A New Ice Age? Demand for Refrigerated Transport and Cold Storage
Supply Chain Digital has previously reported on the growing frozen and chilled food market and its impact on cold store facilities. The increasing dema...
Supply Chain Digital has previously reported on the growing frozen and chilled food market and its impact on cold store facilities. The increasing demand for refrigerated goods has also had an effect on the companies that transport those products worldwide. Temperature-controlled transportation businesses are being encouraged to innovate in order to keep pace with the ever-changing needs of the chilled market.
Philip Edge, director of logistics provider Edge Worldwide Logistics, said of the industry: “Those that specialize in frozen food distribution have the buying power and expertise to improve efficiency and visibility, whilst making significant savings.”
The continued growth of the market is a combination of increased demand from consumers for convenience food - one of the consequences of the economic downturn. It is also due to the requirement for fresh food, as opposed to products with a shelf life.
Ingersoll Rand, the international supplier to transportation, manufacturing, construction and agricultural industries, said in November that its total reported third quarter revenues were up 8 percent on the same period last year. Michael W. Lamach, chairman, president and CEO, commented: “We are seeing improvement in several of our key markets, including global demand for refrigerated transport and industrial and commercial HVAC in Asia.”
Frozen and chilled distribution is not only a developing sector in the UK and U.S., as Ingersoll Rand’s results demonstrate.
Shipping company CMA CGM announced the launch of its new Victory Bridge service in October. It links North Europe to the U.S. South Atlantic, Mexico and the U.S. Gulf. The service is responding to the increased demand for refrigerated goods on the trade route between Mexico and Europe, according to the company.“
With this optimization, the Group will provide the best transit times of the market from Mexico and U.S. South Atlantic to North Europe, thus ensuring optimal service quality especially for the transport of refrigerated goods, particularly sensitive to travel times,” explained Jean-Philippe Thenoz, senior vice president North America lines, CMA CGM Group.
With transport companies under pressure to lower their carbon footprint, the movement of local produce to supermarkets and other food retailers, thereby shortening the supply chain, has been welcomed. However, it does pose challenges when it comes to transporting fresh food at the correct temperatures.
Edge believes the distribution of frozen food needs to be brought into the 21st century. “The frozen food distribution system is archaic in its approach, and the majority of frozen food importers think this is the norm,” he explains. “In fact, it is far behind the efficient and transparent supply chains of chilled and ambient distribution in terms of management.”
However, a new development by researchers at the Fraunhofer Institute for Phototonic Microsystems IMPS in Dresden, Germany, could impact the way food is transported. Using radio chips, they have created a transponder that measures temperature, pressure and humidity.
While radio chips are more commonly used to supply data in order to identify products, by fitting them with sensor functions, researchers have created a new use for them. “We have combined the UHF (Ultra-High Frequency) transponder technology with sensor technology,” explained project manager Hans-Jürgen Holland.
According to the Institute, if the temperature rises unexpectedly during refrigerated transport, the intelligent chip recognizes the variation immediately and reports this to the reader.
Edge has also recognized a way in which distribution companies can resolve the issue of the outdated cold chain. He explains that a few specialist frozen food logistics providers have preferred lines that work alongside local partners to ensure a “smooth service” with full supply chain control.
“This drives down cost considerably, helping importers of frozen food to save a great deal,” he adds. “They just need to be made aware that a cost effective alternative is out there.”
The cold distribution market is finding innovative ways to keep up with the changing demands of consumers and retailers. With shipping and transport companies alike preparing themselves for further growth in the distribution of refrigerated products, the sector remains buoyant. Such developments should help the refrigerated transport industry shake its “archaic” reputation and become as advanced as the cold store facilities that serve the industry.
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.