How to solve the main challenges of refrigerated transport
The health crisis resulting from the 2020 COVID pandemic had a decisive impact on consumer habits, and one of the most marked changes was in the fresh produce sector. In Europe, the severe decline in out-of-home consumption, due to the closure of restaurants, led to a sudden increase in purchasing demand for supermarkets and households. This growth in demand continues today in a European market characterized by stability, but also by strong competition in the marketing and transport of fresh fruit and vegetables.
New consumer trends, such as the desire to eat more healthy foods, or the adoption of vegan diets, lead to an increase in demand for products such as avocados, blueberries or pomegranates, as well as vegetables with a high protein content. In the last two years, projects such as «Smart Protein», financed by the EU, have shown that the consumption of plant-based foods has increased by 49%.
As for the EU regulation, it also generates changes; the European Commission created Directive 2019/633 on commercial practices for fruit, vegetables and greens that prohibits practices of cancellations at the last moment, payments later than 30 days or unilateral contractual changes, as well as the passing on to the supplier the costs of examining customer complaints.
We will now answer the question of how to solve these and other challenges facing refrigerated food transport.
The most efficient answer
How to gain efficiency in this context of new demand habits and a growing demand for local and organic products? From the point of view of sustainability, the ideal for transport operators is to work with proximity products, in which the product’s journey from the origin to the consumer is as short as possible. On the other hand, it is essential to achieve the shortest possible transit time. Not only because this generates cost savings, but also because it requires less time in refrigerated storage and less cost in maintaining the cold chain.
The fact that, since the pandemic, ecommerce is no longer only focused on long-life, or fast-moving consumer products, but has now been incorporated into grocery shopping in every home, has reconfigured supply chains. This creates two key drivers:
- Proximity centers. For the consumer, speed of delivery is already key, as well as product availability in time windows. The standards of urgency have spread from ecommerce or parcel delivery, to all transportation, and to FTL. And they have taken hold, especially with new consumers. This alters the way products are distributed based on seasonality. The globalization of trade in perishable goods goes beyond just not missing a date; it also requires shorter transit times.
- Product traceability. The consumer wants to have all the information, and even to know the traceability from the origin of the product. This is a radical change, because it requires transport with all these elements of traceability and consumer information, as for example, by regulation, already occurred in the sector of transport of medicines.
Shippers concerned, about capacity
The main demand of the fresh food shippers to the transport companies is that they are able to adapt their capacity to their schedules. Not only are these transport operators making changes in the last 2 or 3 years that have not occurred in the last 20 years, but there is the key side effect that the type of companies and suppliers offering transport services are shifting towards companies that are able to add value. Large companies and shippers are listening and welcoming new models that think differently.
Today, despite the fact that, when a fresh food shipment arrives at the destination warehouse, the end consumer has numerous tracking messages, for more than 80% of the time, on an international long-haul journey, this shipment remains in an FTL truck that, in many cases, does not even have GPS traceability.
Driver shortage and capacity constraints
How to solve a driver shortage that affects all types of transport, but which, in the case of the cold chain, is even more detrimental? In two ways:
- New ways to attract talent. Across Europe, there is a need for 400,000 truck drivers, according to data from IRU, the World Transport Organization, and the latest paper ‘European Driver Shortages’, GSCi. In countries such as Spain, 20% of unfilled jobs are related to logistics and transportation, including warehouse workers, picking managers or traffic managers.
The sector has a great problem of attracting talent to rejuvenate its age averages, attracting talented professionals who can develop their professional projects, train their employees, present very transparent communication policies and are well adapted to the profile of their professionals.
- The rise of digitalization. The reconfiguration of many companies cannot wait. It is essential to apply logical criteria supported by technology within the sector. This must be preceded by a change of mentality among managers, who must have time to make strategic reflections on where their model, their customers and industry trends are heading.
Rationalization and collaboration
The rationalization of road transport models is the solution to avoid the inefficiencies generated by the growth of traffic restrictions and the coexistence of different regulations and legislation. Digitalization plays a key role, not only for more companies to remotely control the temperatures of refrigerated goods, but also, for example, to have electronic CMR, something that, on the other hand, will be mandatory in the EU soon.
As for empty trips, which the most efficient companies manage to reduce to 5% or 6%, it is essential to implement more collaborative models than the current ones, for example for distribution also in the last mile.
In addition to rationalization and collaboration, which are necessary for capacity and cost, and to reduce too many empty miles, carriers that want to be more efficient will have to offer a new model to their customers: corridors. Operators will show shippers those corridors and ask them to get on them. This will be the best way to deal with the current cost increases and staff shortages.
Positioning and predictive traceability
The importance of accuracy in the flow of information for shippers is growing. Where do we stand and what can we expect from technology to be very accurate in that traceability?
- Positioning of refrigerated foods. In addition to information gathering and continuous updating, reactive warning systems to recognize temperature deviations are key. Also monitoring human decisions, as well as issues related to vehicle safety, parking and fault detection.
- Predictive traceability. Application of AI models that gather external variables that impact transportation, such as weather conditions or traffic congestion, among others. This is the key to generating a dynamic ETA (Estimated Time of Arrival). It is not only fresh products that require the development of a chain that cannot be broken. They can also benefit from very useful forecasting to predict the arrival of cargo at warehouses, to link to the customer’s specific dock and to an operator, etc.