE- opportunities? BPI Network, which describe the industry as either LA sponsored the research, which worked with Navis and XVELA, the “slow to change” (70 percent) was based on a survey or “far behind the of 200 executives and curve” (15 percent) THE COMPLETE SURVEY, professionals from the when it comes to “Competitive Gain In the Ocean Supply Chain,” ocean supply chain, as innovation and next is available at well as in-depth intergeneration technolviews with industry ogy adoption. thought leaders. sponsors of the research, states: Mark Wootton, CIO of Yilport The topic is very timely. While “Stakeholders across the supply Holding, tells researchers that, ocean carriers, terminal operators chain see huge opportunities to “What we see is that the end and ports are currently making improve efficiencies and customer customer, the one who is actually impressive strides to implement service through better collaboraexporting or importing the goods, technology solutions designed tion and data integration. When is kind of left out of the loop. They to improve visibility and cargo asked to rate the percentage of don’t get the visibility they need handling, the maritime shipping potential improvement that could of where the cargo is between sector has generally lagged in the be achieved across a wide range point A and B and when it’s going adoption of innovative supply of ocean supply chain processes, to ship. What’s really needed is to chain technologies. surveyed executives estimate the find a way to bring them into the According to McKinsey & Comroom for improvement in each area loop—actually give them better pany, there is roughly $17 billion is as high as 66 percent and no less visibility, traceability and notificathan 55 percent.” tions, like you get with a FedEx- or A FULLY-FUNCTIONING SUPPLY In addition, “Some 57 DHL-type service.” CHAIN REQUIRES VISIBILITY OF percent of executives say One industry executive warns poor coordination between that customer service cannot ACTIVITIES AND CONNECTIVITY be ignored. Already, “In the U.S., BETWEEN STAKEHOLDERS, BUT... partners and others in the supply chain is one of the customers are turning to NVOs bebiggest challenges they face. cause these freight forwarders are Another 50 percent point to able to provide at least a modicum a lack of transparency and of service improvement,” which feel the level of visibility across the supply poses a competitive threat to the connectedness and chain as a top challenge.” shipping lines. visibility needs to Beneficial cargo owners Of course, every business be improved (BCOs) aren’t getting the cus- threat is an opportunity, and in tomer service they deserve that regard, the maritime shipping either, which severely hinders sector is staring at a golden optheir ability to plan and portunity to embrace the power of technology and the transformafeel there is virtually execute the onward transportation (by rail or truck) of tion it can deliver. no visibility



57% Poor coordination between partners


Too little transparency and visibility


Inefficiencies within the supply chain


FLOG1017_41-44_FoodThought.indd 41



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Food Logistics October2017  

Food Logistics is the only publication exclusively dedicated to covering the movement of product through the global food and beverage supply...