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3PLS FOR FOODSERVICE

THE FUTURE OF TMS TECHNOLOGIES

WEARABLES IN THE WAREHOUSE

MITIGATING

RISK

IN THE COLD FOOD CHAIN Check out how technologies and strategies mitigate risk, improve visibility and monitor farm to fork. Issue No. 221 October 2020

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© 2020 Penske. All Rights Reserved.

ON THE MENU

October 2020 ISSUE NO. 220 FOOD (AND MORE) FOR THOUGHT

Embracing Food Waste Prevention to Create a More Resilient Food System

38

Phood details why waste tracking and analysis are important to maintaining a more sustainable supply chain.

40 COVER STORY

Mitigating Risk in the Cold Food Chain Discover some of the technologies and strategies put in place to better mitigate risk, improve visibility/traceability and monitor farm to fork along the cold food chain.

FEATURE 3PL & REFRIGERATED LOGISTICS

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3PLs Support Resiliency in Foodservice During Pandemic

COVID-19 required 3PLs in to assist in major food operation pivots.

SECTOR REPORTS WAREHOUSING

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Wearables in the Warehouse

Voice assistants and wearable technologies expand from home to warehouse. TRANSPORTATION

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How Movement of Perishables Continue to Fly High

Dachser details why some produce exporters look to air freight as an alternative means of transporting goods. SOFTWARE & TECHNOLOGY

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The Future of TMS Technologies

Transportation management systems connect cold food supply chains.

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OCEAN PORTS & CARRIERS

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When Reshoring Won’t Do, Nearshoring May Be the Answer

LocatorX says the closer companies bring production to home, the better visibility and control they have.

COLUMNS FOR STARTERS

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Risk Mitigation Amid a Pandemic

Even though COVID-19 impacted nearly every facet of the food chain, editor-inchief Marina Mayer says that what didn’t falter was the urgency in mitigating risk along the line. COOL INSIGHTS

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The Cost of Food Spoilage, and What it Means for the Food Industry

LocatorX predicts that the demand for logistics and shipping companies will only increase.

Why Quality Managers Should Consider RealTime Supply Chain Temperature Monitoring

Controlant says having the ability to solve challenges in a sustainable manner can help managers focus on other critical tasks.

DEPARTMENTS 06

Supply Scan

10

Food on the Move

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Published and copyrighted 2020 by AC Business Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher. Food Logistics (USPS 015-667; ISSN 1094-7450 print; ISSN 1930-7527 online) is published 10 times per year in January/February, March, April, May, June, July, August, September, October and November/December by AC Business Media, 201 N. Main Street, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI 53538 and additional mailing offices. POSTMASTER: Send address changes to Food Logistics, P.O. Box 3605, Northbrook, IL 60065-3605. Subscriptions: U.S., one year, $45; two years, $85; Canada & Mexico, one year, $65; two years, $120; international, one year, $95; two years, $180. All subscriptions must be paid in U.S. funds, drawn from a U.S. bank. Printed in the USA.

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OCTOBER 2020 | FOOD LOGISTICS

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FOR STARTERS

FROM THE EDITOR’S DESK

RISK MITIGATION AMID A PANDEMIC R Marina Mayer Editor-In-Chief

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isk mitigation has always been at the forefront of cold food and beverage companies’ list. Whether it’s finetuning clean label certifications or implementing track-and-trace procedures, the Coronavirus disease (COVID-19) nearly fast-tracked these technology developments to help organizations maintain quality control and food safety. In fact, several companies took a great deal of measures to implement procedures and standards to elevate food safety and quality assurance, including FDA’s New Era of Smarter Food Safety Blueprint, AIB International’s Pandemic Prepared Certification and Consumer Brands Association’s Contactless Delivery Task Force, to name a few. (Go to page 14 to read more about mitigating risk in the cold food chain). But, while concerns about food safety and supply chain management continue to intensify, this was a problem that existed even before the outbreak. In fact, this pandemic could give rise to the next biggest case of food fraud since the 2013 horse meat scandal, according to Lloyd’s Register.

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A SeaChoice investigation of seafood environmental claims found the sustainability of about two-thirds (65%) of the most common type of claims could not be verified based on the product label or website. An FMCG Gurus research study found that 25% of consumers have become less trusting of food brands in the last two years, and 62% said they believe that food brands are not fully transparent when it comes to communicating practices and policies. And, a co-produced FMI - The Food Industry Association and Label Insight study touts the rationale for how 81% of shoppers say transparency is important or extremely important both online and in-store. Even though COVID-19 impacted nearly every facet of the food chain, what didn’t falter was the urgency in mitigating risk along the line. The post-COVID-19 environment will continue to test supply chains’ resiliency. It will continue to force the industry to revamp processes, procedures and technologies to move cold food and beverages through the chain in a safe, timely and efficient manner. On a side note, be sure to check out additional topics and speaker information for our upcoming SCN Summit sessions at foodlogistics. com/scn-summit, download our L.I.N.K. podcasts from https:// cms.megaphone.fm/channel/ supplychain and check out LINK Live every Wednesday at 11 a.m. CST at foodlogistics.com/videos/ link-live.

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SUPPLY SCAN

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

HelloFresh Expands Production and Distribution to Support Rapid Demand Growth

PINC announced a partnership with project44 that aims to empower industry-leading shippers and carriers with end-to-end real-time shipment visibility and yard management automation capabilities for an enhanced supply chain experience. Project44’s shipment and ETA data in concert with PINC’s yard management system’s real-time asset and load data will accelerate the check-in process and provide customers with actionable dynamic load scheduling visibility. Organizations will also gain real-time insights into critical yard asset and load lifecycle transitions through project44’s Advanced Visibility Platform. “PINC enables enterprises to find and assign trailer assets and associated loads automatically through their life cycle, and optimize their movement between gates, yard and docks,” says Matt Yearling, chief executive officer of PINC. “Combining project44’s advanced visibility and predictive tracking and ETAs with our yard orchestration engine will enhance the shippers’ ability to meet on-time-in-full requirements, maximize the productivity of warehouse labor and assets, achieve real-time visibility to available inventory and compete on providing an enhanced customer experience, while significantly reduce costs.”

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Getty Images

PINC and project44 to Deliver Next-Generation Yard Automation and Predictability

HelloFresh SE announced the lease of new distribution centers in Newnan, Ga., and Irving, Texas, providing increased capacity through expanded supply chain capabilities to support growing demand in key Southeastern and central Texas locations. This expansion will allow HelloFresh to accommodate rapidly increasing demand and better serve new and existing customers. “These latest centers support our investment in long-term growth, as we execute on our strategy to continue expanding our total addressable market through fresh geographies, new customer segments and various demographics,” says Uwe Voss, chief executive officer of HelloFresh U.S. “To achieve this, we are expanding supply chain capacity and actively iterating on our menu to satisfy new and existing customers, expanding recipe selection, adding more convenient offerings and increasing meal customization options to maintain our long-term growth momentum.” HelloFresh has responded to growing demand by advancing supply chain capabilities, expanding its presence in a number of markets and adding menu flexibility and variety to meet customer growth and preferences. The additional distribution centers and expanded capacity will help the company serve rapidly growing HelloFresh customer bases across the United States.

Smithfield Foods to Become Carbon Negative by 2030 Smithfield Foods Inc. became the first major protein company to commit to becoming carbon negative in all company-owned operations in the United States by 2030. The company will go beyond carbon neutrality to effectively remove more carbon from the atmosphere than it emits. It will achieve this goal without purchasing carbon credits to offset emissions. ipopba - stock.adobe.com “As the world grapples with environmental challenges impacting our planet, consumers are looking to companies to take deliberate, bold action to address issues such as climate change,” says Kenneth M. Sullivan, president and CEO, Smithfield Foods. “The world is at an inflection point. To feed a growing world population with finite resources available to grow and produce the food we need, we must limit our environmental impact. At Smithfield, we are utilizing our expansive reach to lead efforts to eliminate our carbon footprint in our company-owned operations and remove greenhouse gases from the atmosphere.” This announcement builds on Smithfield’s goal to reduce greenhouse gas emissions 25% by 2025 across its entire supply chain, which it announced in 2016.

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SUPPLY SCAN

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

Restaurant Drive-Thrus Prove Their Value During the Pandemic

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Drive-thru restaurants have always been the ultimate in convenience and speed, but during the pandemic and mandated dine-in closures, they were also a lifeline for the restaurants that had them, reports The NPD Group. Drive-thru restaurant visits increased by 26% in April, May and June and represented 42% of all restaurant visits. In July, when more restaurants re-opened, drive-thru visits still increased by 13%, the highest visit increase among the service modes of onpremises, carry-out and delivery, according to NPD’s daily tracking of U.S. consumers’ use of restaurants and other foodservice outlets. “Drive-thru operations are delivering a high ROI during the pandemic, offering convenience, speed and the comfort of social distance to consumers using them,” says David Portalatin, NPD food industry advisor and author of Eating Patterns in America. “Fastcasual and traditional quick-service chains have already announced expansion plans for their drive-thru operations, and we will hear more chains doing the same. Drive-thru and other off-premises operations will be a major part of the U.S. restaurant industry’s recovery and future.”

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Study: 3 Out of 4 Consumers Fear Getting COVID-19 While Grocery Shopping

Despite social distancing, face coverings and tactics like one-way aisles, consumers remain wary about their safety in the supermarket. A new poll produced by Charleston|Orwig and Menu Matters reports that nearly 75% of consumers are concerned about catching COVID-19 while grocery shopping. The survey also reveals high frustration with the shopping experience and suggests ways grocery managers can relieve pain points to gain customer trust. “As more consumers are out and about, any activity is seen as a concern. Grocery shopping is no different,” says Maeve Webster of Menu Matters. “Even though supermarket managers made positive changes during the pandemic, this survey shows they haven’t yet fully addressed consumer concerns.” Key poll findings: · 74.9% of consumers report some degree of concern about catching COVID-19 while grocery shopping; 21.7% are “extremely concerned” and only 7.8% are “not at all concerned.” · Nearly two-thirds of consumers find pandemic-era grocery shopping at least somewhat frustrating. Those most frustrated are women and older Millennials who are more likely to have young children. · Grocery delivery and pick-up continue to be a popular alternative to in-store shopping, with 50% of consumers using one or more options. · Consumer buying habits continue to move toward canned, shelf stable and frozen items that allow for bulk storage and longer shelf life. · Meat is the big winner, with 40% of consumers reporting greater purchases now than before the pandemic started.

Atar Capital Acquires Foodservice Packaging Manufacturer WinCup Atar Capital has completed the acquisition of WinCup from funds managed by BlackRock, Inc. “Today, there is an accelerating expectation for eco-friendly packaging solutions, whether in foodservice or in other segments. WinCup has been working diligently to remain at the forefront with a growing portfolio of unique and innovative products and a scalable production footprint that provides proximity to many of the nation’s leading foodservice customers. In this context, we anticipate the next few years to be transformative for WinCup and the customers it serves,” says Robert Lezec, senior managing director at Atar. Through this acquisition, Atar confirms the appointment of a new leadership team for WinCup with Brad Laporte serving as chief executive officer and Michael Winters as president and chief revenue officer.

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

U.S.Online Grocery Survey: August KPIs Show Market Rebalancing After COVID-19 Spike U.S. grocery delivery and pickup sales for August totaled $5.7 billion, down from June’s peak, but other key performance indicators showed strength. In particular, average order value increased to a record high of $95, and intent to make a repeat purchase in the next month reached 75% in a market that is nearly five times larger than it was just one year ago, according to a Brick Meets Click/Mercatus Grocery Shopping Survey. August sales levels represent about a 20% drop compared to June and changing shopper attitudes toward COVID-19 is likely one of the contributing factors. The ongoing research has documented a steady decline in the percentage of households that express a high level of concern about contracting the virus, dropping from a high of 47% in April to 38% in August. “These results reinforce that grocery delivery and pickup services will continue to play an important role for both shoppers and retailers going forward,” explains David Bishop, partner, Brick Meets Click . “What’s also evident is that customers’ expectations will grow even higher, making it critical for retailers to continue improving the entire shopping experience.” Piman Khrutmuang - stock.adobe.com

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OCTOBER 2020 | FOOD LOGISTICS

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY

Transporeon and Sixfold Join Forces to Build RealTime Visibility Network

Transporeon

Transporeon announced plans to integrate Sixfold’s real-time visibility (RTV) technology with its leading cloud-based platform for transportation logistics offering full access to RTV for all Transporeon customers. Transporeon is the only company to provide an execution platform with an integrated visibility offer. For clients, the integration of RTV by Sixfold represents a major development in logistics management as well as the delivery of a seamless experience. “We need to remove upfront barriers. We’re serious about creating data transparency for all and combining visibility with execution will enable our customers to continuously improve their operations and open a whole new set of innovation potentials to all of us,” says Stephan Sieber, chief executive officer of Transporeon. After three years in a successful partnership, Transporeon and Sixfold will take it a step further in their merger. Integrating Sixfold’s state-of-the-art RTV solution within Europe’s largest network of shippers and carriers will generate important scaling effects, meaning that all parties to the Transporeon platform can enjoy far greater transparency than any individual RTV solution can offer.

Om Yale Brings Advantages of Lithium-ion Power to Heavy-Duty Applications

Uber Freight

Uber Freight Expands with Uber Freight Enterprise and Uber Freight Link Uber Freight is introducing Uber Freight Enterprise and Uber Freight Link, two enterprise software solutions that put Uber’s technical power directly into the hands of large shippers, providing a central point of control for logistics operations. These products advance and complement shippers’ existing transportation management systems (TMS) and warehouse management solutions (WMS), enabling seamless, efficient end-to-end freight management at enterprise scale. Uber Freight Link expands the enterprise platform with innovative execution software for loads outside of the Uber Freight network. Uber Freight Link enables enterprise shippers to leverage Uber Freight’s technology and benefits such as one-tap tendering, superior real-time visibility, proactive exception management and digital documentation across its full carrier network, instead of relying on 1:1 EDI connections with carrier TMS technologies. Each of these products is designed to help eliminate manual processes, improve service and ultimately reduce costs by tackling three core enterprise shipping challenges—streamlining carrier sourcing, automating load execution and speeding up information sharing between systems and supply chain professionals.

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Yale Materials Handling Corporation breaks new ground with factory integrated, high-voltage lithiumion power in 15,500- to 19,000-pound capacity sit-down counterbalanced lift trucks. The Yale ERP155-170SVNL, ERP175VNL36 and ERP190VNL provide a zero-emission alternative with performance comparable to an internal combustion engine in highcapacity indoor and outdoor applications. “Environmental considerations are an increasingly important focus for all industries and applications, as are the competitive pressures to streamline lift truck fleets and better manage costs,” says John Santiago, director, counterbalance solutions, Yale Materials Handling Corporation. “Introducing lithium-ion power to equipment for heavy-duty applications can help our customers respond to these challenges, and also provide significant ergonomic benefits for operators.” Lithium-ion batteries also provide consistent power delivery throughout the full battery charge, avoiding the performance degradation found in traditional lead-acid batteries. The battery can also fully charge in less than 90 minutes using the required charger, and opportunity charging capabilities allow operators to plug in whenever convenient to extend runtime and spend less time charging.

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FOOD ON THE MOVE

LOGISTICS TRENDS IN OUR INDUSTRY Port of Piraeus Vehicle Logistics Goes Digital with INFORM

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Omnitracs, LLC announced plans to acquire SmartDrive. The combined company will bring together two transportation technology leaders to offer an industry-first converged, end-to-end platform that optimizes safety, driver productivity and workflow, as well as routing, dispatch and compliance. “By integrating SmartDrive’s unparalleled transportation intelligence platform, video safety hardware and risk analysis service offering with the Omnitracs One platform, we can deliver a converged solution built on AI and ML that redefines the future of commercial transportation today. Real-time risk mitigation, streamlined data flows from the cab and vehicle sensors to dispatch and the back office and a superior driver experience will be brought together to improve safety, efficiency and operational excellence,” says Ray Greer, chief executive officer, Omnitracs. The combined company will deliver the most complete and intelligent DX with the right in-cab and back-office decision making, alerting and driver coaching—a virtual co-pilot that will lead to significant safety, fuel efficiency, operational and financial gains for fleets.

Port of Los Angeles Introduces New Data Tool

The Port of Los Angeles will begin distributing and publishing key dashboard data from Wabtec’s Port Optimizer, so that all supply chain stakeholders have easy access and can use the forward-looking information to better plan and prepare for inbound cargo. “We’re giving all of our partners—railroads, chassis providers, truckers, warehouse operators and others in the supply chain—a three-week look at cargo coming into Los Angeles,” says Gene Seroka, executive director of the Port of Los Angeles. “This planning tool will help make our partners more nimble Yale Materials Han dling Corporation and efficient, especially during volume surges like we are currently experiencing. This is the forward visibility our stakeholders have requested, and we are proud to deliver it.” The Port of Los Angeles Signal is a service of the Port of Los Angeles and powered by the Port Optimizer. It includes a dashboard view of how many shipments will be arriving in Los Angeles over the next three weeks. The data is broken down by container type and includes details on the mode of transportation, whether rail or truck, once it arrives in Los Angeles.

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OCTOBER 2020 | FOOD LOGISTICS

Port of Los Angeles

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Omnitracs Acquires SmartDrive

Port of Piraeus

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To further expand the strategic importance of its port for the international vehicle trade, the Piraeus Port Authority (PPA) S.A., member of COSCO SHIPPING Group, will invest in end-to-end digitization and optimization. The company has awarded a project to INFORM, Aachen, Germany, to improve the efficiency and transparency of vehicle handling at the port’s car terminal. In order to continue growth and to further expand its strategic position, PPA is implementing an intelligent IT system from INFORM Vehicle Logistics designed to enable end-to-end transparency of all processes in the supply chain. Customers, suppliers, third-party logistics providers and customs authorities will be able to track where and when a car has been delivered via a web portal. In addition, the algorithms of this system are capable of optimizing the operational processes in the compounds through realtime decisions and advanced planning. Consequently, this system gives PPA the advantage of improving its offered services and the flexibility of planning new business processes. The system will allow PPA to more effectively use available resources and continuously improve their processes. In addition, it will allow PPA to increase capacity to operate their car terminal. Covering over 145,000 square meters, the PPA’s car terminal provides a capacity of over 600,000 movements per year. Located close to the center of Athens, the Port of Piraeus occupies a geostrategic position for the eastern Mediterranean region. It is also considered an important transit hub for trade between Europe and Asia.

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COOL INSIGHTS

THE COST OF

FOOD SPOILAGE, AND WHAT IT MEANS FOR THE FOOD INDUSTRY The cost and impact of food spoilage

Properly managing the cold chain is a massive logistical effort. CalAmp

Avoiding food spoilage through proper cold chain management is crucial to maintaining quality, value and safety.

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coordinate pickups and deliveries; ransporting temperaequipment maintainers need to ture-sensitive products, be alerted to potential problems from vegetables to meat, before shipments are endangered; is inherently risky. Improper and operations managers need temperature during shipment can to access detailed auditing spoil food, leading to consumer information to ensure compliance safety issues. Rejecting mishandled with regulations and guarantee shipments carries an enormous shipments can be economic cost. In the best of trusted. In the best times, the UNITED When thinking about of times, the STATES WASTES the many opportunities United States for errors considering wastes 40% of these steps, it’s easy its food annually, to see how quickly and amounting to of its food annually, amounting to about 63 easily food quality could about 63 million MILLION TONS. be impacted. tons. Due to To combat these the Coronavilosses, companies must invest in rus disease (COVID-19), there’s supply chain technology that goes been a dramatic increase in that beyond tracking and monitoring waste, resulting in an unforgiving to provide environmental visibility financial toll on companies and that ensures products are secure, hidden health hazards for the end intact, on time and safely handled consumer. Properly managing the cold chain across land, sea and air. is a massive logistical effort. Drivers and dispatchers need to

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Industry standards and regulations play a vital role in cold chain management. Whether it be pharmaceuticals or food, the disruption or mishandling of cold chain cargo is a costly one. The Boston Consulting Group (BCG) estimates that 1.6 tons of food—the financial equivalent of $1.2 trillion—is wasted each year. The sum of this loss substantially reduces total global food production by one-third. It’s a staggering amount that demonstrates the true extent of the problem, which if left unchecked, could reach costs of $1.5 trillion by 2030. Temperature considerably impacts the quality and safety of perishable products. The U.S. Food and Drug Administration (FDA) Food Safety Modernization Act (FSMA) specifies procedures for cold storage, pre-cooling and cleanliness of shipping containers and trucks before loading and temperature monitoring during transit. To prove compliance, shippers must maintain temperature logs that validate there have not been temperature spikes during the entire shipping and storage process. With complex requirements for food safety during transport and storage and with limited time before inevitable spoilage, it’s no surprise that even the most well-regarded and established www.foodlogistics.com

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brands can be tarnished by illnesses information for less-than-truckload (LTL) and smaller shipments. The resulting from breaks in the cold sensor tags communicate with a chain. According to the Centers for telematics device installed in the Disease Control and Prevention container, which captures data in (CDC), one in six Americans real-time and logs it for auditing contract a foodborne illness later. every year. Of those, 128,000 are hospitalized and 3,000 die. Proper This approach provides not only cold chain food handling processes real-time information that cargo are the first line of defense against has maintained environmental this preventable tragedy. requirements, but also enables data-driven decisions to optimize The lack of visibility into the operations, lowering cost and waste causes of such events has been, continually. Real-time until recently, visibility changes the a problem that The BOSTON CONSULTING GROUP game by making it supply chain estimates that possible to re-route managers have TONS if necessary to avoid struggled to problems on the fly. solve with a For example, if a food cost-effective of food is wasted each year. shipment exceeds solution. Whether its temperature the problem threshold, it can occurs with be delivered to a closer market produce, freshly prepared foods, for faster sale to account for the meat or seafood, avoiding food shortened product life. spoilage through proper cold chain management is crucial to The cold chain maintaining quality, value and opportunity safety. Without visibility, losses of Technology provides business a product are substantially more and quality leaders with significant, as are the risks to actionable insights and the product safety and brand image. ability to proactively intervene if environmental conditions start to The game changer is deviate, impacting product integrity real-time visibility and safety. If temperatures inside Visibility solutions are crucial in a truck carrying fresh romaine reducing costly spoilage, both lettuce begin to deviate from in blue-sky times and periods of expected boundaries, drivers can disruptions. Deploying proper cold chain infrastructure for perishables be notified and asked to check the cargo door or the cooling system. can mitigate the problem of spoiled If a foodborne outbreak arises, the goods by $150 billion annually. produce can be swiftly identified Affordable, real-time monitoring and affected products isolated for of goods is now possible during further inspection. storage, multi-modal shipping, drayage and at every waypoint in Over time, real-time data and supply chain movements. The best insights can help businesses ensure solutions use intelligent sensors to product supply, shorten delivery provide consistent data about the times, improve product shelf life shipment’s location, temperature and expedite the shipment and and other environmental factors quality review process. Data-driven such as G-force, shock, humidity insights can also be used to improve and light exposure. These sensors supplier and partner relationships can be assigned to individual pallets and address vulnerabilities in the or cartons to provide discrete supply chain.

1.6

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In the cold chain, this may mean critical handoff points between suppliers and carriers, seaports or airport tarmacs, where visibility has traditionally been limited. The Internet of Things (IoT) and cloud technology now enable enterprises to collect data regarding their shipment lanes (ocean, air, road, rail), packaging, products shipped, suppliers and logistics partners used, enabling businesses to make informed decisions that improve efficiency and reduce product and operational waste.

The future of cold chain logistics As today’s global marketplace demands higher quality and an ever-increasing variety of products, the demand for logistics and shipping companies will only increase. Smaller, faster shipments and a growing body of regulations put pressure on companies to gain more real-time visibility to improve processes, reduce waste and spoilage and save money. Technological solutions are now available to track pallets and cartons rather than entire loads and provide a continuous stream of temperature, location and other environmental information. This data-driven approach can enable shippers of sensitive goods such as food to maintain cold chain integrity. As a result, in many cases, issues can be avoided entirely or resolved when they occur. This is the smarter, safer and more efficient cold chain needed to meet the growing global and on-demand marketplace.

ABOUT THE AUTHOR JEFF NEWMAN vice president, supply chain visibility CalAmp

OCTOBER 2020 | FOOD LOGISTICS

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COVER STORY

BY MARINA MAYER, EDITOR-IN-CHIEF

MITIGATING

RISK

IN THE COLD FOOD CHAIN

AIB International launched the Pandemic Prepared Certification, what is said to be the first certification standard created for the food and beverage supply chain that elevates critical planning for people, facilities and production.

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hen the Coronavirus disease (COVID-19) hit, nearly every facet of the food chain turned upside down. Now nearly eight months later, the aftermath is a domino effect of supply chain disruptions. “As the COVID-19 pandemic has evolved, the unlikely ‘real’ challenge of getting food and products where industry, and ultimately the consumer, needs it most raises many questions about the risks to global supply chains presented by the slowing of transport channels,” says Kimberly Coffin, supply chain director for Lloyd’s Register. “As China began shutting down in February, the absence of available truck drivers either due to illness or isolation led to an inability to unload containers of fresh/frozen foods. As those container numbers began to build, so did a shortage of electric connections to run critical temperature controls and maintain cold chain, thus presenting risk to the perishable foods awaiting delivery to consumers. Likewise, the slashing of international passenger flights has reduced available cargo space on aircraft, leaving global supply chains with significantly fewer options for expediting critical raw materials and highly perishable foods between countries.” “In a developed world where consumers expect ‘seasonal’ produce to be available in our supermarkets all year long and events of raw material shortage due to production demand change—albeit costly—can be fixed through expedited ‘air’ shipments within 24 hours, the acceptance of the new reality has been a wake-up call for many,” she adds. “And, what of the raw materials and finished products that become stuck in transit due to decreased access to normal shipping channels, port slowdowns, tighter border checks and an absence of truck and lorry drivers? The obvious answer is waste. Think of farmers mulching in harvested produce and dumping milk, unplanned production downtime in the manufacturing sector and the continued limited re-opening of the foodservice sector.” But, what didn’t falter was the urgency in mitigating risk along the line. That’s because ensuring food safety and quality control have been—and will continue to be—at the

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AIB International

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The COVID-19 pandemic presented a host of risk/security challenges to today’s cold food chains. Discover some of the technologies and strategies put in place to better mitigate risk, improve visibility and traceability and monitor farm to fork along the cold chain.

OCTOBER 2020 | FOOD LOGISTICS

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COVER STORY  The COVID19 pandemic could give rise to the next biggest case of food fraud since the 2013 horse meat scandal, if correct protocol levels continue to drop.

Lloyd’s Register

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global pandemic and the associated disruption it created in nearly every aspect of business operations worldwide,” says Steve Robert, global vice president of sales, marketing and innovation, AIB International. “The AIB International Pandemic Prepared Certification is a proactive measure to help companies across the supply chain prepare for the future with the only best-in-class protocol benchmark.” This prescriptive and practical certification provides the food and beverage supply chain with pandemic crisis management, supply chain management, intermittent operations planning management, health crisis mitigation measures and management and pre-requisite program review. “During the pandemic, supply chains for some ingredients and products have been disrupted. The resulting shortage opens more opportunities to gain profits

in any way possible, including the heightened risk of food fraud. This can include any of the seven types of fraud, such as substitutions, dilutions or counterfeiting. Mitigation strategies to ensure accountability of the supply chain are vital,” adds Allie Sequera-Denyko, quality manager, North America, AIB International. “Our Pandemic Prepared Certification is a proactive measure to help companies across the supply chain prepare for the future with the only best-in-class protocol benchmark. Once certified, it provides assurance for the food and beverage supply chain and consumers that your company is committed to establishing and maintaining best practices.” AIB International also offers

AdobeStock_212489628

 Regardless of what the future holds, companies will still need to continue mitigating risk in the cold chain.

forefront of every company’s plan of action. For instance, several companies took a great deal of measures to implement procedures and standards that elevated food safety and quality assurance. In July, the Federal Drug Administration (FDA) launched the New Era of Smarter Food Safety Blueprint to help “ensure food safety and prevent foodborne illnesses through the use of science and risk-based standards.” The blueprint focuses on enhanced traceability, smarter tools, new business models for the production and delivery of food and a new culture of food safety. For its part, AIB International launched the Pandemic Prepared Certification, what is said to be the first standard created for the food and beverage supply chain that elevates critical planning for people, facilities and production inputs and delivers significant social impacts, builds bottom line resiliency and unlocks insurance benefits. “We developed the Pandemic Prepared Certification because the food and beverage supply chain were ill-prepared for a

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COVER STORY virtual Food Fraud: Risk Assessment and Mitigation seminars and various online and virtual food defenses courses to help operations raise their standard for food safety, while reducing risk. The Federal Motor Carrier Safety Administration (FMCSA) rolled out a finalized rule for enhanced trucking hours of service flexibilities and suspended hours-of-service rules for qualifying deliveries to moderate available trucking capacity and ensure the safe, timely movement of goods during a time of national need. And, the Consumer Brands Association (CBA) brought together 23 consumer packaged goods (CPG) companies and retailers to launch the Contactless Delivery Task Force to develop scalable, uniform standards for safely transporting and exchanging freight. Transferring from a paper delivery verification system to a digital platform provides safety, productivity and visibility benefits to every employee involved in bringing a product from a manufacturer’s warehouse to the store shelf. “COVID-19 challenged CPG companies to keep their supply chains moving efficiently and their workers healthy in a tremendously difficult environment,” Tom Madrecki, vice president, supply chain and logistics for CBA, said in a press release. “As CPG companies identify ways to increase supply chain efficiencies and ensure employee safety, electronic delivery verification through a contactless pick-up and delivery process is a natural solution.” Aside from the many movements and procedures implemented to shore up risk and control, the COVID-19 pandemic still presented a host of risk and security challenges to today’s cold food chains. That’s because risk mitigation is more than just enforcing food safety. It’s about protecting the manufacturing lines and gaining vis-

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ibility into every step of the cold chain. Mitigating risk effectively takes more than just enforcing procedures. In fact, the effects of the COVID-19 pandemic could give rise to the next biggest case of food fraud since the 2013 horse meat scandal, if correct protocol levels continue to drop, according to Lloyd’s Register. For instance, businesses should ensure they use suppliers that have been verified according to international standards. “Using local sources also provides benefit to the ‘home’ economy, and should product failure occur, the ability to act swiftly to investigate and implement control is more accessible,” says Sequera-Denyko. It’s also beneficial to identify, test and verify alternative logistics providers to ensure their routes don’t present added risk to traceability or cold chain compliance for perishable foods. “Increasingly we are seeing global food retailers using food delivery platforms designed for home delivery of restaurant meals,” adds Sequera-Denyko. “Although this seemingly provides a quick pivot and ability to increase distribution volume, the question remains regarding how well critical food safety factors in relation to hygiene and cold chain management are understood and applied to ensure risks to product integrity are being effectively managed.” Other challenges stemming from the COVID-19 pandemic relate to the sudden shift in demand for fresh produce. “Retail sales were instantly up 20-25% on fresh produce and down significantly on floral. In foodservice, demand dropped by 75%. Online, direct-to-consumer shipments were up by 300-400%. The risk was in the execution. If we were not able to respond quickly to the change in

demand, people would have gone without fresh fruits and vegetables,” says Ed Treacy, vice president, supply chain and sustainability for Produce Marketing Association. “Our industry did a tremendous job in shifting the total supply chain to ensure the product was where it was now needed. Forecasting demand for shipments of produce and floral was difficult, forecasting the growers’ planting schedules was extremely difficult with little or no historical data to base the forecast on. The fresh produce industry came together very quickly to ensure that the shift in demand did not result in people not being able to purchase fresh produce.” On the manufacturing and design-build side of the business, some companies were challenged simply due to the health and well-being of employees. “The supply chain is human based—truck drivers, forklift operators, etc. Humans are a critical element and need to be protected to prevent disruptions,” says Pablo Coronel, director of food processing for CRB. “In the cold food chain, resiliency and ability to adapt for the needs of the consumers is critical.” One of the bigger problems cold supply chains face is a shortage of human capital, according to Niranjan Kulkarni, director of operations improvement for CRB.

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“An increase in operator absenteeism due to actual infections, childcare issues associated with daycare and school closures or even fear of contracting the disease has a severe impact on production and transportation capabilities.” What’s more is, because of COVID-19, the FDA temporarily discontinued on-site audits, forcing cold food processors, growers and packers to enforce food safety in other ways. “The biggest change we have seen since the start of the pandemic is that cleaning and sanitizing has dramatically increased at all levels of the supply chain,” says Sequera-Denyko. “Beginning in late July, FDA resumed on-site inspections, so it is important for operations to assess their plans and practices to ensure that nothing has

“Food and beverage supply chains rely heavily on human involvement. Production operators, delivery truck drivers, agricultural workers, meat processing employees, etc.; all are needed to run operations, but because their presence is required, they have an increased chance of exposure to the COVID-19 virus,” Kulkarni adds.

lapsed in the past few months.” Traditional face-to-face, on-site audits provide the optimum environment for assessment of the food supply chain’s continuing compliance of operational activities and food safety controls from farm to fork, adds Coffin. “From a remote desktop, independent assessment of critical evidence, e.g. supply and operational monitoring records, product test results, staff training status and internal audits by a qualified auditor bares no difference to the activities that form the starting point for on-site food safety audits,” she adds. “The question of assessment quality of site conditions, personnel practices and GMP compliance via virtual/remote audits is one that has gained much scrutiny, and in some instances, direct opposition to the use of technology. Through our

 Supply chain and production planning functions are now utilized weekly or monthly to assess what products to manufacture and when.

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Are you prepared for post-COVID supply chain changes? Visit our COVID-19 page for useful articles and resources to help you navigate the future.

Cost and waste reduction

Visibility

Risk mitigation

Analytics

Learn more: controlant.com/covid-19 Contact us: contact@controlant.com

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Follow us @Controlant on Twitter and LinkedIn

9/30/20 8:43 AM


COVER STORY  Sharing data on blockchain networks like IBM Food Trust creates end-toend visibility along the supply chain.

Technology tackles food fraud When it comes to mitigating risk, improving traceability and even monitoring farm to fork along the cold chain, there are an array of technologies that come into play. “As you look at digitizing and automating your supply chain, there is opportunity for distributed ledger or blockchain technologies to help access data very quickly; it will let us know exactly who has it, where it is or who has touched the product,” says Angela Fernandez, vice president of community engagement at GS1 US. “RFID is another technology being utilized in a way that users can get automatic visibility without having to physically go to the item. We’re seeing that inside of distribution centers as well as back-of-house operations, whether you’re talking about retail or foodservice. We also see the use of sensor technologies being driven as another technology that informs

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and provides analytics into the overall view of the supply chain operation.” “We’re seeing this trend happen because it’s in that mindset of understanding full visibility from farm to fork,” she adds. “If I’m able to monitor and have real-time visibility around the movement of the product, it also enables me to be more proactive than reactive should something happen that we didn’t anticipate on, like the pandemic and needing to divert and re-route product. Is the condition suitable? How much time do I have left on it? Where is it exactly?” In fact, blockchain is one of the leading technologies for improving visibility and traceability in cold food chains, says Paul Chang, worldwide blockchain lead for distribution and industrial markets for IBM Blockchain. “Companies that are sharing data on blockchain networks like IBM Food Trust can create end-to-end visibility into where their product came from and where it ended up, which has numerous advantages. For example, during a foodborne illness outbreak, grocers can identify which batches of produce came from farms that were impacted within seconds, so they don’t have to waste inventory that is still safe. Sensors can collect temperature data, so that retailers and consumers further downstream in the supply chain can know reliably how long food will be fresh because this information has been recorded on an immutable blockchain. Using other technologies like AI, we study the data being recorded on blockchain and make better predictions about things like demand and shelf

IBM

experience, using livestream video technology on farm and in factories, we have been pleased that many of the expected compromises were not apparent and high-quality audit outcomes, including the identification of non-conformities, achievable. In some respect, the ability to capture evidence of both good and poor practices through image capture and immediate discussion with auditee proved to enhance the audit process and final reporting.” Furthermore, FDA’s Food Safety Modernization Act (FSMA) was implemented as a risk-based approach to food safety to help in extreme situations like the pandemic, says Coronel. “All processors must have food safety plans, which are developed to mitigate any possible risks. As such, the application and enforcement of these plans provides a good measure of safety in current times when the FDA isn’t doing on-site audits,” Coronel adds.

life,” Change says. “The COVID-19 pandemic caused a massive shift in consumer behavior. But, the problem wasn’t necessarily that the pandemic reduced the amount of food in cold supply chains; it was that the supply chains weren’t agile enough to adapt to disruptions quickly enough.” Additional technologies revolve around “smart” packaging, which proves product integrity in respect to product transport and handling conditions across the supply chain via visual representation such as a color change label or QR codes. “Whilst this does not necessarily provide the real-time data of product assurance and intervention, it does allow for removal from supply at the retail/consumer level,” says Coffin. “Additionally, remote verification via electronic checklists/monitors using common handheld devices such as smartphones and apps can provide added assurance for organizations looking for increased confidence that the expected transport conditions and routine checks are being completed as required. Furthermore, the use of this verification technology can be expanded to manage and mitigate other risks related to logistics and product movement, but not unique to the cold chain such as product authenticity and product security. This simple technology not only moves food safety/product integrity checks into a ‘digital’ framework, but also provides for real-time notification if an expected check

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is out of compliance and/or not completed.” Likewise, routine activities should include “horizon scanning.” “An example of increasing risk of fraud could be the situation we are in with the pandemic, which has created additional opportunities and incentive for fraudulent activities,” says Sequera-Denyko. “As you scan the horizon, are you prepared for the next pandemic or other potential disruption to your supply chain?” Other technologies that proved to be beneficial were transport management systems and truck routing systems. “There were a lot of trucks redirected on a moments’ notice and delivery plans had to be constantly updated, as the retailers and wholesaler distribution centers were initially struggling to get the trucks unloaded due to the sudden

unplanned spike in demand,” says Treacy. Technology aside, how can companies better identify risks in the supply chain? “Companies can review what worked and what could have worked better during the first few weeks of the pandemic,” adds Treacy. “We saw some partnerships form very quickly between companies that needed and those who had capacity in labor, transportation equipment, material handling equipment and refrigerated warehouse space. There can be lessons learned from how that was implemented. We saw foodservice distributors providing product, service, equipment, labor and warehouse space to retailers who needed it.”

Future for risk mitigation The challenge with planning for the future is that no one knows what that future even looks like. The post-COVID-19 environment will still test supply chains’ resiliency. It will continue to force the industry to revamp processes, procedures and technologies to move cold food and beverages through the chain in a safe, timely and efficient manner. Regardless of what the future holds, companies will still need to continue mitigating risk. “The hard question is how do we recover? How do we get back to normal? What does the New Normal look like? I mean, these are questions we all have,” says Fernandez. “And, on top of that, quite honestly, we’re all kind of bracing for the second wave that hasn’t come yet. We’re still in a state of uncertainty. [The future is]

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COVER STORY about supply chain resilience, getting back to the agility that you have in your operations to move with the changes that we see in demand and being able to adequately anticipate for the changes we know are coming. So, let’s make things less manual. We have to look at automation because digital is here to stay. This is how we as consumers are purchasing our cold chain food items today and will for the foreseeable future. And, making sure that we’re able to optimize our shipments and be able to divert them as we continue to see changes in demand through this pandemic.” “While it is hard to look at investments while we’re just trying to get our companies online at a level that they should be, I would recommend that we don’t omit to that view,” she adds. “Because I think as we look at where we’re headed and the need for digitization, we need to see where we can make those leaps to make those improvements. And, if we have cold chain companies that have not been deploying or minimally deployed some of that sensor technology, that’s probably going to be an area we want to focus on because that is a key part of the equation.” The industry can also expect to see increased transparency in food supply chains post-pandemic. “Transparent supply chains inspire more and are more resistant to disruption because there is a clearer picture of the availability and location of goods,” says Chang. “Retailers and producers both get more information about their products and use that information to adapt in real time to changes in the market.” Furthermore, supply chain and production planning functions have moved from being long-term forecasts based on historical demands and consumer buying patterns to being utilized weekly or monthly to assess what products to manufacture, says Coffin. “With decisions focused not on what to manufacture but ‘how’ to manufacture volumes required using the materials on hand/ accessible whilst maintaining productivity and efficiency of operations,” she adds. “The continued demands on raw material sources, identification and approval of alternative suppliers as well as just the logistics of getting materials to where they need to be will... still rely heavily on the how for some time to come.”

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TOP 5 RISK MITIGATION STRATEGIES

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ere’s a Top 5 list of strategies cold food companies are encouraged to implement today in order to mitigate risk in the future.

1. Reduce gaps between demand and supply in the food chain. “The initial wave of panic buying at the outset of this pandemic led to a sudden spike in demand for several items,” says Niranjan Kulkarni, director of operations improvement for CRB. “Implement product rationalization to reduce the number of products/SKUs, thereby freeing up production capacities where needed. Balance manual vs. automated operations. The right balance between automation and manual activities can provide production flexibility, especially when food supply chain disruptions occur. Manage your safety stock. Increasing raw material safety stock seems like a straight-forward solution to mitigate risk, however, it can become expensive and ineffective, especially when food supply chain disruptions are longer than anticipated.”

2. Don’t overlook equipment maintenance. Without proper maintenance, unplanned equipment downtime or stoppages are likely to increase, adds Kulkarni. “This can hurt your company’s bottom line. But, the consequences would be even more severe if it impacts customers and end-users at a critical time in recovery,” adds Kulkarni.

3. Collaborate with supply chain partners by sharing data in a secure, permissioned way. “By sharing data with vendors and suppliers, all parties in the supply chain can access the same trusted data pool in order to make decisions about their business. This can give producers a better understanding of which products are being sold to consumers and adjust their production accordingly,” says Paul Chang, worldwide blockchain lead for distribution and industrial markets for IBM Blockchain. “It also reduces the number of disputes that arise from trying to synchronize data from separate sources. And, without high-quality, trustworthy data, other technologies you may wish to implement won’t be nearly as powerful.”

4. Prioritize transport of perishable fresh farm products through the supply chain and link to alternative markets and customers to ensure ongoing production capacity remains viable, prevent future food shortages and minimize the impact of food waste, says Kimberly Coffin, supply chain director for Lloyd’s Register.

5. Cleaning and sanitizing should always be at the forefront, pandemic or not. “Some of the FDA’s most consistently recognized violative conditions involve sanitation,” says Allie Sequera-Denyko, quality manager, North America for AIB International. “Implementation of an effective and audited sanitation program for your operation will result in fewer recalls, fewer customer complaints and a stronger brand.”

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3PL & REFRIGERATED LOGISTICS

BY BRIELLE JAEKEL, ASSOCIATE EDITOR

3PLS SUPPORT

RESILIENCY IN FOODSERVICE DURING PANDEMIC The upheaval caused from the Coronavirus pandemic required 3PLs in food to assist in major operation pivots.

 3PLs are responsible for the safe transportation of ingredients and food.

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oodservice is an integral the case but in a much different aspect of the economy and landscape. food industry throughout the “In foodservice, their model is United States, making up $969.4 designed to around the 80/20 billion of the $1.77 trillion food rule—80% of sales comes from 20% industry in 2019, according to of SKUs,” says Todd Avery, chief the United States Department of executive officer, McLane Global. Agriculture’s Economic Research “3PL’s role is to help foodservice Service. distributors manage the other 80% of those And, third-party logistics slower moving but companies (3PLs) work to In foodservice, necessary SKUs. provide the safe shipment their model is of ingredients and products. designed to around At McLane Global, we not only store Throughout the past few the 80/20 slower moving years, 3PLs in foodservice rule—80% of those SKUs, [but] we dealt with many different sales comes also manufacture obstacles and trends such from 20% of and source those as growth in digitization SKUs” unique products. and labor shortages. This comprehensive Beginning in March, Todd Avery, CEO, McLane Global. model relieves space, the new challenge of inventory control the Coronavirus disease and capital tie up (COVID-19) arose and in inventory for our foodservice possibly impacted the foodservice customers. With our strategically sector the most. located warehouse and with our The foodservice industry may contracted transportation services, look very different post-pandemic, we are able to service all parts of but prior to the outbreak, a 3PL’s the country within one service job was to move SKUs so that day, in most cases. This is the same partner companies could focus process that we apply to our retail on selling rather than the logistics and e-commerce customers. We details. receive, store, manage inventory Moving forward, this will remain

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for, pack and ship for a variety of foodservice customers who don’t have the infrastructure in-house to do what McLane Global does.” This decrease in infrastructure and interest in lowering costs pushes sellers to work with 3PLs. “I feel that foodservice is moving toward the idea of using 3PLs more than ever to lower their cost of transportation and labor,” says Mike Saoud, co-CEO of FreezPak Logistics. “This also lets our customer concentrate on what they do best—sell their products.”

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A pandemic’s influence Throughout the shelterin-place orders that began in March and April, one of the hardest hit sectors was foodservice as restaurants, schools and other forms of public gatherings where foodservice would be provided shut down. However, 3PLs and food distributors pivoted to serve the needs of the communities and keep businesses moving. Then, a great

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shift in product demands occurred. “At the start of the pandemic, we saw a portion of our 3PL foodservice customers’ business go to zero with restaurants, schools and other foodservice outlets closing

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their doors,” says Avery. “However, not all foodservice sectors slowed. There was a sharp shift in demand to the medical and institutional customers, which we were well positioned to supply with gloves, masks, hand sanitizers and cleaners. We also experienced a rapid move from larger cafeteriastyle

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prepared meals to individual, shelfstable meals. Our experience with hunger relief organizations allowed us to almost immediately provide shelf-stable meal kit options to support these The customers. environment is This helped just so tough to provide a distribution work in. This is pipeline to get why FreezPak food out the has shifted door safely gears toward and quickly. automation. You see similar Mike Saoud, co-CEO, FreezPak Logistics. practices with airlines. “Once things began opening again, we saw business rapidly increase unexpectedly,” he adds. “Foodservice customers were finding new, unique avenues for business to supplement the losses in their traditional channels. Overnight, we saw roughly an immediate 50% rebound in volume. We have steadily seen that inching closer to pre-pandemic levels in recent months as some of the more traditional lines of business have opened back up.” Numerous 3PLs and distributors determined new ways of business during and after the lockdown, with many varying approaches. “McLane Global is unique in

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need to adapt,” says Stacey Walker, director of logistics and technology, McLane Global. “Many of them shifted more into retail channels to respond to the growing consumer demand on shelf. We have worked with a number of our customers to repack in units that work well for club and retail channel accounts, allowing them to still do volume business while other traditional business channels recover.”

Technology evolution Automation has been a beneficial investment throughout the pandemic, as social distancing requirements arrived, reducing the number of employees that can work in close relation. For its part, FreezPak has invested in automation over the past few years, allowing it to focus on automated storage and retrieval systems, Saoud says. Moving forward, the 3PL plans to increase this focus on technologies in new facilities and recently upgraded software on the dock to decrease waiting times. Additionally, a labor shortage in existence before the pandemic pushes 3PLs toward automation even more. “Labor has become a huge issue, especially in the cold storage space,” says Saoud. “The environment is just so tough to work in. This is why FreezPak

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 3PLs support foodservice enterprises amidst the Coronavirus pandemic.

that we also with work numerous retailers across the country through our U.S. sales and manufacturing division,” Avery says. “So, when the core business for foodservice plummeted, our 3PL team partnered with our sales force to help our foodservice customers identify alternative opportunities like retail and club channels to keep business going. And, since we already store their products at our facilities, we were able to use our kitting teams to quickly work on new configurations to get our customers’ products out the door.” While many distributors went straight to direct-to-consumer options, others worked with retailers to serve the food industry. Saoud explains that the 3PL shifted gears toward the retail sector to fill the gap left from foodservice during shutdowns. Meanwhile, others focused on the retail channel to support the shift in consumer needs. “Our 3PL customers knew they would

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has shifted gears toward automation.” While COVID-19 opened up 3PLs’ eyes to the necessities of automation, it also revealed a need to diversify. “Our foodservice customers saw their business stop overnight when Coronavirus hit,” says Walker. “With all the uncertainty in recent months, common concerns we’ve been managing are issues such as shelf life of product that would normally move at a much more predictable rate. 3PLs, like so many businesses today, really need to diversify and explore various avenues of business to better weather

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significant impacts such as those caused by the Coronavirus. When you have a deep, working understanding of how various channels of business work in logistics, you can actually present cross-channel opportunities to your customers and help them grow their business. That’s when you’re really building a partnership with your customers.” Regardless of how long the Coronavirus outbreak subsides in the United States, the foodservice industry and its 3PLs will remain forever changed.

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“Obviously, the pandemic has had a significant impact on foodservice customers,” says Avery. “I think this pandemic has exposed some real deficiencies and inefficiencies in the supply chain, and in foodservice in particular. I do not see the industry ever going back to their old practices. Some of the changes we expect to see are better inventory control, leaning

more on 3PLs like McLane Global to mitigate the risk. I believe you will see a reduction in SKU variety and a shift to more private label products. And, I think you will see some new contracts that will require 3PLs to hold minimum stocks for foodservice distributors for future emergency purpose as an insurance policy. With all that said, we anticipate seeing the

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 3PLs help foodservice distributors manage slower moving, but necessary SKUs.

Because

FRESH Matters Food Logistics magazine is the go-to resource for the latest information executives need to manage the complex business and technical issues involved in moving product through the food supply chain, including

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traditional channels come back to more normal levels as various areas of the country continue to re-open. What we predict moving forward will be a combination of that traditional business blended with the ongoing new channel opportunities, so our customers will be more diversified and more agile moving forward.” As more foodservice areas open and the pandemic continues to subside, foodservice operators evolve and adapt to the new obstacles that arise. Automation grows within the logistics process, and 3PLs become more prevalent. The sector still remains strong, but is greatly changed, with new priorities in focus for both distributors and 3PLs.

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SECTOR REPORT

WAREHOUSING

BY BRIELLE JAEKEL ASSOCIATE EDITOR

 saf

WEARABLES IN THE

WAREHOUSE Voice assistants and wearable technologies expand from the home into the warehouse.

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n the past few years, many consumers now think of voice assistants and wearables as an ubiquitous part of their personal lives, but these technologies are also prevalent throughout the warehousing space. In food warehouses, voice picking technology and wearables augment numerous tasks for workers, as the hardware and software in these systems grow in sophistication as well as availability. “Voice picking technology is very advanced today,” says Thierry Mole, logistics practice director at Symphony RetailAI. “There are a wide variety of solution providers with competitive technologies, so as a result, a few key trends have emerged within the voice picking industry. Today, almost all devices are Android, but just a few years ago, Windows was the main provider. This shift has increased the number of devices offered, which lowers the cost of acquisition. “Additionally, new IoT

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KINETIC Inc.

by triggering AMR workflows,” technologies are now compatible says Stefan Nusser, chief product with voice picking solutions and officer at Fetch Robotics. “For can improve and simplify the example, simple integration with a process for the picker,” he says. voice picking system like Vocalect “A variety of IoT solutions are enables a warehouse associate to currently available, including drop a cart at the end of an aisle connected glasses, digital tags and then speak a command that the and technologies that support voice system will pass to the AMR automatic positioning such as system, and then gravity, WiFi and beacons.” New IoT trigger an AMR The more artificial intelligence technologies to go pick up that evolves, the more advanced voice are now cart and take it picking and wearables become. “One big trend is the AI-centric COMPATIBLE to another zone WITH VOICE for other items approach to wearables,” says PICKING needed for orders Charu Thomas, founder and CEO, SOLUTIONS on the cart or take Oculogx. “Earlier companies that and can improve the cart packout. built their backs on wearable and simplify the “Similarly, technology were building process for the a warehouse ‘assistive reality’ technology, picker. associate can also but with advances in AI, true use a wearable augmentation is possible.” scanner to do the As the level of capability same thing,” he says. “A barcode grows in voice, it also does in placed on the floor at the end of an artificial intelligence (AI)-enabled aisle or on the racking of the aisle robotics, which allows the two to is associated by the AMR system come together for an extremely with a specific workflow. The optimized experience in the associate simply scans the barcode warehouse. of the workflow he or she wants “One trend we are seeing is triggered, and an AMR will pick up using those same devices to direct the cart and take it to the location autonomous mobile robots (AMRs)

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specified in the workflow. There can be multiple barcodes each labeled with the workflow that will be triggered. In either case, this functionality enables warehouse associates to use the devices that they use every day and also allows them to spend all of their time doing productive work instead of 50% of the time manually moving material all over the warehouse. “Another trend is to leverage the picking optimization (WESlike) engines of voice systems and optimization engines associated with heads-up display devices to not only provide pick path optimization for the associates, but also orchestrate the AMRs,” Nusser adds. “An example of a voice picking system that will do this is Voiteq, and an example of an optimization engine that leverages heads-up display devices is Zebra FulfillmentEdge. With both of these systems, the optimization engine will tell the AMR system to have a new cart waiting for an associate at the end of an aisle before the associate gets to the end, and then will automatically take the cart that the associate dropped off to a new zone or to packout without the associate having to do anything. While this is great for each picking, it is especially a great solution for pallet building, as the warehouse associate can leverage both hands to pick cases to a pallet.”

pervasive nature of these systems lowers the initial investment cost, this can create other issues. “The biggest pitfall is the sheer volume of voice picking solutions on the market,” Mole says. “There are a wide variety of Android devices, plenty of new technologies and a plethora of automation options. This creates a more complex environment in comparison to the previous landscape characterized by one unique device and a single software provider. However, there are still opportunities for voice picking. In some countries, growth for automation is limited within logistics. McKinsey estimates that

KINETIC Inc.

Decisions and implementation These systems alone or combined offer an advanced warehouse that, when done correctly, offers a positive work environment, greater operation efficiency, less room for error and significant return on investment. However, the implementation of advanced technological programs and hardware offers its own challenges. For instance, while the

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investment. This challenge among voice picking solution providers might encourage future collaboration rather than competition.” The decision on which technology, provider or program to choose is daunting, but the tough tasks do not end there. The implementation process of the actual technology into a warehouse’s operation is another crucial aspect of adopting new systems such as voice picking and wearables. “There are a few challenges companies face when deploying wearable technology,”

investment in warehouse automation will grow at the slowest pace within logistics, about 3-5% per year through 2025. In less logistically mature markets, there could be even fewer opportunities for automation. Another pitfall is the race to invest in the right technology. It can be difficult to decide which solutions will yield the greatest return on

Thomas says. “The first is user experience. Wearables can offer significant improvements in efficiency compared to mobile or handheld technologies, but these savings can only be invoked when creating a seamless onboarding process and workflow. For Oculogx, it’s why we built an on-device training module to enable users to get started within

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SR: WAREHOUSING minutes of picking up the device. Another challenge is deployment vision.” Wearables are a great tool, but it is key for warehouses to have a roadmap in how these technologies fit into existing operations,

. Inc IC ET N I K

 Toggle between information stored on the device ranging from high-risk postures to steps to goals set by the company.

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Thomas says. Companies must focus on ROI and time-to-scale when it comes to devising successful pilots and proof of concepts. “One pitfall is trying to just fit an AMR into an existing workflow as opposed to optimizing the workflow now that there is an AMR in place,” adds Nusser. “This does not mean you need to change the facility layout—most companies actually leverage AMRs because they don’t typically require changes to the facility. “However, there will be workflows that exist in the past that need to be amended without changing the facility,” Nusser says. “A good example of this is pallet building. This is typically done with a person moving around a

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rider pallet jack and loading cases onto a pallet so that it is a 1:1 ratio of associate to pallet jack. If you implement an AMR for case picking, you can switch to a zone pick as the AMRs will show up and wait for a case or cases to be loaded before heading to the next pick. In most cases, you don’t want to implement the same case picking workflow as you had before and have a person follow around an AMR. This enables an associate to handle more pallets as they can stay in zones and load cases onto many pallets. This is the case whether you are leveraging a voice picking system or an optimization engine that is associated with vision picking. “Another potential pitfall is using robot-specific optimization software instead that does not work with existing wearables or voice,” he says. “Some AMRs have optimization that is specific to each picking and also has built-in displays and scanners. This means that the customer will not be able to leverage its existing investment in voice and wearables, it will not be able to direct AMRs using voice and wearables and it will not be able to use these devices across all workflows—each, case and pallet picking.” In addition to implementation and use issues, privacy and data is also at play. In personal lives, privacy in relation to digital devices is top-of-mind, but for a business, this becomes even more crucial. “As more companies consider wearables, they face the apprehensions often associated with them—privacy and data collection concerns, ensuring workers wear the devices and cost,” says Haytham Elhawary, CEO and co-founder, KINETIC, Inc. “However, these hurdles are increasingly easier to overcome as the use case for keeping

workers safe during COVID-19 is obvious to, and even embraced by, employees who willingly wear the devices for their protection. And, when the investment for immediate needs is considered alongside the long-term injury-reducing value of wearables, the cost is actually lower than the return on investment.”

Beyond COVID-19 During the Coronavirus disease (COVID-19) pandemic, technology in the supply chain thrives, as it keeps individuals connected and maintain social distancing. This remains true with voice picking and wearables in the warehouse, as employees become more comfortable with the technology to keep them safe and allow them to continue their jobs. “The use of wearable tech was increasingly common in the warehouse space prior to COVID-19, and since the onset of the virus, is significantly more prevalent,” says Elhawary. “This real use case has driven demand for units in the field, and we’re seeing companies deploy up to three times as many wearables in the workforce than before COVID. “The current

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demand is largely because the pandemic has intensified the labor shortage challenges warehouse operators have always faced,” says Elhawary. “But, also is a result of the need for wearables among an entire workforce—not just those focused on intense physical labor. With their new social distancing and contract tracing capabilities, wearables can immediately benefit all employees. The devices reduce disruption, protecting workers from illness as well as injury, so employees stay safe and operations can keep running. “Furthermore, the perception around wearables is changing among warehouse workers. In the past, they viewed the devices with curiosity, but apprehension,” he says. “Amidst this pandemic, workers are now reporting they’re grateful for a tool that helps keep them safe. And, they’re appreciative of their employer’s investment in their health and wellbeing during a time of such uncertainty. “As COVID-19

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continues to disrupt warehouse workers and operations, the demand for wearable tech will just continue to rise,” adds Elhawary. “And, as more and more workers get used to wearing the devices and form new habits around them, the closer wearables will move to becoming mainstream in this space. Eventually, we’ll turn the corner on this disease and social distancing and contact tracing will not be as big of a concern. When this happens, wearables will remain on-site as part of a company’s safety culture, continuing to reduce injuries, retain workers and increase productivity. The pandemic is simply accelerating the incorporation of technology into the industrial workforce as a means of keeping workers safer, and making them more productive and their work more rewarding. Companies implementing wearables now will have a long-term advantage over those who don’t. This augmentation of the workforce with technology vs. the further-out replacement of workers with automation is the near-term opportunity companies should adopt to win.” Beyond COVID-19 and 2020, voice technology and wearables in the warehouse will likely grow to create an even more optimized  Technology implementation helps increase safety.

workspace. “I think the future involves more of a system-wide optimization of warehouse tasks based on transportation schedules and other external factors instead of isolated pick optimization simply based on orders being sent out of the WMS,” says Nusser. “An example of this would be prioritizing picks for a specific order based on trucks leaving the warehouse and sending the priority pick info to devices being used by associates while also orchestrating AMRs accordingly.” Automation technology continues to transform the warehouse and logistics process, and along with it, the day-to-day tasks of a supply chain employee. As humans and machines work together, a truly optimized warehouse becomes more of a reality.

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OCTOBER 2020 | FOOD LOGISTICS

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SECTOR REPORT

TRANSPORTATION

HOW MOVEMENT FLY OF PERISHABLES CONTINUE TO HIGH

L

Americas came to a halt. This, as well as the reduction in cruising, traveling and dining out affected the demand for fresh produce and flowers. In June, the capacity between Latin American and Europe was still down 80% yearover-year. There has been a slow recovery over the last months as the restrictions begin to lift and demand begins to increase. Keeping grocery stores stocked with fresh produce is the main driver of demand, while restaurants increase orders as they begin to slowly open up. To maintain its integrity, fresh produce is often transported via air to ensure prompt, reliable transit. When COVID-19 provoked a lot of challenges to the air freight industry, Latin American produce exports felt a dramatic impact. Sparked by most airlines grounding almost all of To address the need for additional air freight capacity from Latin their passenger America to Europe, third-party logistics providers and other supply flights, air freight chain stakeholders introduced charter flights. capacity dropped significantly, leaving the limited number of cargo aircrafts as the only option. Due to the reduced consumer demand of fresh produce, cargo aircraft only (CAO) operations between Miami and Latin America as well as Europe

To maintain its integrity, fresh produce is often transported via air to ensure prompt, reliable transit.

atin America has a long history of serving as the garden for Americas and Europe, but Asia has also been increasing its hunger for fresh produce from Latin America. The crisis around the Coronavirus disease (COVID-19) has definitely had its impact on this industry, with a significant spike in supply chain disruption during April and May. During this time, countries worldwide addressed unexpected lockdowns and unprecedented restrictive curfews, which directly impacted manufacturing and trade, including that of fresh produce. Research from the InterAmerican Development Bank indicates that during these two months, there was a drop of nearly 40% in export volumes from Latin America year-over-year. During these two months, almost all leisure activities within Europe and the

Dachser Americas

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and Latin America met demand, but at much higher rates. The reduction in capacity meant only certain in-demand, usually high-yield products, including fastmoving consumer goods, among other items, continued to fly on the planes between Europe, North and South America. And, although not considered expensive or high-yield, specific perishables were in such high demand that they continued to fly. These key perishables included mango kent, ginger, berries, avocado, fresh fish and a substantial amount of flowers. Some produce exporters began to look at alternatives to air freight, including atmosphere-controlled reefer ocean transport. In fact, Peru is shipping 100 containers of asparagus per week to Miami. That said, many found there were challenges with this solution that impacted the timeliness of the transport. Equipment issues, meaning access to the right reefer at the right time, combined with ocean freight disruption often did not provide the timely, reliable transport necessary to keep the fresh produce integrity intact. To address the need for additional air freight capacity from Latin America to Europe, some third-party logistics (3PLs) providers and other supply chain stakeholders introduced their own charter flights. Some were designed as a one-time solution while others continue to fly weekly. Looking ahead, the key question will be—as demand for produce as well as other industries continue to increase and compete for air freight capacity, how will it meet demand? For now, the available capacity, mainly supported by CAO operations, handled the lesser demand, but what will happen during peak produce season when there is a surge in the supply of produce as well as an increase in

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demand, and the limited number of freighters are pulled away to serve commodities with better yields?

Degree of air freight capacity varies throughout the Latin American region Utilizing all tools available, including dedicated charters, Dachser experienced strong and steady air freight capacity in and out of Mexico. In terms of the seasons, mango and vegetable exports could count on a rate level similar to the years before. The only area within Mexico struggling with capacity is South Mexican produce, which originally was uplifted via Cancun, which faces capacity challenges similar to many Latin American countries, including Dominican Republic, Ecuador, Costa Rica, Panama, and Guatemala. Since they do not have their own sovereign airlines, they depend on others to provide capacity, which may not be possible with closed borders and other restrictions. Mexico starts a strong avocado season as there is a gap in supply in Europe, especially since Colombian avocado season did not provide sufficient supply to the market. While there is an initiative in place to charter a ship to transport berries and avocados with a decreased transit time of 14 days, Mexico is poised to have sufficient air freight capacity. The country has eight international airlines with freight and wide-

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body operations, which provide consistent capacity and the ability to transport large shipments via air to Europe. Unfortunately, no one can predict when the vaccines or other solutions for COVID-19 will present themselves, nor do we know what the peak season will bring. Latin America farmers as well as importers and exporters of the region’s perishables hope that the current provided capacity will not be shifted elsewhere. This action will leave the crop to go to waste in Latin America while simultaneously create a shortage of supply around the world. The price for berries, mango, asparagus, avocado, vegetables and lemon is still manageable, but if the costs for transportation doubles or triples, the consumer may not be willing to pay. Farmers have invested in the crop, grown the produce and paid the employees, so not being able to export their produce would be the worse-case scenario for the industry. Fingers crossed that the airlines/air freight lines will respect the lanes established at a maintained price level. Otherwise, many farmers will face a very difficult phase not being able to sell their produce. Rich countries, such as Germany may be able to support their key industries by issuing bonds according to their good ratings. But, countries like Argentina may not be in the position to provide that type

of support or address the needs of the farmer, which is an individual who invests from his/her own pocket. Mexico can sell cross-border to its U.S. neighbor, but there are equipment shortages as the inbound market decreased due to closing of manufacturing in Mexico and the United States. What’s more, prices for boxes northbound are on the rise. The abundance of air capacity over the last years did open up new trade lanes and has encouraged investment into land and crops all over Latin America. But, it is likely that air travel will take years to come back to prepandemic levels, which affects capacity and rates as it relates to transport of fresh produce from Latin America to Europe or Asia. This puts many farmers in Latin America at risk, and many of them simply won’t survive this crisis. Yet, Latin America’s farmers and producers have seen many crises over the last decades, including wars, weather phenomena, such as “El Niño,” and plagues. The hope remains that demand will trigger the right decisions to provide solutions to the market.

ABOUT THE AUTHOR ENRICO BOEHME head of air freight, Mexico and Latin America Dachser Americas

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SECTOR REPORT

SOFTWARE & TECHNOLOGY

BY MARINA MAYER EDITOR-IN-CHIEF

THE FUTURE

OF TMS TECHNOLOGIES T

Here’s how transportation management systems are connecting today’s cold food supply chains from farm to fork.

Kuebix

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ransportation management systems (TMS) have been changing the cold chain landscape for quite some time. From tracking and tracing shipments to providing real-time transparency, the flourishing e-commerce industry, availability of the Internet of Things (IoT)-enabled solutions and the simplifying of supply chain processes continue to escalate the demand for TMS systems, according to IMARC Group. Case in point: The North American TMS market is poised to grow by $1.62 billion during 2020-2024, progressing at a CAGR of 9% during the forecast period, according to a Technavio report. Research from Odyssey Logistics & Technology shows TMS plays a critical role in increasing shipping transparency, improving risk mitigation, automating cost management, closing the customer communication gap and maintaining remote work capabilities during and after the Coronavirus disease (COVID-19) pandemic. As a whole, the research anticipates shippers spending an average of $60 million on domestic

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Transportation. freight in 2020. Respondents said “They have many unique charthat accessing shipment status acteristics like tight margins, fresh information (81%) and transportaproduce that can spoil, tion cost analysis expiration dates that need by lane and mode A TMS acts as to be monitored, complicat(70%) were highly the nerve center in ed inbound requirements important for their food logistics, and so much more,” he adds. shipping opera“Getting the right volume of tions, and their top as it offers both the shipper and products at the right time major challenges receiver clear and at the right location is were visibility, visibility across the no easy task. Visibility into track and trace and control of supply chain (42%) and comfull lifecycle of processes allow food and munication with an order beverage businesses to adcustomers and plus. dress these challenges while carriers (37%). Mike Kukiela, meeting business goals. “A TMS acts as vice president and general manager, supply chain Without a TMS in place, the nerve center management for Schneider. many food and beverage in food logistics, as companies would find their it offers both the operations grinding to a halt or shipper and receiver clear visibility freight spend skyrocketing. Techacross the full lifecycle of an order,” nology is essential for an industry says Mike Kukiela, vice president that measures and general manager, supply chain margins by the management for Schneider. “Based penny per case.” on wide-ranging variables, a TMS selects the best carrier at the optimal rate. It also provides the additional benefit of managing metrics and KPIs, as well as producing data for analytics and reporting that is critical for continuous improvement initiatives. With streamlined visibility, a well-developed and connected TMS keeps everyone’s food delivered on time and safely.” Today’s food and beverage companies have some of the most complicated supply chains, according to Dan Clark, founder of Kuebix and vice president of product innovation and strategy for Trimble

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For its part, Kuebix developed Community Load Match, which connects shippers with Trimble’s network to meet truckload needs in one platform. “Visibility tools are becoming more user-friendly and accessible, helping to connect shippers with carriers and any stakeholder that touches a shipment,” says Clark. “Now, a food or beverage shipper can track their orders in real time by connecting their TMS with their fleet or carriers’ on-board GPS or ELD systems. Logistics professionals can even monitor on-board temperatures in real time via their TMS with this type of advanced technology. And, if a carrier doesn’t have an onboard tracking device that can ping the TMS with tracking data at pre-determined milestones, drivers can access mobile apps from their phones to make delivery status updates and even send pictures or claims back to the shipping clerk in real time.” Earlier this year, Schneider collaborated with Blue Yonder to deliver a new carrier marketplace within the Blue Yonder TMS that

Kuebix

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pairs the power of dynamic pricing and visibility with the reliable, comprehensive solutions of Schneider’s portfolio. The frictionless digital experience also improves overall performance and speeds up the management of operations (e.g., booking and tracking loads). “Leaders in food logistics are looking for the ability to redesign networks on the fly,” says Kukiela. “The flexibility to shift a supply chain at a

Kuebix

moment’s notice to meet any disruption allows for a more dynamic distribution model—delivering better results and exceeding customer expectations. TMS-enabled visibility not only tracks and traces freight, but also monitors the temperature and minimizes the risks of each load in transit.” A global survey by Smeal College of Business at Pennsylvania State University reveals that 38% of shippers and 67% of third-party logistics providers invested in TMS in 2018. That was two years ago. Fast forward to present day and imagine automatic data-sharing between enterprise resource planning systems, warehouse management

systems, electronic logging devices and mobile devices. “Future TMS technology will fully integrate predictive analytics and big data to deliver superior optimization and inventory management,” says Kukiela. “The ability to connect multiple networks via blockchain-enabled technology gives food shippers an advantage in delivering their products in a diverse and shifting marketplace. TMS technology will continue to improve the customer experience through voice-enabled functionality, giving shippers and customers the ability to manage on the move. TMS applications will include modular components that are unique to each supply chain, giving end users the ability to design from the ground up and expand their connectivity and use cases.” The future of TMS involves TMS connecting everything with everything, says Clark. “Think of the IoT, but just for the supply chain. Imagine direct connections being forged between shippers, carriers, brokers, 3PLs and digital freight marketplaces all while still maintaining those crucial personal connections. This kind of connectivity will lead to optimal asset utilization and transportation efficiency,” he adds. “In this highly connected future, food and beverage companies will be able to communicate with key stakeholders at a moment’s notice or even ahead of time with predictive analytics. When all stakeholders in the food and beverage supply chain are connected and work together, everyone will win.”

Kuebix’s Community Load Match connects shippers with Trimble’s network to meet truckload needs in one platform.

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SECTOR REPORT

OCEAN PORTS & CARRIERS

WHEN RESHORING WON’T DO,

NEARSHORING MAY BE THE ANSWER In situations where complete reshoring is not possible, nearshoring provides the middle ground.

A

s weeks turn into months with the Coronavirus disease (COVID-19) pandemic, what it means for businesses and consumers continues to evolve. In the United States, this is particularly true as delayed reactions and disbelief prolong the fallout and likely recovery into next year and beyond. Supply chain decision-makers are adjusting strategies left and right, based on the changing demands of their market, budget restrictions, limited resources and safety concerns. Across the last few decades, U.S. manufacturers have invested heavily in offshore production, especially from China and other Asian suppliers. Over time, for various reasons, a reshoring

movement called for production to come back home. Reshoring efforts between 2010 and 2018 brought an estimated 749,000 jobs back to U.S. workers, while helping to curb counterfeits and unexpected costs from shipping delays and damages. Now, five months into the global crisis (and counting), tens of thousands of businesses are still taking the news as it comes and working to adapt. For supply chain and logistics experts—and any company with international partnerships—logical and often necessary considerations include what is referred to as “nearshoring.” In situations where complete reshoring is not possible, nearshoring provides the middle ground. For example, if it’s still too expensive to bring production to local facilities, neighboring countries can sometimes offer lower rates while eliminating some of the distance and unpredictability of overseas production. According to a Capgemini study, 52% of organizations in India are now planning a shift to nearshore locations in wake of the COVID-19 crisis. This

im to wh shi C be

joins remote work, digitization and automation as the most widespread developments defining the “New Normal” of postpandemic business values. Nobody was fully prepared for the pandemic, or wants it to continue any longer for that matter. With that said, movements like reshoring and nearshoring may turn out to be best-case scenarios for many companies and not just short-term reactionary measures. Benefits of nearshoring can include the same or similar time zones, shorter travel times due to geographical proximity and fewer language barriers and cultural obstacles. Along with these, the nearshoring movement will

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immeasurably improve safety measures and the ability to track shipments and prevent unwanted activity, whether that means counterfeiting, lost or stolen shipments and mishandling of customer data. China and neighboring Asian countries have long been the go-to for U.S. businesses needing low-cost

LocatorX

The nearshoring movement will immeasurably improve safety measures and the ability to track shipments and prevent unwanted activity.

WHEN KEEPING IT COLD COUNTS

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suppliers, but have also become the epicenter of counterfeit operations up to and during the pandemic. But, Forbes data shows that U.S. companies are leaving China for closer partnerships, especially in Mexico and Canada. As nearshoring grows in popularity, along with rising trade tensions between the United States and China, safe money is on this trend continuing. According to one study, 76% of U.S. businesses with production in China have moved or are planning to change locations, with one-third doing so in the near future. Nearshoring initiatives will not be without their own challenges. For instance, the regulatory environment in Mexico is rife with conflict, and investor confidence in the country’s privacy sector was at an all-time low in 2019. But, the needs of every business are different, and dramatic changes are sometimes necessary even for the most successful of organizations. The closer you bring production to home—and the more advanced tracking and authentication solutions you have in place—the better visibility and control ABOUT THE AUTHOR you can have over thousands STEVE MAUL of products, chief revenue officer LocatorX parts and other shipments.

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OCTOBER 2020 | FOOD LOGISTICS

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FOOD (AND MORE) FOR THOUGHT

EMBRACING FOOD WASTE PREVENTION

to Create a More Resilient Food System Food is the single largest line item on a food business’ profit and loss statement, yet its waste is largely unaddressed.

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Waste tracking and analytics, as a means of source reduction, gives operators the tools to prevent food waste from ever happening in the first place.

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ood waste is an inevitable part of the food system, but the extent to which it exists in this country and the world at large is the result of unconscious design and vulnerable supply chains struggling to manage uncertainty. Globally, one-third of all food produced is wasted, but in the United States, that number is even higher. Grocery retailers, restaurants and foodservice companies alone waste

roughly 25 million tons of food valued at $57 billion per year, accounting for roughly 40% of U.S. food waste by tonnage. In the institutional foodservice sector, for instance, 4-10% of the food purchased is typically wasted before it can be sold and served to consumers. For restaurants, 2 pounds of wasted food is generated for every $100 in sales. Food is the single largest line item on a food business’ profit and loss statement, yet its waste is largely unaddressed, let alone managed.

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When put into perspective alongside the amount of time, energy and resources that go into its production, it becomes clear that food waste is bad business, and there exists an enticingly lucrative opportunity in fixing it. The ReFED Roadmap to Reduce U.S. Food Waste by 20 Percent study identified $1.9 billion in annual business profit potential from food waste reduction strategies. In context, for every $1 invested in food loss and waste reduction, the average business receives a $14 return. Thanks to automation in innovative technology, that return has been evaluated as high as $20, and continues to grow as the need becomes more realized and the market for solutions grows.

Employ waste tracking and analytics Waste tracking and analytics present the most economically beneficial and high-impact solution to food waste. Waste patterns exist, but when we fail to address and understand them, we operate from a place of uncertainty. By taking a deeper dive into not just what is being wasted, but why, businesses can better adjust supply to meet demand and strategically optimize operations to maximize profitability. Many businesses employ some form of waste tracking to manage inventory, but the real power lies in analyzing that waste. Automated solutions can identify patterns in low-moving and high wastage items and calculate the effect that waste has on individual item profitability. With this insight, operators can more intentionally plan menu offerings and be more strategic about ordering product. By gleaning insight to kitchen behavior, inefficiencies can be pinpointed and addressed.

The power of prevention Waste tracking and analytics as a means of source reduction gives operators the tools to prevent food waste from ever happening in the first place. Source reduction is the most economic, environmental and socially beneficial mode of food waste management, but the term is far less recognizable than its recovery (e.g., feeding people and animals) and recycling (e.g., composting) counterparts. While both play important roles in the overarching strategy to tackle food waste, reduction must be prioritized to drive true impact. In terms of cost, source reduction creates three times the societal net economic value of recovery and recycling combined. Until recently, source reduction was a lofty dream, held up by the steep initial investment and reality of difficult staff compliance and training. Today, technology can overcome those barriers to make source reduction a seamless part of the “New Normal.” The bottom line is that the food system unconsciously creates too much food waste. Until we remedy those inefficiencies and better manage production, diversion is not enough. We must take action to reduce at the source. Tackling food waste is the most actionable solution to climate change, and given the breakdown of waste statistics and influence of the industry, food businesses are in a unique position to dramatically alter the trajectory of our world. As the conversation around food waste continues to grow, businesses should strive to get ahead of the curve. ABOUT THE AUTHOR LUC DANG CEO Phood Solutions

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FOOD (AND MORE) FOR THOUGHT

WHY QUALITY MANAGERS SHOULD CONSIDER

REAL-TIME SUPPLY CHAIN TEMPERATURE MONITORING

As food companies begin their technology journeys into the New Era of Smarter Food Safety, it is worth considering the implementation of a real-time supply chain temperature monitoring and visibility tool.

BY JEREMY SCHNEIDER

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very day, food quality managers are faced with the ultimate time-pressure dilemma—What is the most pressing concern of the day? This is in addition to standard day-to-day workloads, which includes strengthening food safety programs, managing document controls, the implementation or updating of quality standards and standard operating procedures and managing daily fires. With the ever-present challenges faced within the four walls of their facilities, how should quality managers prioritize the next major projects when all of these other priorities compete? Quality managers often find that those pieces of a program, including the cold supply chain, are out of sight

and out of mind until something goes very wrong. By that time, a major event may have occurred, which might negatively affect customers and brands. Alternatively, products may have gone to waste, causing substantial operational costs and even downstream stock outages. Unfortunately, when things do go wrong, a significant amount of resources are spent collecting

actions and define ownership and accountability. After experiencing a challenging event like this, organizations find it critical to implement programs that ensure this type of problem is prevented in the future. Organizations find that, as their supply chains grow in complexity, they pose greater challenges and risks to food safety programs and brand protection efforts. This is especially true in the challenges posed by international suppliers and locations, the demand for fresh foods and ingredients sourced from afar and the trend of just-in-time processing. Each of these increases the pressure on the supply chain to work efficiently and effectively all the time, where a break in the supply chain can lead to drastic consequences. As food companies begin their

Organizations find that, as their supply chains grow in complexity, they pose greater challenges and risks to food safety programs and brand protection efforts. the relevant paperwork and other documentation to piece together an incident, determine its root cause, then implement corrective

Food safety and quality managers should consider the impact that low-level temperature abuse can have on product quality.

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www.foodlogistics.com

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technology journeys into the New Era of Smarter Food Safety, it is worth considering the implementation of a real-time supply chain temperature monitoring and visibility tool to help solve these challenges. Teams find that having real-time insights over their perishable shipments allows them to change the way they manage their logistics programs. As an added benefit, they take advantage of the efficiencies that a real-time solution provides, for instance, by decreasing the time needed to review shipment data. There are often magnitudes of time spent trying to solve issues that arise such as premature spoilage and outages and shortages on the retail level. Many organizations are used to experiencing these issues and have unfortunately accepted them as simply the “cost of doing business.” This is particularly the case in areas prone to high heat and for products susceptible to temperature deviations. However, food safety and quality managers should consider the impact that low-level temperature abuse can have on product quality. A deviation as simple

There are often magnitudes of time spent trying to solve issues that arise such as premature spoilage and outages and shortages on the retail level.

Controlant

as holding temperatures five degrees above the optimum uppertemperature boundary can easily reduce a product’s shelf life by several days. This is especially true for items susceptible to temperature abuse, such as fresh poultry. Even a single, high-level temperature spike that is sustained for two hours can significantly impact the shelf life of perishable produce items, such as leafy greens. These types of incidents and the next-level effects of stock outages and shortages affect customer loyalty and a company’s brand. Having the ability to identify these types of anomalies enables quality teams to permanently solve these types of persistent quality issues, which can save time and money, and helps to enhance and

ensure customer satisfaction and loyalty. As companies have transitioned to a state of FSMA’s required Preventative ADVERTISER INDEX Controls within their ADVERTISER.................................................... PAGE manufacturing processes, CN Railway Company....................................................5 they have also been driven to implement Controlant.....................................................................19 operational processes that analyze risks and FreshOne........................................................................9 prevent from occurring in H & M Bay Inc..............................................................37 the first Old Dominion Freight Line Inc......................................17

Penske Truck Leasing....................................................2

PNC..............................................................................44

Trademark Transportation............................................21

Uline.............................................................................31

Utility Trailers..................................................................7

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FOOD (AND MORE) FOR THOUGHT ��������� �������� ����� ��� ���������� ����� �� ���� �� ������������ �� ��������� ������ ��� ���� ������� ��� ������ �� ������� ���������

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(Requester Publications Only)

Product is saved!

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2. Publication Number

Food Logistics ��������� �������� �� ����������� 4. Issue Frequency

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

END

3. Filing Date

015-667

September 15, 2020

5. Number of Issues Published Annually

6. Annual Subscription Price

10

Free to Qualified Subscribers

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

Contact Person

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

Telephone

Angela Franks

(920) 542-1259

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

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

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

Controlant

place. By actively managing the cold supply chain, quality managers are able to move from a state of reaction to proactive, preventative control. For organizations that manufacture food products that require temperature control for food safety purposes, temperature management is a mission-critical and required for preventative control within those processes and operations. How can quality managers assure that once products are loaded onto a refrigerated truck, temperatures will be controlled en route? With a real-time supply chain temperature monitoring solution, compliance and food safety can be tracked down to the product level. If your company has experienced a scenario in which a load has shown up at a delivery location and was missing its required trailer seal, you may have faced the dilemma of determining whether you should accept or reject the delivery. Your decision might depend on how badly you needed the product, and whether you could ensure that it hadn’t been tampered with. With light excursion events, in addition to real-time environmental monitoring, supply chain monitoring provides an added level of confidence regarding transportation security. Consider how helpful it would be to identify the specific time and location regarding when a truck’s doors closed and opened to determine whether they were unexpected, or whether they might have impacted product. These types of insights enable an organization to accept the load with confidence or reject it based on the cause. Quality managers face competing demands on their time. Having the ability to solve challenges in a sustainable manner can help managers focus on other critical tasks. When considering the costs that each of these types of incidents have in the aggregate, and that state-of-the-art technology can help an organization solve these persistent challenges, it makes sense to ABOUT THE AUTHOR investigate these solutions for longJEREMY SCHNEIDER director of business term, systematic development, food safety and improvements. quality assurance Controlant

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

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

Complete Mailing Address

ACBM, LLC, Barry Lovette, CEO

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

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

Complete Mailing Address

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

tax purposes:

 Has Changed During Preceding 12 Months

PS Form 3526-R Facsimile, July 2014

13. Publication Title

14. Issue Date for Circulation Data Below

Food Logistics

September 2020

15. Extent and Nature of Circulation

Average No. Copies

a. Total Number of Copies (net press run) Outside County Paid/Requested Mail Subscriptions stated on

No. Copies of Single

Each Issue During

Issue Published

Preceding 12 Months

Nearest to Filing Date

24910 17482

24668 16249

0

0

0

0

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

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

Paid and/or Requested

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

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

Distribution

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

(By Mail

requests from recipient, paid subscriptions including nominal rate subscriptions,

and Outside the Mail)

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

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

0

0

17482

16249

6752

7946

0

0

0

0

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

d. Nonrequested

bulk sales and requests including association requests, names obtained from

Distribution

business directories, lists, and other sources)

(By Mail

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

and Outside

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

the Mail)

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

(3) Nonrequested Copies Distributed Through the USPS by Other Classes of Mail.(e.g. First-Class Mail, nonrequestor copies mailed in excess of 10% Limit mailed at Standard Mail or Package Services Rates)

(4) Nonrequested Copies Distributed Outside the Mail

104

4

6857

7950

24339

24199

(include pickup stands, trade shows, showrooms, and other sources)

e. Total Nonrequested Distribution (Sum of 15d (1), (2), and (3)) f. Total Distribution (Sum of 15c and e) g. Copies Not Distributed

571

469

h. Total (Sum of 15f and g)

24910

24668

i. Percent Paid and/or Requested Circulation

71.8%

67.1%

(15c / 15f x 100)

Average No. Copies

16. Electronic Copy Circulation

No. Copies of Single

Each Issue During

Issue Published

Preceding 12 Months

Nearest to Filing Date

2,537 20,019 26,876 74.5%

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

2,407 18,656 26,606 70.1%

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

Barry Lovette, CEO

Date

9/15/2020

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

PS Form 3526 -R Facsimile, July 2014

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Profile for Supply+Demand Chain/Food Logistics

Food Logistics October 2020  

Food Logistics October 2020