How to overcome the challenges of food shipping
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Shippers with perishable products are on the shot clock the moment goods are harvested and begin their supply chain journey. Product protection, chain of custody, and shelf life are key elements in that journey. They’re critical to deliver the right product to the right place — at the right time and at the right price.
Meanwhile, retailers are faced with managing hundreds of perishable suppliers and dealing with extremely complex inbound networks. While many retailers have long leveraged IoT devices to record temperature, shock and location for perishable shippers, the pressure is mounting to leverage real-time data for a more streamlined end-to-end journey.
Here are the key trends and issues Food and Beverage (F&B) shippers face today.
Biggest challenge in cold chain shipping
The handoff between providers, inevitable delays and unpredictable extreme weather events make cold chain shipping a challenge. Evidence of these difficulties is that roughly one-third of global fresh fruits and vegetables (FFVs) are thrown away because their quality has dropped below an acceptable limit. While major disruptions always pose a threat, it is the lack of monitoring, alerts, collaboration and communication that most often dooms cold chain food & beverage shipments.
Real-time visibility can help you better understand your network, especially supply and demand and the transport market. Cold chains require a network — from harvest to plates — that includes facilities, packaging, transport, quality controls and monitoring. Technology, process and applied expertise facilitates the delivery of the perfect order throughout the network, and makes managing disruptions easier when they occur.
How F&B shippers can lower their costs
In addition to driving customer satisfaction, OTIF performance can also be associated with significant penalties. These penalties can be reduced by focusing on two things. First, shippers can leverage real-time visibility to identify and resolve early deliveries by having ETAs as soon as a customer-bound load is tendered for pickup, or even before.
In addition to driving customer satisfaction, inconsistency in delivering on time, in full – or OTIF performance – can also be associated with significant penalties.
These penalties can be reduced by focusing on two things.
First, shippers should identify and resolve early deliveries by having ETAs as soon as a customer-bound load is tendered for pickup, or even before.
Second, capturing late reason codes associated with exceptions will enable root cause analysis, helping to drive continuous improvement. For example, if over 30% of late arrivals are due to late departures from the facility, then ensuring that carriers arrive on time to pick up loads, and having loads slotted for processing, will significantly improve performance.
Beyond fines and fees, end-to-end visibility can help drive efficiencies in overall planned food and beverage transportation spend. Rather than manage individual shipments, shippers should look at aggregated performance data across all shipments and compare performance against service-level expectations. This macro-analysis can help you pinpoint underperforming facilities, carriers or lanes.
How e-commerce has affected the F&B industry
In response to the boom in online grocery orders, grocers are investing in dark stores and micro-fulfillment centres, particularly in densely populated areas.
These new fulfillment models significantly reduce the time it takes to fulfill online orders. Still, they come at a cost – the added labour, real estate, and technology investments needed to successfully execute many e-commerce strategies can shrink profit margins, especially when it comes to low-value orders.
The increased consumer demand for new fulfillment models, combined with riskier outlooks for profitability, has grocers looking for efficiencies across the supply chain to help boost profit margins. As grocers expand their supply chain networks to accommodate new e-commerce business models, real-time visibility empowers them with the necessary agility to keep up with new suppliers, partners and facilities.
By unlocking valuable data on in-transit inventory, real-time visibility helps grocers to reduce product spoilage and optimise inventory levels to keep costs down, even when disruptions arise.
What about sustainability and waste?
There’s no doubt that sustainability is finally being considered a priority in almost every industry. Over 700 of the largest 2,000 publicly traded companies have made some form of net-zero commitment, while 59 of the FTSE 100 have committed to achieving net-zero by 2050. Two-thirds of the S&P 500 have set emission reduction targets of some kind.
Companies that can find a way to balance sustainability with profitability will be the winners in both the short- and the long-term. However, this is obviously easier said than done.
One area of low-hanging fruit for food shippers is waste. According to the Food and Agriculture Organization of the United Nations, supply chains cause 40 percent of all food waste in North America.
While having an accurate carbon footprint measurement on every single shipment has been an out-of-reach goal for many companies, new advancements in real-time visibility are finally making it possible by unlocking the detailed transportation data needed for these calculations. Real-time visibility also provides valuable insights on inventory in transit, ensuring products stay fresh with temperature monitoring along each leg and order.
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