Easy Fresh

News

Indian cold chain Logistics ; "ON RIGHT TRACK"

Indian reefer trade has always been linked to the beauty of the Adriatic

Paula Stefan, September 2018 via TransREporter Magazine, India

Marco Polo made an epic journey to Asia in the 13th century, returning after 24 years to the Adriatic, establishing it as the  gate to Europe. He was the first to leave a detailed chronicle of his experience that inspired Columbus and many other explorers. Today, North European ports remain important to route Indian seafood, grapes and the tropical produce from the South.

But there is one port located in the  heart of the Adriatic that has become a rising star and a leading hub in the perishable trades to Europe... the port of  Koper. It is a market with 50 countries,  750 million population and over 10 million square kilometres. Koper's perfect location and access to this hinterland re-opens Marco Polo's vision for Indian  perishable trade.

Cargo logistics is a rapidly evolving  market with many factors that are shaping the future of how to transport cargo in the challenging environment of the 21st  century, especially a ‘more conservative' reefer cargo. One can observe an obvious fragmentation of the cold chain. Grocery, seafood, meat, poultry retailers, they all have the capacity and the need for a real U-turn. 

Therefore, reefer logisticians such as  Easyfresh, are gradually implementing a new culture within the global temperature-controlled transport industry. They are designing specific product models, adapting to different dynamics, and adjusting to the specific routes and customers' requirements. India and Europe appear to be adequate arenas for change, asIndian and European reefer cargo shippers and receivers are demanding more efficient and mature logistics solutions. Consequently, the Indian and European cold chains are ripe for transformation too, and the first-mover advantage is up for the taking. Time for classic forwarding or basic reefer shipping should be over in some years, as it is already at its edge for cargo not requiring a temperature-controlled environment. The Adriatic and, very concretely, Luka (port of) Koper are being game-changers.

How to differentiate?

Nowadays, hybrid expertise and  intelligence-embedded cold chains offer a competitive advantage. But there are not so many of them. In an environment where the mantra is ‘transform or you are fired', customers will identify and buy these focused reefer logistics services to create a self-orchestrated cold chain, reaching previously unimaginable efficiencies. Focus or dedication to the transportation of perishables and a broad know-how in reefer logistics are paramount for it. Neutrality, from a trading perspective and being truly independent or not linked to a big brother, being a shipping line or a cargo owner, is an additional key value to effectively and honestly assist in defending the real needs of respective customers.

Over the past 50 years, logistics, as an integral part of the reefer supply chain management has naturally evolved along with the changes that have taken place in the fresh and frozen cargo business. Earlier, reefer logistics was a concept totally shadowed by port-to- port temperature-controlled shipping. As long as sea freight arrangements were clear, logistics was regarded as a field that required not much thinking. The evolution continued into the late 20th century with the incipient involvement of some retailers in the crop-to-shelf trend. This led to an emergence of complex cold chains and a realisation that customers and reefer logistics suppliers should jump from low-value to improved supply chain standards, at least on a per case or per transport leg basis.

Expertise and intelligence

Marco Polo had a ‘smart' Adriatic  vision too and the port of Koper reflects it well. The port is offering cargo handling and warehousing services for all types of goods, including perishables as one of their priorities and with a strong focus on the produce and reefer cargo industries. Koper has the biggest container terminal in the Adriatic, where the key shipping lines serving India are calling. It has a good railway network and is excellently connected by road to the main European motorways, and of course to its main hinterland markets: Austria, Hungary, Slovakia, Germany, the Czech Republic, Italy, Croatia, Poland. A flexible road delivery facilitates to reach the core inland destinations within 24 hours.

The reefer fruit terminal started back  in the 1960s to receive citrus fruit from Israel and was the first in the former Yugoslavia to start  operating in this type  of service. They now have 290 reefer electrical outlets and 344 at the container terminal. There is XSense temperature cold chain sensor installation, phytosanitary inspection at terminal and ripening facilities for bananas (processing around 1,800 tons per month).

The reefer terminal is located next to the container terminal. It prioritises the unloading of the reefer containers. This allows the loaded trucks to depart from the port area just some few hours after vessel's berthing. Customs and phytosanitary procedures, which comply with the EU standards, are performed quickly and efficiently, including on weekends. This makes a great difference, since cargo can be delivered Saturdays and Sundays, not needing to wait until Monday, if ship from India calling Fridays. All in all,    the goods are able to leave the port within few hours. The port, therefore, really has a wider European role and value for the Indian subcontinent and   the Far East routes.

Hardwork and focus pay

We are living in a world with  demanding customers with the requirement of a complex cold chain. Therefore, reefer logistics suppliers need to closely examine the expertise in reefer trades, adaptability and agility of their logistics networks, because their services will play an ever-greater role in delivering high-performing operations.

Given today's globalisation and reefer  industry trends, the customers (retailers, fresh produce exporters, importers) are likely to experience an increased level of anxiety and concern. Reefer logistics operators or better, Third Party Logistics (3PL) perishable logistics suppliers, should recognise this.

To say that the reefer logistics industry  is becoming non-asset based or less-asset-centric is a stretch, because someone has to own and operate the assets. Having said this, what is interesting is to see the appearance of a reefer logistics provider that doesn't own assets (cold  stores, fleets, and so on), but is able to provide perishables logistics services by aggregating information, expertise, and intelligence about assets from the owners. Koper port facilitates is linked to a high understanding of the documentary, and especially the phytosanitary procedures. This is simply a must to grant the success to transport services from and to India.

How important are innovations?

For most people, a simple and quick  solution is sought-after first, with no consideration for being right. Possibly, this is due to a lack of understanding of the real customer needs. Reefer 3PLs need to provide the necessary education to their staff and spend some time with ports, suppliers and Indian exporters and importers, both ends, to jointly search the most adequate and viable solutions. A broad focus versus a classic local one comes necessarily together. Particularly, in all perishable trades, there are no simple solutions for tough or complex cases.

It is another common mistake that new,  fancy technologies, gadgets, software, Big Data are the tools to find the required intelligent solutions to increase margins or those that produce exporters or importers might need. Selective innovation methods are clearly required, but investment in new technologies might also be a bad decision leading to nowhere. Remember that there is a number of now-obsolete technologies that everyone thought would last forever, e.g. dial-up modems, all sorts of data, video and audio storage media, several computer ports, answering machines, cathode tube TVs, MP3 players, etc. Serious reefer logistics are managed by reefer experts (people!) applying common sense. This will remain forever.

Complexity can't be dealt with by  simple answers. Only peoples' focus, expertise and intelligence can seriously add value to the cold chain. So, as usual, it's all about good people in the service industry. The rest are ‘sweeteners' or ‘facilitators', but the brain, leading the perishable logistics, has to be a trained, knowledgeable human.

Branding and specialisation

Another key issue is the reefer cold  chain trademark or brand value. As a matter of fact, brand reputational value  is irreplaceable and has to be protected. Three decades ago, as much as 95 per cent of the average corporation's    value consisted of tangible assets, according to a report by Thomson Reuters. Nowadays, 75 per cent of that average corporation's value is intangible. In other words, a business' most valuable asset is its good name, its reputation. In a survey released jointly by the World Economic Forum, three-fifths of chief executives said they believed corporate brand and reputation represented more than 40 per cent of their company's  market capitalisation. That value is the organisation's brand reputational value, which creates greater profits.

Furthermore, the companies with  strong brands can better retain employees too. A recent study suggests that 80 per cent of employees between the age of 18 and 30 will leave a company if they believe it has a weak brand or no association with ethics. The cost of a compliance or ethics failure goes well beyond legal fees, court judgments, fines and penalties. It spills over into leadership distraction and turnover, forced alteration of a working profit model, and heightened scrutiny in the future. Reefer logistics sup- pliers are not hard asset-based companies. They subcontract most services to build up a proper cold chain solution.

Third Party Logistics must treat their  brand's reputational value like any other asset. They should manage it just the  way they take care of their real property and equipment.

Correct branding has to come with  proper planning and business goals. Within those and given today's globalised environment and uncertainties, strategic alliances become another key element for development. Sharing resources, capital equipment, knowledge and others by creating synergies and competitive advantage. Deals with ports, shipping lines, suppliers, cold stores are ventures that allow growing the business if the tasks of the par-ties are well defined. Typically, this category covers subcontractors or service providers, who have hardware assets in strategic points, which form a part of the full supply chain. By forming a strategic alliance this asset gets better integrated in the value chain, which increases its utilisation, hence, market value. In fact, by selecting the right strategic alliances new, smart, and alternative supply chains can be developed and offered to customers.

Take for example, Koper and Easyfresh.  They work together offering first-class services together with reputed TPG Logistics that specialises in dealing with fresh and frozen cargoes from India, Far East and East Mediterranean. The widest range of logistics and added value services for Indian perishables is assured. It's time India walks hand in hand with the world leaders.

Source : TransREporter Magazine, India & Paula Stefan paula.stefan@outlook.es

 

 


Back to News