Carriers and logistics providers deploy innovative technologies to support the growing perishables segment
Advances in cold-chain technologies that enable products to stay fresh while moving efficiently and safely across long distances are changing the face of global marketplaces and logistics. Pharmaceuticals and life science companies, the fastest-growing segment of cold chain users, use the cold chain to ship drugs across the globe and to receive blood and tissue for testing and for developing personalized treatments at long distances. Farmers around the world are seizing on opportunities by producing not just for local consumers, but to meet growing global demand.
The United States is the largest exporter of agricultural products in the world, running a $21.5-billion surplus in the trade last year. With U.S. agricultural productivity growing faster than domestic demand, U.S. farmers and ranchers pretty much have to export if they are to turn a profit. Luckily, demand for fresh food in lower income countries is growing at a 17% annual rate.
Perishables were once the province of air cargo carriers, but research has shown that shippers are increasingly choosing the less expensive ocean option over air for perishables—and not only for agricultural products. Pharmaceuticals companies are under the gun to reduce costs, thanks to governmental efforts to slash health care expenditures. The shift from air to ocean for perishables has been estimated to total around 100,000 TEU, or 5.4 million tons, of cargo per year.
High Margins, High Tech
Moving perishables has become increasingly important to shipping lines because they provide high-margin business while freight rates generally are still being squeezed. The share of containerized refrigerated capacity - as opposed to transportation on specialized reefer vessels—has grown from 33% in 1980 to a projected 85% by 2021, according to Drewry.
Carriers and other logistics providers are implementing new technologies to manage these cargoes more efficiently and to monitor their status to prevent major problems.
TOTE Maritime Puerto Rico added 350 new high-tech smart refrigerated containers to its fleet in 2017. “Now, TOTE Maritime Puerto Rico’s entire reefer fleet,” noted Tim Nolan, President of TOTE Maritime Puerto Rico, “is equipped with machine-to-machine telematics technology which maximizes safety and efficiency of supply chain operations and provides clients crucial real-time, end-to-end visibility of their shipments.”
In early 2015, ZIM Integrated Shipping Services launched its ZIMonitor product, which allows shippers to track, monitor and remotely control sensitive, high-value cargo stowed in refrigerated containers. Following a pilot project with Teva-Pharmaceutical Industries, a US-Israeli company known for developing and marketing generic drugs, Zim added 1,900 reefers to its fleet.
“One innovative aspect of this program is that we integrated the monitoring device directly into the reefer equipment,” said Rafi Ben-Ari, vice president for shipping at Zim. “Another is that we established a 24/7 control tower to take care of problems identified by the monitoring.”
During the pilot, Ben-Ari reported, Teva wanted to receive constant alerts. “But once they understood that our control tower was equipped to handle any problems,” he added, “they decided that they needed information only on two milestones.”
ZIMonitor alerts—which may indicate that a container is unplugged or that its temperature is out of range or that it’s off-route—are available over mobile devices utilizing cellular service, which means that it can monitor containers while on the road or in the port but not when they are on the high seas. That would require satellite communications which would increase the cost of the service beyond what Zim’s customers are willing to pay, according to Ben-Ari.
Sealand, on the other hand, as part of investments made by Maersk Group, does offer satellite communications on refrigerated containers. Besides monitoring the status of the cargo, this allows cargo owners to obtain the location of a container every 15 minutes. Shippers and receivers of refrigerated cargo are more sensitive than most to the location and condition of their goods, noted Ariel Frias, who heads up marketing for the carrier, understandably so considering their value, perishability, and, often, time sensitivity.
DHL Global Forwarding introduced a new LifeTrack mobile app last year, a free application that provides customers in the life sciences and healthcare industry access to DHL’s online cold-chain tracking and management platform.
“Our mobile application provides customers with immediate overview of the most critical information, such as temperatures, interventions and shipment resolutions,” said David Bang, global head of DHL Temperature Management Solutions. Once logged in, the application shows shipment details including routing, movement milestones, and potential interventions. Upon completion of key events or detection of potential irregularities, the app informs users and provides details about measures taken where required.
IoT and Sensors
The Internet of Things (IoT) a phenomenon which allows sensors to monitor a variety of shipment attributes—has been touted as a boon to logistics and is another leading-edge technology that offers benefits to perishables shippers and carriers. Agility Global Integrated Logistics (GIL) has applied the technology to monitoring shipment temperatures and stability, as well as to the geo-fencing of shipments.
For temperature-sensitive shipments, especially, “customers want to know if they have gone outside of tolerance parameters,” said Biju Kewalram, chief digital officer at Agility GIL. “IoT can also tell whether a shipment has been shaken up and whether a truck may have gone off route,” the last item being relevant to whether a shipment may have been exposed to adverse environmental conditions.
This data also helps with logistics because it helps shippers more accurately forecast their transportation needs and costs. Data analyses are used to understand delivery lead times and to diagnose problems of on-time performance and inventories. Visualization technology applied to that data can provide a birds-eye view of supply chains to understand product flows, density problems, and areas that need to be addressed.
The global pharmaceuticals market has more than doubled in the past ten years. Like the demand for fresh foods, global pharmaceutical sales are expected to show healthy growth into the future. Given those facts, it is also likely that carriers and logistics providers will continue to deploy innovative technologies to facilitate these critical shipments.
