Cold chain first at ICEE in Guangzhou
Cool Logistics’ Alex von Stempel reports from the inaugural Cold Chain Logistics Forum at the 4th ICEE/ICEF Guangzhou International Cross-border E-commerce & Goods Expo, July 2019
Some people may wonder what e-commerce, the cold chain and perishable logistics have in common, especially in the context of cross-border e-commerce. Food e-commerce is one of the fastest growing areas of e-commerce, but most of it is limited to a 30-mile radius. If this involves a border, such as between Hong Kong and mainland China, this may be regarded as circumstantial or at least opportune.
But is there an argument to be made regarding the global aspect of the cold chain? Is there an underlying desire for cross-border food e-commerce? Yes, is the short answer, because there is increasing demand in China for better, safer, fresh agri-products from Europe.
However, one of the biggest challenges involving perishable logistics is the ‘lack of talent’ as Alfred Cheung, founder of JC Republic and the driving force behind the ICEE Cold Chain Logistics Forum, put it during the inaugural event in July. Meant as a clarion call for greater international engagement in developing China’s cold chain, Cheung’s constructive criticism struck a chord with the audience in more than one sense: If a picture is a thousand words, Alfred’s breaking into song during his presentation was a true sensation!
Seriously, there clearly is a need to focus on the demand for total transparency in the cold chain, especially given the huge opportunities for the Internet of Things (IoT) to tackle some of the critical issues that continue to bug the logistics of perishables, not only in China, but literally everywhere. Speakers at the one-day event, chaired by Ruben Huber of freight forwarding and NVOCC network OceanX, cited delayed reporting of problems, fragmented responsibilities and procedural rigidity, epitomized by silo thinking, as among the thorny challenges.
As Tony Fadell, one of the creators of the I-phone said, “software can only eat the world after hardware disruption has been created.”
For all the demands for greater end–to-end supply chain visibility this will always be limited by the chain of command in cold chain logistics, which remains split — some would say hopelessly so — between cargo owner, freight forwarder, carrier, ports and consignee. To go back to hardware, without investment in cold chain infrastructure E2E visibility simply won’t work, as Edmond Fung, founder of the OYM Alliance explained. Fung is the instigator of a new platform of cold store operators, truckers and other cold chain partners.
Yet if there are no contractual obligations between different partners, let’s say for example between a cold store operator, a container owner, a cargo owner and a container terminal operator, there is only trust that can provide a degree of transparency. Even in the limited application of the term to the world of the container there are many confidentiality hurdles that will ensure that communication between the different partners will be limited to sharing on a ‘need to know basis’, if at all.
Take for example reefer containers belonging to different shipping lines being carried on one and the same vessel. If the ship is delayed and some containers are more ‘urgent’ than others, who ensures that the reefer boxes that really need to be discharged first will actually come off the ship? Also, different lines will use different tracking systems that may or may not be inter-operable.
Another huge problem, especially in the field of the maritime-based traffic, is the typically low value of the cargo shipped in reefer containers. As Shachar Tal, founder of Loginno, Logistic Innovation — the mastermind behind Brazil-based digital shipping company LogIn — said at the conference, the typical value of the main commodities shipped in reefers is usually insufficient to warrant an investment in providing complete real-time visibility. However, some high value electronics could benefit. LogIn operates 20,000 reefer boxes, of which 1000 are reefers, according to Shachar.
Fresh produce and protein represent the bulk of the commodities shipped in reefer containers, but compared with drugs or medicines, communication equipment and semi-conductors — some of which are shipped in dry and reefer boxes — their value pales into insignificance. Tal presented a very interesting concept using acoustic technology to literally ‘sound out’ the laden weight (VGM) of containers and their contents, another bug bear of the container supply chain which was supposed to eradicate false declarations by shippers or freight forwarders.
Tal’s solution is currently limited to container operations. But as soon as the cargo is transferred from the container into the cold store the physical and indeed virtual cold chain is too easily interrupted. The problem is that are no contractual obligations linking the world before the cross-dock with that beyond it and this issue is typically replicated between the different stages of distribution, i.e. primary and secondary distribution and their respective DCs, not to mention last mile delivery.
At all these stages the cold chain is at risk of being interrupted. To some extent e-commerce giant J.D.com is believed to be tackling the problem of vertical cold chain tracking. Having consciously invested in its own directly controlled cold store operations, J.D. com may unleash a new trend in cold chain task tracking across multiple functionalities.
An interesting, if more traditional way around the problem of limited cold chain visibility would be to extend the use of reefer containers door-to-door, at least up to retail outlets. Thermo King’s sales director JJ Foo promoted the use of its -60degC reefer containers used for its sashimi grade seafood clientele. Killing off pathogens is critical especially for seafood. As Professor Richard Fung from City University of Hong Kong mentioned, food bacteria multiply most rapidly between 5 degC and -60 degC. According to Alfred Cheung even certain vegetables could benefit from being frozen to that low level without destroying their cell structure. Nevertheless, this approach begs the question how many retail outlets will have the need for a whole container load of lobsters or dragon fruit.
Whereas the bulk of the 1st Cold Chain event in Guangzhou dealt with maritime transport, Fung covered issues relating to airfreight where there are surprisingly very heavy losses. Apparently some 30-40 per cent of perishable cargo is wasted during transit, with some of the worst losses happening in airline catering.
Technology may continue to develop at a terrific speed. Yet much will depend on trust.
John Browne describes this beautifully in his latest book entitled Make, Think, Imagine: Engineering the Future of Civilisation. There is a popular belief that stable and effective quantum computers, if and when they are available, could be used to solve every computer problem, he says. However, as is well known, all inventions open up more questions than answers. ‘Even quantum computers are inherently probabilistic’, according to Browne.
Summing up, there is still a long haul for cross-border food e-commerce to overcome with other challenges such as shifts in demography opening up a whole new dimension for e-commerce and the logistics of the last mile. The conversation continues at the 11th Cool Logistics Global Conference in Valencia 17–19 September, where Alfred Cheung and Ruben Huber will be among key speakers.
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