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The Future of Reefer Logistics and its Complexity

Berlin Fruit Logistica 2015 : The forum to become the starting point for an important debate

The Future of Reefer Logistics and its Complexity

Berlin Fruit Logistica 2015 : The forum to become the starting point for an important debate

By Anne Maurier | January 28th, 2015 . Follow Easyfresh @easyfreshglobal

The world fruit and vegetables market is expected to exceed $735 billion by 2015, representing 25% growth over five years. By 2015, the market is predicted to reach over 690 million tons in volume, up 5% compared with 2010. Exports of fruit and vegetables generate around $45 billion, reports the Food and Agriculture Organization of the UN (FAO).

For the time being, the global fruit and vegetables market is concentrated, with around 50 top companies accounting for a significant portion of revenue. Vegetables represent almost 65% of the overall market. Nevertheless, new producers and farming trends, innovation, new production and consumption areas, food security, food waste policies and the concentration of shipping lines are leading to an utmost complex outlook.

In a similar manner, incomes in developing economies never rose faster or at a greater scale in history, and about a billion people are becoming part of consuming classes in roughly ten years' time.

Likewise, macro-economic changes and shifts in trade patterns have their impact on global supply chains. They provide opportunities as well as challenges. Linked to these, there are a number of uncertainties that only a global perspective of the logistics of perishables can lead to adequate and stable solutions in the long run.

Below we mention some relevant developments in reefer logistics that are directly or indirectly caused by changes in trade patterns, in GDP growth or in customer behavior :

  • Growth patterns:Growth in the logistics industry is no longer driven by exports from Asia to North America and from Asia to Europe. It will come from elsewhere, and will be more fragmented, more unpredictable and more volatile.
  • Flexibility: Meeting consumer's requirements at multiple locations with multiple transport modes at different times requires a flexible supply chain that can adapt easily to unexpected changes and circumstances. Global focus in reefer trades is a must!
  • Globalization:International, mature and emerging markets have become a part of the overall business growth strategy for many companies.
  • Multi-channel sourcing: End-consumers increasingly source via multiple channels, ranging from standard shops to e-commerce and retailers. The reefer logistics industry needs to support multi-channel strategies of their customers.
  • Stability and continuity: To be able to secure speed to market and to reduce risk of delays for perishables, alternative transport modes and routes are required to support the continuing trend of outsourcing of logistics services. Only specialized reefer logisticians, thinking "out of the box" , specialized / understanding the industry will be able to sort out cited growing bottle-necks
  • Transparency and integrity : An ethical way of doing business is required : A code of conduct and respect is necessary
  • Partnerships and networking : Producers and receivers continuously search for supply chain innovations and gains through partnerships with logistic service providers. Flexibility and an "open mind" come together with business. Concentration of certain portions of the cold chain goes in the opposite direction. This includes concentration of the seaborne leg driven by shipping lines in "de facto" maritime oligopolies.

In short, cold chains are becoming increasingly complex and dynamic with sourcing locations being changed increasingly quickly and purchase orders becoming smaller and more frequent.

These developments will have their effect on day-to-day reefer logistics, and companies will need to prepare for ‘the new normal' in supply chain management. 

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Contact us for more info ;

Anne Maurier :      easyfresh.ho.marketing@easyfresh-logistics.com

Twitter :                @easyfreshglobal

 

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