Crystallizing Your Cold Chain - Global Trade Magazine
  February 9th, 2016 | Written by

Crystallizing Your Cold Chain

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  • Technology Changes In Temperature-Controlled #Warehousing

In September 2015, the warehouses of Lineage Logistics in Allentown, Pennsylvania, and Mira Loma, California, were equipped with high pressure processing (HPP) machines and packaging equipment. HPP is a post-packaging, non-thermal pasteurization method of killing potentially harmful pathogens, such as listeria, E. coli and salmonella, using high isostatic pressures. The process does not affect the flavors and other characteristics of the treated food, as it does not use heat.

“We’ve been successful with HPP because it’s a clean, natural, environment-friendly process for packaged foods that reduces the potential for spoilage and improves the quality of the product,” declared Tim Smith, executive vice president of Sales and Business Development, when the modifications at the two facilities were announced. “We currently have customers using the solution for a variety of categories and expect demand for HPP to grow during the next several years.”

Marc Levin, senior vice president, Business Development for key accounts at Americold, one of the leading global providers of temperature-controlled warehousing and logistics to the food industry, sees much merit in the technology. He cautions, though, that if the warehouse provider has installed it for one customer who subsequently concludes that the risk is not worth the cost, “additional customers with very similar product profiles and requirements will be needed and fast!”

Advances in technology to improve the integrity and extend the shelf life of perishables are changing the game for operators of temperature-controlled warehouses. The past year has seen a proliferation of such solutions, such as high ozone air cleaning systems to eliminate molds, fungi and bacteria, or container atmosphere control systems that manage oxygen and carbon dioxide levels and remove ethylene.

“There are consequences to controlling gasses within a warehouse that can limit access for associates and necessitate automation, which is not a cheap option,” says Levin. “We’ll be monitoring this carefully, as anything that becomes mandated will result in higher costs to manage customer orders that will need to be passed on.”

These developments support a growing trend toward fresh rather than preserved food that several perishables logistics providers have observed. Mark Smith, regional vice president of Penske Logistics, reports a slight shift over the past year from frozen to fresh, ready-to-eat products, but says that this is not a major strategic change.

“It’s not that frozen has lost its market value, it’s that share has been taken away from canned items,” he says. “There is a need to increase refrigerated space and slightly decrease dry space in the warehouse. This change alters the layout of the warehouse. Warehouses are now built with the ability to be convertible, to adapt to customer needs and preferences.”

Chris Connell, president of perishables specialist Commodity Forwarders Inc. (CFI), agrees that there has been growth both in the fresh and frozen food segments.

According to Market Research Store, a private research firm, the global food logistics market is expected to see an annual revenue growth rate of 8.74 percent through 2019. This is reflected in recent expansion moves of leading operators. CFI opened a branch in Boston this year; Americold is building a 150,000-square-foot facility in Portland, Maine, and has plans for further development, according to Levin; and Lineage Logistics acquired Columbia Colstor in January 2015, adding 52 million square feet of temperature-controlled space to its footprint.

Inside temperature-controlled warehouses, activity is up. Connell says that value-added activities such as labeling and pick-and-pack have increased considerably. “The increased customer requirement for value-added services, such as relabeling, repacking, sequencing and reconfiguring, needs space and associates,” Levin notes.

The increased activity levels and often higher velocity of traffic call for an augmented level of sophistication. Penske stresses the need for improved communication and technology upgrades to enhance stock visibility, notably a good warehouse management system.

“Automated systems are becoming more and more critical in the marketplace,” says Smith. “It helps to manage operations in a number of areas. The cost of automation today is equal to or less than labor costs and it is a lot more flexible. Automated systems are working much better today and are easier to use. There are more and more warehouses being run by smaller workforces.”

Americold has been rolling out an upgraded version of its supply chain control system. “Our customers now have full supply chain control functionality, including order management, product hold capability, report scheduling and alert management, right in the palms of their hands on their smartphones,” Levin says. “This is a powerful enhancement that enables data verification during meetings, before making critical decisions, on the road, anywhere with a web connection and web-connected smart device.”

Penske recommends that warehouse management software should be aligned with labor management software, which measures the productivity of individual workers. Without a doubt, the changes in processes and technology have cast ripples in the requirements put on warehouse staff.

“Your workforce needs to be more IT-focused, it needs the ability to adapt to time and labor-saving tools,” says Connell. “You need to depend on data flow and on data integrity, which means you need to embrace technology and you also need people who can embrace the technology.”

All these developments have brought about a lot of changes in temperature-controlled warehouses. Connell finds the difference with the prevalent set-up of 15 or 20 years ago like “night and day.”
Also, the physical configuration of facilities is changing in response to more elaborate requirements.

“There’s certainly an advantage to facilities with multiple temperature-controlled rooms,” Levin says, “since they’re able to set the rooms to different chilled temperatures independently of one another to accommodate the need. A facility with just one or two larger rooms is going to have to pick one or two temperature ranges and look to fill these larger rooms with suitable product—not always easy given the facility’s territory and competitive local landscape. Some of the very large facilities being built now only have one or two rooms and will consequently have these limitations built in.”

He adds that larger dock areas, dedicated preparation rooms or very sophisticated, very expensive automation are required and customers looking for these services need to ensure that any solution proposal submitted adequately addresses how requested value-added services will be handled and priced. “Typically these are associated with longer-term customer commitments,” he says.

Connell has a word of caution vis-a-vis highly sophisticated solutions. “There is such a thing as over-design,” he warns. “You can end up with too many bells and whistles.”

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