Amongst other factors, consumer and social demands are having a dramatic impact on the supply chain of fresh produce, driving companies toward a more transparent cold chain system – one rooted in social, ethical and environmental concerns – while also requiring them to deliver more customised experiences.
Companies need their post harvest supply chains to be more connected, scalable and transparent in order to respond to these emerging consumer trends and demands. Global events such as Covid-19, while being a major disruption to the fresh produce industry have also been the much needed catalysts towards needed change that has been looming over the industry for some time now.
With its capital-intensive equipment, strict temperature requirements, and energy dependence, the cold chain has always been a demanding logistics segment. Now the sector is grappling with additional challenges—from increases in the sensitivity, quality standards, and volume of many of its goods, to continually mounting regulations.
The cold chain also faces many of the same issues challenging the entire supply chain: serving the global market, driving out costs, becoming more strategic, and addressing capacity and resource constraints, all while managing the exacting needs of the sector’s precious cargo.
Here are 10 trends currently impacting the cold chain system;
1. Sustainable post harvest operations
Sustainable farming has been high on the agenda this year across all sectors. As the unexpected pandemic had thrown a spanner in the works of an industry that is already maxing out its resources. The cold chain has huge potential to not only improve operations but also implement resource saving tools and practices.
This trend is being driven not only by consumer-awareness, but also an industry-wide need to provide a much greater supply of fresh produce to end consumers, as the global population is projected to reach 9.5-10 billion people by 2050, creating an impending strain on resources that is already being felt.
Sensor technology like Postharvest’s Environmental Sensor is helping truly enhance cold chain monitoring of fresh produce products in storage. Operating across Temperature, O2, Humidity, CO2 and Ethylene readings, their wall-mounted unit is helping accurately monitor and maintain optimal storage levels for unique fruit and vegetable groups, ultimately reducing food loss numbers across the cold chain system.
Cold chain operators are also looking for new ways to balance the energy-intensive requirements of perishable products with the desire to reduce resource consumption.
2. Cold chains are becoming more global
Increasing interest in healthful food, and a growing middle class in locations such as China, are pushing cold chains to globalise. Consumers now demand higher-end products, that must travel extended distances and ship quickly to ensure freshness and quality.
“Food is traveling around the world as more manufacturers manage their supply chains globally,” says Doug Harrison, president and CEO of VersaCold. These manufacturing plants are becoming more specialised to a specific product or label, and they ship their goods more widely.
“Demand for fresh food is growing, and that requires increased innovation to overcome capacity and infrastructure constraints, and mitigate disruption risks to ensure quality delivery,” adds Tim Smith, executive vice president, sales and business development, for Lineage Logistics.
3. Transparency, Traceability & Regulation
There has always been a longing from consumers to have supply chains operate on a more transparent and traceable scale. Yet the request has gone on mostly ignored as the reality of implementing these regulations has been unrealistic until recently. Globalisation and an increase in the number of food safety incidents are prompting governments to tighten regulations on production and supply chains. Establishing preventive measures and harmonising regulations are major issues for the food industry.
Technology has streamlined to a point that it will no longer be a large financial burden or a process overhaul in order to integrate traceability tech within the supply chain. This capability couldn’t of come at a more needed time as the wants and concerns of consumers has only magnified since the Covid-19 pandemic. Now more than ever, people want to know where their fresh produce products are coming from, what health score the product maintained at the different stages of the post harvest journey and who was involved in the handling of the product.
Getting out ahead of such regulation is a common theme across cold chain logistics. Manufacturers are building more stringent practices into their requirements, and third-party logistics (3PLs) & other providers are investing in additional credentials.
4. An increasing focus on quality and product sensitivity
In the food industry, the big trend is an increased focus on quality, health, and integrity. To win the repeat business of fickle and demanding consumers, manufacturers must ensure an optimal experience with the brand. For cold chain products, that means avoiding the changes in texture and taste that occur when a shipment strays outside recommended temperatures.
This intensified focus on quality and the consumer experience means refrigerated warehouses across the food cold chain must maintain as many as five different temperature zones.
This is another focus area that PostHarvest’s Environmental Sensor tackles with its sensor reading, API integration and software interface.
5. Market pressures drive demand for supply chain efficiency
The need to operate a Lean supply chain is even more acutely felt when every step faces the additional requirement of refrigeration and compliance. This looks like corporate-wide adoption of lean principles, and a more strategic approach to working with supply chain providers, including cold chain.
Driver shortages and capacity constraints are hitting the cold chain especially hard. Operating a refrigerated fleet requires significant capital investment, specially trained drivers, increased liability, and a greater risk for close inspection. Many customers of logistic companies these days require multiple inspections of a carrier’s equipment each day to ensure it is in compliance with their standards. This is proving to be challenging, as finding a qualified full truckload carrier within controlled environment standards leaves few options.
Cold chain operators are eager to find new strategies to reduce costs. In retail, requirements for smaller, more frequent orders are driving the use of multi-cell trailers—refrigerated trailers in which insulated curtains are hung at intervals to create different temperature zones. This approach enables a cold chain 3PL to include frozen and chilled goods in the same shipment.
But consolidating into a multi-cell trailer isn’t always possible. Because of the space and handling costs of managing the insulation, it works best for dedicated equipment rather than a common refrigerated carrier.
6. Transport preferences are shifting
Fuel price fluctuations and globalisation have driven some cold chain operators to shift modes from truckload to intermodal, or from air to ocean. Other factors contributing to mode shift include truck driver and capacity shortages, and sustainability initiatives. But makers of chilled and frozen goods must balance the additional time these modes may take with speed-to-market requirements.
Some shippers have shifted to steamship as the ability to manage and track locations and temperatures in containers has improved. But unlike over-the-road, where a qualified carrier repeatedly uses the same trailers for the same customers, once the container is offloaded and returned to the steamship line, there is no guarantee it will be used again for that manufacturer’s shipments. This makes it challenging for the 3PL to inspect and qualify containers.
7. Technology investment remains critical.
Like all supply chains, cold chain operators must continually upgrade technology to ensure efficiency, integrity, and safety. This includes both back-end software systems and front-end devices to gather and report key storage & shipment data in real time.
Cold chain carriers have invested considerably in on-board equipment built into refrigeration units to track temperature and location, and to make this data available to 3PLs and shippers in real time, offering increased visibility and the opportunity to prevent or mitigate loss. Some shippers use removable sensors to independently track the temperature of their cold cargo, usually for high-value goods and international shipments.
Some food manufacturers have built this capability right into their packaging. MillerCoors, for example, uses temperature-sensitive ink to show when products are at optimal temperature.
PostHarvest’s Environmental Sensor is an example of a sensor tracking device that has taken several individual sensors and combined them into one singular monitoring system that can curate optimal storage conditions for unique fruit and vegetable supplies.
This rise in demand for real-time temperature and location status is sharply driving demand for IT infrastructure that can analyse and deliver data where and when it’s needed.
8. Customer habits persist as the cold chain’s weakest link.
The biggest obstacle for many cold chain operators is the one part of the supply chain they don’t control: The moment products are placed in the consumer’s shopping cart.
Despite considerable expense and effort to move fresh produce across the globe through multiple hand-offs, a product that sits too long in a cart, a hot car, or a poorly regulated freezer can degrade in quality, a condition that often gets blamed on the manufacturer.
Ensuring fresh produce retains its integrity and safety remains a moving target for cold chain operators. Globalisation, tightening regulation, and changing consumer demand continue to alter the scope of the task, while driving the need for technology, efficiency, and security.
PostHarvest Technology has noted this problem area and is currently looking for ways to provide commercial technology that can help consumers get the most out of their fresh produce purchases.