Posts in Food & Beverage

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The New Normal: Evolving the Global Supply Chain with the Power of Data and Technology

May 22nd, 2020 Posted by Food & Beverage, Pharmaceutical & Life Sciences, Technology, Temperature Protection, Update 0 thoughts on “The New Normal: Evolving the Global Supply Chain with the Power of Data and Technology”

The New Normal: Evolving the Global Supply Chain with the Power of Data and Technology

Authors: QProducts & Services Digital Team, Under the Direction of Paul Yadron

 

cold chain council logo

The global supply chain is evolving at a quick pace due to the current global situation. The power of data is being leveraged more, delivery models are changing, and tracking and tracing is needed now more than ever. How can supply chains keep up with this change?

 

The Cold Chain Council, hosted by QProducts & Services, is hosting their very first webinar this summer, The New Normal: Evolving the Global Supply Chain with the Power of Data and Technology. Industry-leading speakers will provide insight and discussion about current changes and developments happening in the world of cold chain supply logistics.

 

industry professionals meeting at cold chain council

What is Cold Chain Council?

 

Cold Chain Council began three years ago to gather top talent from all phases of the cold chain – including manufacturers, retail, distribution, and logistics partners – to share their perspectives on existing challenges and best practices. An intimate afternoon of networking and expert panel discussion was created as a non-conference and thought leadership event.

 

The goal of the Cold Chain Council for the food and beverage market as well as the pharma and chemical industries is to present and discuss topics from different cold chain segments within the global supply chain.

 

 

Today, two events are hosted: one for the food and beverage industry and another for the pharmaceutical and chemical industries. Each event features a full day of workshops and a limited number of attendees to ensure that Cold Chain Council is an intimate, collaborative experience every year. Taking place over an afternoon to accommodate busy schedules, topics cover current cold chain challenges so that attendees leave with a fresh perspective and actionable solutions.

vp of sales speaking at cold chain council

Previous Cold Chain Council Events

 

Cold Chain Council for the food and beverage industries is hosted by QProducts and Services. Presentations and panels feature industry professionals discussing topics from different cold chain segments in both the food and beverage industries.

 

In previous events, we have had industry expert speakers including but not limited to the following:

 

 

Cold Chain Council for the pharma and chemical industries is also hosted by QProducts and Services. Experts share their knowledge in tackling challenges affecting your transportation network. Presentations and panels also feature industry professionals discussing topics from different cold chain segments in both pharma and chemical industries. This forum setting is designed to be interactive and intimate.

 

Previous event speakers for the pharma and chemical industries have included, but not limited to, the following:

 

cold chain council webinar speakersCold Chain Council Webinar Speakers

 

Our industry-leading speakers will provide insight and discussion about current changes and developments happening in the world of cold chain supply logistics.

 

Our speakers include:

 

  • Don Durm, a 25-year veteran of PLM Trailer Leasing and Vice President of Customer Solutions. He is a recognized industry expert on cold chain transport application, regulatory compliance, and the application of technology for a smarter food safety system. He has been recognized three times as one of the rock stars of the supply chain by Food Logistics Magazine due to his work on supply chain efficiencies, regulatory compliance, and the deployment of blockchain in the food supply chain. A gifted and sought out speaker and writer on cold chain supply challenges, he is one of the authors of the internationally accepted IRTA Refrigerated Best Practices Guide distributed by the Global Cold Chain Alliance (GCCA) to help the industry meet the compliance for the Food Safety Modernization Act.

 

  • Amy Shortman, a Chartered Fellow of the Institute of Transport and Logistics, has 20 plus years of experience within pharmaceutical logistics. During this time, she has worked within operations and commercial roles while keeping her passion for creating supply chains that ensure product integrity is maintained throughout. Amy has worked within the air, sea, and road arena, and has extensive experience setting up secure supply chains for high-value freight and temperature-sensitive freight. Her penultimate role before joining Overhaul was with ASC Associates, in which Amy established in 2011 as a global supply chain business services company that specializes in the areas of temperature-sensitive, high-value products. She has been facilitating and training for over 12 years and is an IATA external facilitator for CEIV Pharma.

 

logging into the cold chain council webinar

 

Cold Chain Council Webinar Details and Registration

 

We invite you to join us on Tuesday, June 23rd, at 11 AM CST as our speakers share examples and insight into how a new evolution of the supply chain is being forged under the pressure of the global COVID-19 pandemic.

 

Learn about using the power of data to gain insight into every aspect of a transportation network, a matrix of shifts and changes in delivery models, tracking and tracing supply chain disruptions and what the future holds for the global supply chain as we navigate our way through the storm driven by SARS-CoV-2. Click here to register for the webinar. We look forward to your attendance!

 

 

woman at grocery store during covid19

COVID-19 Impact on the Food Supply Chain: Solutions for Food Service

April 23rd, 2020 Posted by Food & Beverage, Manufacturing, Temperature Protection 0 thoughts on “COVID-19 Impact on the Food Supply Chain: Solutions for Food Service”

COVID-19 Impact on the Food Supply Chain: Solutions for Food Service

Authors: QProducts & Services Food & Beverage Team, Under the Direction of Kevin Lynch and Stephen Wozniak

 

woman at grocery store during covid19The direct connection between farms and restaurants has been severely impacted, as many restaurants have had to close their doors, only offering curbside pickup. There is a widespread transition taking place in which the focus has shifted from providing to restaurants to providing for grocery stores and homes. To adjust to the current situation, some farmers and producers have closed or altered their operations. Food service fleets including Sysco, U.S. Foods, and Gordon Food Service are being utilized to replenish retail grocery. Also, food service supply companies are now selling to individuals through home delivery. As a food service distributor or food manufacturer, there are supply chain solutions to help you navigate this increased demand.

us foods during covid19

Food Suppliers Pivot Their Distribution

 

The major distribution firms that supply the food service business have taken a number of steps to deal with the situation. For example, Sysco stated that they are actively pursuing new sources of revenue by leveraging their supply chain expertise to provide services to the retail grocery sector. Furthermore, a partnership is being formed between the International Foodservice Distributors Association (IFDA) and the FMI-Food Industry Association. According to Food Management, the arrangement encourages foodservice distributors that have excess capacity in terms of products and/or transportation and warehousing services to assist food retailers and wholesalers that require additional resources to fulfill needs at grocery stores, which are experiencing skyrocketing demand.

 

For home delivery, Sysco has announced it has launched Sysco@HOME, a convenient solution allowing consumers to purchase restaurant-quality grocery items from the comfort of their own home.

 

U.S. Foods is also proceeding with a similar strategy. Chairman and CEO Pietro Satriano stated, “We are exploring new ways that U.S. Foods can leverage our business capabilities during this challenging time, including starting to sell some of our inventory to retail outlets like grocery stores and temporarily contracting some of our distribution workforce to companies experiencing a spike in demand.”

home food delivery during covid19

 

Supply Chain Food Packaging Solutions

 

As organizations work tirelessly to meet the increased demands placed upon the food industry, there are solutions to protect temperature-sensitive food shipments.

 

The ThermaPak® is a proven solution designed for the distribution of frozen and refrigerated food items. It is used as an economic and environmentally friendly alternative to dry ice and gel packs . At QProducts and Services, we engineered the ThermaPak® to retain product freshness for extended periods of time, regardless of external temperatures.

 

“Yesterday we had a refrigerated unit go down on a trailer and had to bring it back for a reload. The route had 20 cases of ice cream on it. Four of the cases of ice cream were in a ThermaPak® with no dry ice and the remaining sixteen were in an older soft side bag from a competitor with dry ice sprinkled in. The 4 cases in the ThermaPak® were still frozen when the truck arrived and the 16 in the older bags had begun to soften to the point that they could not be saved. Definitely a testament to the quality of your product,” stated the Vice President of Operations at a Leading Food Service Distributor. Learn more about how this Florida based food service distributor improved ice cream delivery practices using ThermaPak®.

thermapak for temperature sensitive shipments

 

Passive Temperature Protection Versus Active Temperature Protection

 

Passive temperature protection does not require the need for a power supply, while active temperature protection does. Our ThermaPak® solution works by passive temperature protection, ensuring quality, safety, and efficacy of temperature-sensitive products within a pre-defined range. In addition, passive temperature protection solutions provide added flexibility in areas of your network where refrigerated capacity is limited and/or comes with a high premium.  .

 

Furthermore, passive temperature protection can complement active temperature protection by creating the ability to combine frozen and fresh in a single temperature compartment.  Given the current global and economic state, it’s important to have a packaging solution that can adapt to your needs.   With passive temperature protection, you have more options to cost-effectively transport your food items regardless of the quantity.

 

At QProducts & Services, our team was able to engineer the Cap and Wrap PalletQuilt® for simple combo loading. It would hold the integrity of frozen items, such as ice cream, shipped on a refrigerated trailer set at 36°F. Learn more about how this solution can extend the life of your fleet, increase operational flexibility, and cut costs.

 

monitoring temperature of food

Final Thoughts

 

As we move forward through these changing times, we realize many manufacturers are in a position where they need to adapt and evolve to the current disruption. Some food supply chains are adapting daily. As Civil Eats stated, “every single day is something new.”

 

Our team of temperature protection experts at QProducts and Services is here to provide solutions to fit your adapting food supply chain. We hope this information was insightful, and we encourage you to reach out to us should you have any questions or inquiries on the solutions we can provide.

kombucha fermenting

Keeping the Kombucha Cold Chain Intact

March 23rd, 2020 Posted by Food & Beverage, Manufacturing, Temperature Protection 0 thoughts on “Keeping the Kombucha Cold Chain Intact”

Keeping the Kombucha Cold Chain Intact

Authors: QProducts & Services Food & Beverage Team, Under the Direction of Kevin Lynch and Stephen Wozniak

 

 

Critics say kombucha is just another health fad that will soon fizzle out, but the market proves otherwise. Its popularity has made the beverage market soar, and it has given manufacturers opportunities to expand into the kombucha business. Kombucha brewers are impacting the beverage industry at an accelerated pace, and the rise of this fermented beverage has kombucha brewers seeking solutions to protect their brand and product integrity throughout the cold chain.

kombucha fermenting

Analyzing Temperature Thresholds of Kombucha

 

There are important considerations in order to maintain the health of the cultures when transporting kombucha. According to Kombucha Brewers International, cold storage ought to be maintained at 34-40°F (1.1-4.4°C) to slow the fermentation of the kombucha throughout the supply chain. Unpasteurized kombucha contains live cultures and can continue to ferment and raise alcohol content over time, especially if transported, stored, or displayed without being stored in cold temperatures.

 

Passive temperature protection can make this happen, given that it ensures certain commodities maintain a specific temperature range during the shipping process.

temperature monitoring

Alternatives to Refrigerated Transport

 

It is imperative that the integrity of kombucha is protected during fermentation and during transit. Although kombucha brews best between 68-78°F, the temperatures associated with transporting the product may vary, depending on the living cultures and alcohol content. According to GT’s Living Foods, their kombucha is a raw food containing billions of living probiotics so it should always be kept in a chilled refrigerator between 33-37°F.

 

On the other hand, Kombuchade crafts their kombucha as a probiotic sports drink that is stable at ambient temperature for distribution and then requires refrigeration once received at the retailer. Matt Lancor, founder of Kombuchade, states “We can ship via ambient temperature. As long as it not freezing or at boiling temperatures, we are happy.” So, how do you keep the product at ambient temperature?

 

There are certain products on the market that capture the existing environment of the freight and help maintain a safe temperature range throughout the delivery process. PalletQuilt® does just that, in which it protects the cargo from extremes of both heat and cold. PalletQuilt® can be applied and removed in minutes, and is recyclable.

 

As mentioned above, there are alternatives to refrigerated transport. Most kombucha manufacturers are currently using thermal box liners to maintain their cold chain. Insulated thermal box liners are lined with reflective metalized film to keep temperatures consistent during transit while protective bubble lining cushions your items. If you’re considering foil bubble box liners for your products, here at QProducts & Services, we provide cost-effective, versatile insulated shipping liners that supply thermal protection for parcel-sized shipments. These QFoil™ Box Liners are made with a thicker foil and bubble combination for more extreme transit conditions.

 

qfoil box liner

 

Kombucha’s Impact on the Beverage Industry

 

According to Forbes, in response to the falsely labeled alcohol content on some kombucha bottles back in 2010, the Alcohol and Tobacco Tax and Trade Bureau updated its guidelines to highlight that it would regulate any kombucha products that contain 0.5% or more alcohol by volume, or ABV. Many kombucha manufacturers took different routes in response to this regulation. Some complied with the ABV guidelines while others created consciously labeled kombucha beer brands.

 

To remain compliant, many kombucha manufacturers have undergone reformulation or modification of their brewing processes in order to comply with federal law. While the specifics of each manufacturer’s process remain confidential, most have manipulated the yeast, either through filtration, centrifuge, or other means.

“We have been fortunate to be able to work with the University of Wisconsin to help refine our fermentation process in order to keep our product in compliance,” said Vanessa Tortolano of NessAlla Kombucha.

 

In addition, kombucha has made a major impact on the food and beverage industry. Evidence-based health benefits have driven consumer demand and many people believe that it helps treat their health problems. According to Healthline, it is a source of probiotics, contains antioxidants, can kill harmful bacteria, and has been shown to improve LDL and HDL cholesterol levels. Similarly, analysts believe that more people are drinking kombucha because there has been more interest in healthier drinks. People who are moving away from sugary drinks and sodas want a little more taste than plain water.

 

“I was inspired by GT’s kombucha to formulate probiotic sports drinks using only naturally fermented, organic plants. I believe that we have created the cleanest, and most functional sports drinks on the planet,” exclaimed Matt Lancor, founder of Kombuchade.

brewing kombucha

Kombucha Industry Growth

 

Furthermore, in the past decade, kombucha has become an influential player in the global beverage economy, especially in the United States. The global market size of the fermented beverage is anticipated to hit $6.2 billion by 2026, according to a report by Acumen Research and Consulting.

 

In 2016, PepsiCo announced that it had entered into a definitive agreement to acquire KeVita, a leading North American creator of fermented probiotic and kombucha beverages. Similarly, in 2018, the Coca-Cola Company had acquired kombucha maker Organic and Raw Trading Co., which makes the MOJO brand of naturally fermented, live culture, organic kombucha drinks. Although the commercialized market history of kombucha is as recent as a little over twenty years, its market size and product variety are growing fast.

market growth chart

Final Thoughts

 

Kombucha brewers recognize the risk in making changes to how their product travels through the supply chain. They also understand the importance of operating a cost-effective supply chain to remain competitive in a growing industry. Through a strategic partnership with Riskpulse, QProducts & Services is now able to quantify temperature risks in advance of a brewer shipping an order.

 

Furthermore, QTechnical Services, a division of QProducts & Services, specializes in executing live temperature studies to qualify performance of a passive temperature protection solution. QTechnical Services collaborates with the brewer to understand their unique requirements, then creates a custom test protocol to assure valuable data is collected during the temperature study. A detailed report verifies the results allowing the brewer to make informed decisions.

 

Overall, the kombucha market is very competitive and is driven by an increase in health and wellness interests, in addition to the growing consumer demand for health products and natural ingredients. With the explosive industry growth and rise of various brands including GT Living Foods, KeVita, Kombuchade, Health-Aide, Brew Dr. Kombucha, and many more, manufacturers are driven to provide consumers with the best product while protecting their brand and product integrity at all stages of the supply chain and consumer consumption.

 

We believe in the future of this industry, and we believe passive temperature protection can continue to help this beverage market soar.

Air Cargo Security: Maintaining Product Quality & Preventing Threats

November 19th, 2019 Posted by Air, Food & Beverage, Pharmaceutical & Life Sciences, Transportation 0 thoughts on “Air Cargo Security: Maintaining Product Quality & Preventing Threats”

Air Cargo Security: Maintaining Product Quality & Preventing Threats

Authors: QProducts & Services Team, Under the Direction of Paul Yadron, Sr. VP of Sales

 

 

 

 

U.S. air cargo supply chain handles more than 50,000 tons of cargo each day, of which 7,500 (15%) is designated for domestic passenger carriers, and the remaining 85% is designated for all-cargo carriers, according to the Transportation Security Administration (TSA). Over the past 3-4 decades, air cargo transport has offered a means by which to expeditiously move cargo from points of production and manufacture to points of distribution and sales.

 

Major events over the last few decades have led to increased security measures for the air cargo supply chain, while also allowing us to learn about possible additional security threats and how to prevent them. The quick transport of products by air is especially important for perishable goods, as a major benefit of shipping goods by air is timing. So how do we secure these threats, and how do we maintain the quality of our products?

 

air cargo plane

 

 

 

What is Air Cargo Security?

 

First and foremost, the air cargo industry consists of a complex distribution network linking manufacturers and shippers to freight forwarders, off-airport freight consolidators, and airport sorting and cargo handling facilities where shipments are loaded on and unloaded from an aircraft. Under the Aviation Transport Security Act of 2004, air cargo is defined as goods, other than baggage or stores, that are transported by aircraft. Items shipped by aircraft generally consist of time-sensitive and high-value commodities. Common examples of air cargo include high-value machine parts and manufacturing equipment, electronic components for manufactured goods, consumer electronics, jewelry, and perishable items such as flowers, fruits, fresh fish, and pharmaceuticals.

 

Air cargo security measures aim to protect cargo from theft, but they also secure cargo against incoming materials such as bombs or drugs. Security is a very critical element of the air cargo supply chain. Regulators, organizations, and the industry overall are working together to further secure the air cargo supply chain while ensuring the flow of commerce.

 

palletized technology

 

Maintaining Air Cargo Product Quality

 

As we discussed, a major benefit to shipping items via air is time. The faster a product can get to its destination, the better. When it comes to food, beverage, and pharmaceuticals, these items cannot last very long in transit as the biggest challenge of keeping perishable products fresh has to do with temperature.  The longer an item stays exposed to high temperatures, the quicker it loses its freshness. We all know that temperature-controlled shipping is critical for delicate materials such as pharmaceuticals, medicines, and food.

 

For the pharmaceutical industry, the IATA (International Air Transport Association) Time and Temperature Sensitive Label became effective July 1st, 2012. This label ensured the integrity of the time and temperature of sensitive healthcare air cargo shipments and also ensured that the air cargo supply chain is prepared to handle the demands of these healthcare shipments. The overall aim is to ensure patient safety through effective cold chain distribution. Therefore, it is imperative that airlines, ground handling agents, and other stakeholders within the supply chain are familiar with the regulations and appearance of the label. It is also imperative that effective cold chain solutions are put into place to secure the successful air transit of healthcare products.

 

Unfortunately, one of the main costs with the transportation of perishable items such as fruit and vegetables is wastage due to spoilage related to inadequate temperature management during transit. Keeping perishable food items cool, cold, frozen, or deep frozen is the only way to guarantee product quality and shelf-life as it arrives at the end of a transportation process. Leveraging the proper cold chain equipment such as palletized technology can increase product shelf-life, increase profits, and reduce food loss.

 

security and protection for air cargo

 

 

Security Threats to Air Cargo

 

In the United States, security of air cargo shipments and international shipments to and from the U.S. is regulated by the Transportation Security Administration (TSA). Security threats can impact product integrity and create safety issues in certain markets. Security threats can damage the product altogether, resulting not only in lost product, but additional costs. Historically, security measuring surrounding all-cargo operations have focused on the threat of hijackings, particularly those that could result in using the aircraft as a weapon of mass destruction. According to the Congressional Research Service, a 1994 incident involved an off-duty FedEx flight engineer who attempted to hijack a FedEx DC-10 aircraft and crash it into the company’s Memphis, TN headquarters. At the time, there was no federal requirement to screen personnel or personal baggage carried aboard cargo aircraft. This particular hijack attempt was unsuccessful; however, the threat still remains in the air cargo industry.

 

Another security threat to air cargo includes the threat of explosives. A long-standing concern for cargo loaded on passenger aircraft, several incidents have shown that U.S. bound air cargo shipments are targeted. For instance, the Congressional Research Service reports that on October 29, 2010, intelligence and law enforcement agencies in Dubai, United Arab Emirates, and in the United Kingdom discovered explosive devices concealed in packages shipped as air cargo bound for the United States. Authorities in the U.S. were able to bring down the aircraft; however, the details of this incident highlighted a number of specific challenges to securing air cargo. First, the explosives were difficult to detect using explosive detection equipment and canines. Second, questions were raised regarding the implementation and effectiveness of risk-based targeting methods to identify suspicious cargo. And third, the multiple international airports and air cargo facilities that served as intermediate transfer points illustrated the highly interconnected nature of the international air cargo industry, which necessitates close collaboration and coordination among governments, forwarders, air carriers, and airport operators to address security.

 

While we don’t want to assume this threat, the “Insider Threat” still presents a threat to air cargo security. While shippers may have limited ability to target a specific aircraft or even predict if an item will move on a passenger aircraft or an all-cargo aircraft, insiders working in the air cargo industry could use their access and knowledge to carry out an attack. The Congressional Research Service states, “Historically, in the United States, air cargo supply chains have been infiltrated by organized criminal elements conducting systematic theft and smuggling operations. Overseas, there is growing concern that terrorist networks could infiltrate airports and air cargo operations to gather information about possible weaknesses and exploit vulnerabilities in the supply chain.”

 

Lastly, theft is a very real concern in the supply chain, including the air cargo supply chain. While cargo is more vulnerable to theft when hauled by a truck, cargo theft gangs are seeking opportunities to steal cargo from airports as some items shipped by air tend to be high value items. According to Air Cargo Eye, in February 2017, thieves escaped with rare 15th and 16th century antique books valued at more than $2.3 million after they broke into a facility at London’s Heathrow Airport. In March 2017, thieves were seen masquerading as police officers while using what were reported as police vehicles intercepting a cargo of $1.7 million of banknotes shortly after the aircraft had arrived at Johannesburg’s OR Tambo International Airport.

 

transportation security administrationPreventing Air Cargo Threats

 

Whereas the air cargo industry has favored risk-based approaches for both cargo planes and cargo placed aboard passenger aircraft, some policymakers have argued that more comprehensive screening of cargo is needed to make cargo security comparable to the screening of airline passengers and baggage. The 9/11 Commission Act of 2007 required 100% physical screening and inspection of all cargo placed on passenger aircraft. Acceptable screening methods include x-ray systems, explosives detection systems, explosives trace detection, TSA-certified explosives detection canine teams, and physical searches conducted in conjunction with manifest verifications. Cargo documents and known shipper verification are not acceptable screening methods.

 

While TSA has approved a number of detection systems for screening air cargo to meet the requirements of the 100% screening mandate, none of these devices have been approved for the screening of palletized or containerized cargo. According to the Congressional Research Service, it is estimated that palletized cargo makes up 75% of all cargo carried on passenger planes. The lack of an approved technology for screening pallets leaves the industry dependent on work-around solutions, largely involving the off-airport screening of cargo combined with approved supply-chain security measures to prevent tampering after the item is screened.

 

In regard to air cargo theft, organizations can take the following actions to help prevent theft in the industry:

  1. Thoroughly screen prospective employees
  2. Carefully select transportation partners and intermediaries
  3. Provide security training within your organization
  4. Incorporate surveillance into the duties of security guards, and have guards patrol away from perimeters
  5. Leverage technology such as equipment tracking, security seals, or locks
  6. Periodically conduct security audits

 

In addition to the organizations themselves being involved, various supply chain security measures provide options for preventing and detecting tampering while maintaining the integrity of the shipment. These measures include tamper-evident and tamper-resistant packaging, cargo tracking technologies, and identifiers to designate screened cargo.

 

air cargo packages

 

 

Final Thoughts

 

Today, thousands of products are being delivered by air freight. This service has made it possible for people and organizations around the world to have the goods needed for everyday life. Several industries have been able to grow internationally due to air freight, although there are challenges faced along the way.

 

The industry still faces the challenge of security threats and how to combat them to ensure the safety of the product and passengers. Technology continues to advance to screen cargo for these threats, and technology advances even further to maintain product quality and safety aboard an aircraft. The Federal Aviation Administration (FAA) forecasts that steady U.S. and world economic growth will drive more modest annual increases of about 3% in air cargo shipments over the next two decades. Innovation, education, and due diligence will continue to help the industry combat air cargo security.

 

As the air cargo supply chain continues to grow, I hope this information was helpful in answering some of your questions regarding air cargo, security, safety, and product quality.

 

 

 

 

 

 

Cannabis Disruption in the Food & Beverage Industry

September 17th, 2019 Posted by Food & Beverage, Transportation 0 thoughts on “Cannabis Disruption in the Food & Beverage Industry”

Cannabis Disruption in the Food & Beverage Industry

Authors: QProducts & Services Food & Beverage Team, Under the Direction of Kevin Lynch and Stephen Wozniak

 

 

 

 

The recent and continuous growth of the cannabis industry has attracted many businesses to join in on this lucrative and evolving space. With the recreational use of cannabis now legal in 11 states, and medical marijuana legal in 23 states, cannabis is on its way to possibly becoming an $80 billion industry by 2030, according to estimates by Cowen, Inc. The explosive growth of this space in a short period of time has created a need for a new era of supply chain management to help adapt to new regulations, distribution models, and other challenges related to a highly-regulated but thriving industry, according to Green Entrepreneur.

In the food and beverage industry specifically, we’re experiencing mainstream adoption from food and beverage companies, new and increased competition, and challenges in the supply chain.

 

What is Cannabis?

 

Cannabis, also referred to as marijuana, comes from a group of three plants with psychoactive properties: Cannabis sativa, Cannabis indica, and Cannabis ruderalis. When the flowers of these plants are harvested and dried, you’re left with cannabis, one of the most common drugs in the world. It is made up of more than 120 components, also known as cannabinoids, of which we can find cannabidiol (CBD) and tetrahydrocannabinol (THC). While THC is psychoactive, CBD is not, and you can find cannabis products that contain just CBD, THC, or a combination of both.

 

cannabis plant

 

Where Did CBD Come From?

 

Cannabidiol (CBD) is a compound extracted from hemp or marijuana. The 2018 Farm Bill excluded hemp from the definition of marijuana and removed it from the Controlled Substances Act (CSA).

 

CBD was first discovered by Dr. Roger Adams and his team at the University of Illinois in 1940, however, its structure was not made clear until 1963. While it may lead some to assume that CBD is a newly discovered ingredient, cannabis and CBD have a history that dates back thousands of years. According to CBD Origin, the first documented use of cannabis-derived medicine dates back to 2737 B.C. It can be said that Chinese Emperor Sheng Nung used a cannabis-infused tea to aid with a variety of ailments including memory, malaria, rheumatism, and gout. Throughout history, cannabis and CBD have been used for therapeutic purposes, however, during the rise of modern medicine, it was not recognized due to a lack of scientific evidence.

 

More recently, and with the legalization of medical marijuana, researchers have been prompted to dive more into CBD and its potential medicinal uses. While the stigma towards CBD and cannabis has changed over the last few decades in the United States, we are still in the early stages of research, legalization, and recreational use. However, with the federal legalization of hemp and hemp-derived CBD, more and more CBD products are being sold online by major retailers including Sephora and Neiman Marcus.

 

 

cbd oil structure

 

The Legalization of Hemp

 

The Agriculture Improvement Act of 2018, also known as the 2018 Farm Bill, was signed on December 20th, 2018, and will remain in force through 2023. The passing of the 2018 Farm Bill allowed the legalization of hemp agriculture and products in all 50 U.S. states. In the United States, hemp plants are defined as any cannabis plant that has 0.3 percent or less THC. Any cannabis plant that has a THC content greater than 0.3 percent is classified as marijuana. From a chemical composition standpoint, hemp cannot get you high.

 

According to Analytical Cannabis, the increased legality of hemp is largely to thank for the rapid acceleration in diversity and availability of hemp-derived CBD oil. Unless you go to a marijuana dispensary to purchase CBD oil, the CBD oil that you find is made exclusively from the hemp plant, which is also referred to as hemp oil or CBD hemp oil. Since CBD can be extracted from hemp, CBD is legal. However, there is still work to be done when it comes to FDA regulation. According to a leader of the U.S. Food and Drug Administration’s new cannabinoid work group, there is more research to be done before federal authorities can allow CBD treatments into food and beverage products. Just like any other new ingredient going into food or drugs, the FDA is unlikely to approve over-the-counter use without further research on the ingredient and its health benefits. With that being said, certain companies with a loyal customer base are likely to wait until CBD is FDA approved prior to marketing CBD products to consumers. While FDA approval is in the works, fortune 500 companies are educating themselves on the evolving market, investing heavily, and laying the groundwork within their networks.

 

 

hemp oil

 

Mainstream Adoption in Food & Beverage

 

Cannabis-infused food and beverages are becoming a major trend as legalization grows across the country. According to Green Market Report, consumers in California purchased $180 million worth of cannabis-infused food and drinks in 2016, which rose to 18% in 2018. In Washington, sales of cannabis-infused treats increased 121% in 2016, and since Colorado first allowed recreational cannabis use, sales tripled from $17 million in the first quarter of 2014 to $53 million in the third quarter of 2016. Dixie Elixirs, a Colorado-based company that sells cannabis-infused products such as truffles, chocolate bars, mints, and juices, was one of the first companies to enter the market.

 

According to Food Institute, it is rumored that the Coca-Cola Company is reportedly in talks with Aurora Cannabis about developing cannabidiol-infused beverages, and is said to be particularly interested in drinks that can ease inflammation, pain, and cramping. Pepsi and Starbucks have indicated that they are monitoring developments, however, they have no plans at this time to pursue cannabis based or infused beverages. Furthermore, some major players including Constellation Brands, Molson Coors Brewing, and AB InBev have already invested in CBD and THC-infused non-alcoholic beverages. Given the mainstream adoption by many organizations, certain companies are reluctant about getting into CBD-infused products, even where they are legal. Many wonder if the products will harm their reputation or if they will be well-received by customers.

However, the data tells us that those apprehensions could likely be proven wrong. According to a study from A.T. Kearney, 30% of Americans are willing to try a cannabis-infused non-alcoholic beverage, and 17% would be interested in an alcoholic drink containing the substance.

 

Similarly, alcohol consumption is declining globally, and consumers are moving away from sugar-filled drinks in favor of healthier alternatives. More recently, New Age Beverages announced that it aims to release a line of CBD-infused drinks under the Marley Mellow Mood brand. While a market for non-alcoholic cannabis-infused beverages is emerging, this could lead to a disruption of the beverage market as new product lines are released and marketed as health drinks. Overtime, products using CBD as an ingredient could be considered part of the health and wellness space.

 

Although there is an emerging market for non-alcoholic cannabis-infused beverages, the wine industry has also started to develop cannabis-infused wines. California-based Cannavines has already released two CBD-infused wines: Red Blend x Headband and Chardonnay x Sour Diesel.

 

 

cbd infused beverages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New and Increased Competition

 

The explosive growth of cannabis has caused companies across the food and beverage industry to take notice. The legalization of cannabis presents a “once-in-a-generation” opportunity for food and beverage companies to take action and establish themselves as dominant players in a competitive market. As certain organizations are exploring the market and learning about the value cannabis can have on their business, investors seem to be getting in on what some are calling “The Green Rush.”

 

Constellation Brands is already positioning themselves by taking advantage of the opportunity as they announced as of October 1st, they would acquire a 9.9% minority stake in Canopy Growth, a Canadian marijuana company. The $191 million deal will allow Constellation Brands to develop cannabis-infused beverages and not only stay ahead of evolving consumer trends, but stay ahead of the competition as well. According to The Wall Street Journal, Rob Sands, Constellation Brands’ CEO, stated that he doesn’t consider marijuana a serious threat to the beverage space, but that Constellation isn’t going to “stand around twiddling its thumbs” as the market grows.

 

According to the New York Business Journal, cannabis company Elev8 Brands Inc. recently purchased New York-based distributor YP Natural Inc., which distributes mainstream, non-CBD natural brands including Mondelez-owned Tate’s Bake Shop. The move is in an effort to expand their distribution and work to bottle their own brand of iced tea infused with CBD. Additionally, cannabis company Newstrike Brands Ltd. struck a deal to create co-branded edibles with Canadian specialty foods company Neal Brothers Inc., with the goal of creating cannabis-infused beverages. Across the U.S. and Canada, this expansion presents the potential opportunities for food and beverage companies to enter the market or possibly encounter increased competition within a new market.

 

 

cannabis green rush

 

Challenges in the Supply Chain

 

In the U.S., California’s market is by far the largest in both geography and in the number of users regarding the cannabis industry. California distributors believe that they can develop reliable logistics to support the current cannabis market that would solve challenges across other regions, should cannabis become legal at the federal level. Currently, the nation faces the challenge of cannabis distribution as federal laws currently prohibit the transportation of cannabis across state lines. Because cannabis is illegal at the federal level, freight trucks that are regulated by the Department of Transportation are unable to carry cannabis. In addition to logistics operations, the cannabis industry still faces the stigma against the trade and the challenges that come with financial transactions as well.

 

The Wall Street Journal states that for more than 20 years, since California legalized cannabis for medicinal use in 1996, growers or cooperatives handled the delivery of their products to end users themselves. C4 Distro, a new cannabis distribution company, has already begun to implement a modern, advanced supply chain to California’s cannabis industry. Similar to beer distribution, manufacturers deliver their products to C4’s facilities where testing and taxes are handled. Then, the products are deployed to stores via the sales team, delivery teams, and trucks. However, alcohol is a legal product at the federal level while cannabis is not. Also, operators that serve other industries must be licensed specifically to handle cannabis, and those facilities would need to comply with state regulations. More recently, all cannabis goods for sale in California must be tested at licensed labs and have labeling showing the amount of THC in the product and must be sold in child-proof packaging.

 

Jennifer Lee, Partner and Cannabis Leader for Consumer Advisory and Analytics at Deloitte, stated “Most current and likely cannabis consumers want a variety of products offered at reasonable prices from suppliers who can vouch for the safety and origin of those products. Cannabis companies will need to have secure supply chains to protect the quality and integrity of their products, and retailers will need to meet consumer expectations, including providing a positive, engaging retailing experience and protecting the privacy of their customers, especially online.”

 

However, in many ways, the supply chain developing around legalized marijuana in California could lay the groundwork for an effective supply chain if cannabis were to achieve legalization at the federal level. The companies in California that are currently building a “cannabis superhighway” throughout the state similar to beer distribution could become well-positioned to handle logistics, merchandising, and compliance during the process while the drug is not fully legalized throughout the nation yet. In the future, it’s possible that we could see cannabis become a major part of the food and beverage supply chain, specific to alcohol, due to the involvement throughout the distribution process.

 

cannabis production

Final Thoughts

 

While there is increasing acceptance, there is still a need for education in the cannabis market. Due to the state by state legalization in the U.S., we have the opportunity to learn what is needed for a successful supply chain and we can also learn what could go wrong on a smaller scale.

 

For many organizations, the combination of existing profitable operations, advanced technology, and the prospect of gaining market share is exciting and presents many growth opportunities in an evolving market. From a supply chain perspective, businesses should be prepared and educated on the impact that cannabis could have on the food and beverage space specifically. From mainstream adoption by some of the major players to challenges and growth in certain states, companies have the opportunity to make the right moves ahead of the competition.

 

As cannabis continues to have an impact on the food and beverage industry, I hope this information was helpful in answering some of your questions regarding our supply chain, competition, and an outlook on the market.

How Blockchain is Being Used Today in the Food & Beverage Industries

September 4th, 2019 Posted by Food & Beverage, Technology 0 thoughts on “How Blockchain is Being Used Today in the Food & Beverage Industries”

How Blockchain is Being Used Today in the Food & Beverage Industries

 

Author: Kevin Lynch

 

 

 

 

While there has been a lot of talk in the media and we are seeing it revolutionize across many industries, blockchain technology is impacting the food and beverage industries faster than we realize. From Walmart to IBM, large, well-known companies are recognizing the importance of digitalizing our food and beverage system and are implementing the necessary procedures in order to trace food more accurately across the supply chain, combat food-borne illness, and bring improved transparency and efficiency to the global food supply chain.

 

What is Blockchain and How Does It Work?

 

Simply put, blockchain is a chain of “blocks” across a computer database that stores information. As more information is stored, more “blocks” are added to the chain. While this information can be stored, it cannot be copied. With most transactions, there is an intermediary such as a bank. The blockchain network has no intermediary or central authority – the information is transparent to anyone who has access to it. So how does it work? Think of a blockchain like a Google spreadsheet. The spreadsheet contains information about the many transactions of data, which then generates what is called a “hash,” or a combination of numbers and letters. As each transaction occurs, a “block” of digital data is created and the blocks become connected or chained together. As soon as a new block is formed, it can no longer be changed.

blockchain

 

Improving Food Traceability

 

With blockchain technology, organizations can trace the entire lifecycle of food products from origin through every point of contact on its journey to the consumer. The Food Trust Solution, created by IBM, is the first blockchain safety solution that allows transaction partners to confidently and securely share food information, creating a more transparent and trustworthy global food supply chain. According to IBM, simplifying the food supply system could help consumers eat well, vendors save money, and omit the negative news stories in the media.

 

From leafy greens such as spinach and romaine lettuce to fresh fruit and vegetables, organizations such as Albertsons Companies, the world’s second-largest supermarket in terms of sales, are testing out IBM’s Food Trust blockchain. Announced this Spring, they began piloting the blockchain with suppliers of romaine lettuce, a product which was recently linked to a widespread outbreak of E-coli.

 

Additionally, Walmart issued a mandate to all of their suppliers of leafy greens, including spinach and romaine lettuce, stating they have to adopt blockchain by September of 2019.

 

In the food supply chain, information such as farm-origination details, batch numbers, processing data, factory information, expiration dates, storage temperatures, and shipping details are all valid sources of information that could be accessed through the blockchain. Having better food traceability through blockchain technology across the food supply chain allows companies to help reduce the spread of food-borne illnesses by pinpointing issues in the food chain through these blocks of data. At the same time, this could help avoid massive losses for retailers and suppliers at the time of a recall.

 

All of the transactions for one item of food can be seen and validated at any point in time in the blockchain. This will allow every party in the food supply chain to have a better picture of the lifecycle of the product, and these sources of data cannot be altered or tampered with.

 

If anything happens to a product along the line of production and distribution, organizations leveraging blockchain can easily pinpoint the source or track whomever is accountable.

 

“With the promise of fast and secure end-to-end product traceability, blockchain is easily one of the most energizing – and complex – technological developments of the past few years,” stated Melanie Nuce, Senior Vice President of Corporate Development at GS1 U.S. At the present, companies are using blockchain to continuously improve traceability within the food supply chain. In the near future, consumers may be able to trace their food from “farm to fork” with the scan of a QR code.

 

romaine lettuce

 

 Combatting Food-Borne Illness

 

Food safety is not just a food or public health issue, it is a supply chain issue. Similar to our ability to better trace food across the food supply chain with blockchain technology, blockchain is becoming increasingly prevalent in food safety. When foodborne illnesses occur, it is difficult to trace the source of contamination using traditional food supply methods, such as paper trail.

 

Last year, the World Health Organization published that an estimated 600 million people fall ill after eating contaminated food. In addition, according to the Centers for Disease Control and Prevention, about 1 in 6 people in the United States get sick from foodborne illnesses each year. With blockchain technology, the data sources available could provide links to trace these outbreaks more effectively and possibly limit the number that occur by more accurately tracing contaminated and diseased products.

 

According to Frank Yiannas, the Food and Drug Administration’s (FDA) deputy commissioner for food policy and response, the FDA is using blockchain to identify the sources of food safety issues, with the goal of creating more transparency in the food system.

 

So how could blockchain help the FDA track food sources faster? When the E-coli outbreak was announced to the public in November 2018, the FDA spent several days tracing the outbreak to farms in California, as many organizations are still using old methods of paper data and cabinet filing. According to tests conducted by Walmart and IBM, capturing the tracking information can happen in as little as 2.2 seconds with blockchain. As Don Durm, Vice President of Customer Solutions at PLM, states, “Blockchain technology has proven that we can trace food to its origin in a very complex and messy food supply chain that would normally take two weeks or more, to an astounding 2.2 seconds.” In the 2008 China incident, about 30,000 infants fell ill after consuming milk contaminated with melamine. This incident addresses another example of the importance of leveraging blockchain technology to reduce subsequent losses incurred due to contaminated products. With blockchain, there is no missing information when it comes to the history, location, and status of a food product. Having the ability to exactly pinpoint where the tainted food originated, where it was distributed, and where it was served or sold is vital in combatting food-borne illness in our food supply chain.

 

In August 2017, Walmart joined IBM’s Food Trust blockchain pilot along with other suppliers including Kroger, Nestle, Tyson Foods, and Dole. With a digital food system, these companies recognized the importance of becoming a proactive contributor to eradicate the challenges in our food system. For example, many of the mangos sold in Walmart stores are mostly grown by small farms in Central and South America and then transported by land, air, and sea to stores in the United States. Tracking a package of mangos using traditional methods can take several days or even weeks. With blockchain technology, this tracking process can be simplified and minimized to minutes, if not seconds. In the case of a recall or outbreak, stores can quickly access the source of the contamination through the blockchain and remove the mangos from the shelves the same day, versus using a traditional method that takes days or weeks, thus risking further complications from the contamination.

As part of the IBM Food Trust, they provide full transparency of food products from tracing, certifications, and fresh insights. Tracing is likely the most imperative piece of the IBM Food Trust as it can trace food products within seconds, show location or status, and verify credibility or safety of each product. Moreover, besides tracking recalls and contaminated products, blockchain technology has the capability of tracking spoilage or expired products as well. For example, with the implementation of temperature sensors in shipping containers, alerts can be sent and stored in the blockchain when a product goes above or below a specific temperature. When products sit at a higher temperature, foodborne illnesses are more likely to manifest, so having temperature records can prevent potentially tainted foods from making it to store shelves.

 

ibm blockchain technology scanning oranges

 

Bringing Transparency & Efficiency to the Food Supply Chain

 

IBM’s Food Trust is a great example of a company that is currently using blockchain to help bring transparency and efficiency to food supply chains and food safety. Real-time certifications, test data, and temperature data ensure that proper food handling protocols are met.

Secondarily, Greenfence, the food industry’s first remote auditing and certification platform, is leveraging blockchain technology to identify the people, locations, distributors, equipment, and anything else involved in the farm-to-table process of the food supply chain. Some of the advantages blockchain technology brings within the food supply chain include the following:

  • Any attempts to tamper with a food item as it moves through the food supply chain can easily be identified with blockchain technology
  • Stores and supermarkets can identify and remove products from their shelves once a potentially contaminated or hazardous product is identified
  • Consumers can be reassured that the food they are buying and eating is what the label states

 

In addition, blockchain could help eradicate counterfeits and food fraud in our global food supply chain as the data is much less vulnerable to being tampered with or lost. PricewaterhouseCoopers (PWC) estimates that food fraud is worth $52 billion globally each year. With blockchain, providing full visibility and traceability allows for better control over the food supply system, accurate data, and better customer satisfaction or customer trust in our global food supply.

Health supplements company Blackmores and dairy products supplier Fonterra have recently worked together to run a pilot program to prevent food fraud – a practice that involves packing foods with lower quality or counterfeit ingredients – using blockchain. Products will also be tagged with QR codes, a code used for storing information. These organizations strive to utilize blockchain to achieve supply chain traceability and transparency while boosting customer confidence. Moving forward, it’s going to be a continuous effort across all parties involved in the food supply chain to bring more transparency to our producers, retailers, and consumers.

 

blockchain technology 

Final Thoughts

 

Blockchain technology not only has the potential to transform the food industry, it has already begun to. With large, well-known companies such as IBM and Walmart implementing and mandating blockchain for their food supply chain efforts, it’s only a matter of time before we see a larger global shift of organizations leveraging blockchain technology.

 

However, for blockchain to work effectively, organizations need to transition from traditional styles of record-keeping such as the cabinet filing of paper documents to digital solutions that allow the data to be encrypted in a blockchain. For anyone interested in learning more about blockchain technology and its impact on the food and beverage industry, I hope this information was helpful in providing more information on a complex, exciting topic.

 

 

About QProducts & Services:

QProducts & Services is a manufacturer of passive temperature protection and cargo security solutions for the global supply chain. For over 25 years, they have developed innovative, cost-saving solutions for transporting temperature sensitive commodities. QProducts & Services has expanded their product line to include cargo security solutions and wireless temperature monitoring technologies. Manufactured just outside of Chicago, IL, their patented products are noted for durability, performance and reliability in protecting the integrity of shippers’ cargo throughout the supply chain.

TOP 5 COLD CHAIN DRIVERS FOR 2020

August 2nd, 2019 Posted by Food & Beverage, Temperature Protection, Update 0 thoughts on “TOP 5 COLD CHAIN DRIVERS FOR 2020”

The Cold Chain transportation experts at QProducts & Services present the Top 5 Cold Chain Drivers for 2020.

 

 

 

 

Enter 2020 armed with knowledge that can help you strategically plan your cold chain operations. From cannabis disruption to wild weather, there are many things going on socially, logistically, and environmentally to be aware of. These insights are from speakers at the annual Cold Chain Council, and our internal experts at QProducts & Services.

 

Check Out the Top 5 Cold Chain Drivers for 2020 Below:

 

 

 

QProducts & Services extends their gratitude to the many industry experts that spoke at the June Cold Chain Council for the Food & Beverage Industries. Together, they educated attendees on how to best leverage these drivers in anticipation of 2020.

 

QProducts & Services is a manufacturer of passive temperature protection and cargo security solutions for the global supply chain. For over 25 years, they have developed innovative, cost-saving solutions for transporting temperature sensitive commodities. QProducts & Services has expanded their product line to include cargo security solutions and wireless temperature monitoring technologies. Manufactured just outside of Chicago, IL, their patented products are noted for durability, performance and reliability in protecting the integrity of shippers’ cargo throughout the supply chain.

CargoQuilt® protects from both heat and cold, as well as other environmental hazards.

CargoQuilt® Wraps Up Additional Savings For Shippers

August 28th, 2017 Posted by Food & Beverage, Over the Road, Temperature Protection 0 thoughts on “CargoQuilt® Wraps Up Additional Savings For Shippers”

 

 

 

As published in Food Logistics Magazine: http://www.foodlogistics.com/article/11598291/cargoquilt-wraps-up-additional-savings-for-shippers

ARTICLE AUG 27, 2014

Kevin Lynch, National Account Manager at Q Products & Services’ (QPS), a manufacturer of insulated blankets, confirms that capacity issues in the trucking sector, particularly for OTRrefrigerated, are extremely tight.

“Our customers and prospects both are telling us when it comes to capacity for OTR refrigerated, it’s just not there,” he says. To make matters worse, most OTR refrigerated carriers do not have immediate plans to invest in new equipment to add capacity either, says Lynch.

QPS manufactures passive temperature protection products, including the Multi-Trip CargoQuilt, the flagship product in their quilt fleet, which covers an entire or partial load of freight enclosed in a trailer or container, for either domestic or international shipments. The CargoQuilt protects against freezing, heat and condensation damage.

While it is a relatively simple product, its ability to save money for shippers who covert their OTR refrigerated shipments to intermodal dry shipments is impressive. Furthermore, it gives shippers added flexibility by allowing them to use temperature-controlled equipment only when they really need it.

“It’s a win-win for shippers, because not only is there capacity on intermodal, but it’s a more cost effective compared to OTR,” says Lynch. Once shippers begin using the insulated blankets and understand how well they perform, they start looking elsewhere in their supply chain for opportunities to use insulated blankets, Lynch adds.

Logistics Podcast

Podcast: Staying Relevant, Staying Innovative in the Food/Bev Supply Chain

June 6th, 2017 Posted by Food & Beverage, Temperature Protection 0 thoughts on “Podcast: Staying Relevant, Staying Innovative in the Food/Bev Supply Chain”

 

 

 

Our Director of Sales for our Food and Beverage market, Kevin Lynch, joined the panel of this webinar by Food Logistics on staying relevant in the supply chain. Listen Here!

“How do companies stay relevant and innovative in today’s supply chain? Kevin Lynch, director of food and beverage at Q Products & Services, talks about those issues and how strategic partnerships and collaboration play a critical role in staying on the leading edge, which ultimately supports customers’ initiatives and business goals.”

Power In-Lock® is a patented, electronic internal locking system to prevent cargo theft

Cargo Theft is a Critical Issue to Food and Beverage Industry

December 16th, 2016 Posted by Food & Beverage, Technology 0 thoughts on “Cargo Theft is a Critical Issue to Food and Beverage Industry”

 

 

 

As published in Food Logistics Magazine: http://www.foodlogistics.com/article/12281779/cargo-theft-is-a-critical-issue-to-food-and-beverage-industry

BY KAREN E. THUERMER ON DEC 16, 2016

Cargo theft is not limited to high-value commodities such as electronics. According to CargoNet, food and beverage was the most stolen commodity in the United States last year.

Meanwhile, FreightWatch International (FWI), a subsidiary of Sensitech Inc, estimates the average value of stolen food and drink shipments between 3Q 2014 – 2Q 2016 was $86,149 with seafood being the highest valued sub-category at nearly $200,000. The most targeted sub-category was meats at slightly below $100,000. FWI reports that food and drink shipments remain the most stolen commodity domestically with 23 percent of thefts from June – August 2016. Of those thefts, 77 percent were FTL (full truck loads) and 15 percent FPU (fictitious pickups).

The future of cargo theft in the food and beverage sector is unclear since time of year, economy, and accessibility all factor into what cargo criminals look for as a target. Nevertheless, the FWI Supply Chain Intelligence Center continues to observe and report on any particular product, or commodity that starts to become a trending target in cargo theft incidents across the United States. FWI indicates that the food and beverage supply chain is particularly vulnerable because 99.99 percent of companies in the industry do not institute a layered security program in their transportation and logistics operations.

“Aside from the nut growers in California, little has been done to combat the problem,” FWI says.

In order to protect themselves from cargo theft, companies must pay high insurance premiums. According to TT Club, a top insurance provider, theft is the number three reason for a claim. By outfitting trailers with tracking devices that make it possible to detect cargo theft and recover stolen assets, companies reduce premiums.

“Cargo theft is a customer service failure as it undermines a carrier’s ability to meet service expectations,” remarks Lina Paerez, product marketing manager, ORBCOMM. “Cargo theft can permanently damage a company’s reputation. When a shipper loses a load due to theft, it disrupts the distribution cycles. If carriers can’t provide a safe work environment for their drivers, it can lead to poor driver retention.”

Real Time Monitoring

FWI maintains that assisted-GPS covert tracking technology embedded in cargo is the preeminent force multiplier with respect to combating in-transit cargo theft. Electronic Freight Security (EFS) programs offer a solution as they provide real-time, end-to-end monitoring of cargo shipments through embedded track­ing technology. EFS also allows a shipper to maintain full visibility of the cargo for the duration of the shipment.

“As a complete virtual escort, this low-cost solution removes the vulnerabilities associated with human-based escorts, while significantly increasing the chances of recovery in the unfortunate event of a theft,” FWI states.

Proper EFS programs include pre-determined routes with immediate escalation protocols to ensure maximum compliance and security of the driver and cargo. Compliance to security protocols is critical. Immediate response and resolution to non-compliance incidents reduces opportunities for theft.

FWI got its start developing EFS technology to enable monitoring, reporting and recovery of high-value shipments in transit between manufacturing warehouses and delivery sites for cargo security. Its technology delivers real-time location, status and condition data as well as critical activity alerts that harden the supply chain and mitigate the risk of cargo theft.         “Aluminum containers and cargo holds represent some of the most challenging environments for GPS devices,” FWI officials state. “FWI manufactured devices optimize leading location-based services and machine-to-machine (M2M) technology that works in impaired settings where other GPS devices do not.”

The latest FWI Single-Use GEO Tracker is at the forefront in tracking technology. This tracker takes the complexity out of cargo tracking by offering convenience and simplicity—eliminating the organization and management of tracking equipment.

Telematics devices can track the location and status of transport assets for complete fleet visibility. “Operators receive alerts when a problem is detected: a trailer makes an unplanned stop, deviates from its route or leaves a geofence,” Paerez explains. “This enables dispatch to react to problems quickly. When cargo is stolen, tracking devices make it possible to track the trailer for quick recovery.”

Trailer tracking devices are becoming smaller and more inconspicuous, which makes them harder for thieves to spot and identify. Such systems now support mobile applications, which allow operators and drivers to monitor status and manage alerts from anywhere.

“Devices are also becoming increasingly sophisticated. They are quicker and easier to install and they require almost no maintenance or battery changes—solar powered devices can report for anywhere from 5 to 10 years with no intervention and little sun exposure,” Paerez adds.

Trailer Breach

Trailer breach (unauthorized door opening) or load tampering is another problem. A trailer tracking solution that incorporates cargo and door sensors and delivers notifications/reports when a trailer is loaded or unloaded and when a door opens or closes can help carriers to detect theft early.

“A comprehensive system can also include cargo sensing technology that reports on load status—vibration, light, temperature, humidity, shock, etc.—which makes it possible for carriers to detect cargo tampering as it occurs,” Paerez says.

“A common way to identify a valuable target is when external devices are securing the doors,” states Scott Borsodi, director of business development, at Q Products and Services (QPS), creator of the Power In-Lock cargo security system. This system locks the trailer from inside, making it out of sight and out of reach of thieves or anyone attempting to gain unauthorized access.

“Our doors are locked electronically from our Jackson, Miss. headquarters as soon as the trailer is loaded,” explains Chris Wood, spokesman for KLLM Transport Services.

The locking mechanism is centrally controlled from KLLM’s corporate dispatch through telematics. Once the lock is activated, the door cannot be opened until the trailer reaches its destination. Drivers only have the capability to unlock the trailer through the use of a one-time code entered on a keypad attached to the trailer. This keypad communicates with the internal lock through radio frequency and is only utilized in the event the satellite signal is disrupted.  The corporate dispatcher must provide the one time code to the driver. This prevents any type of collusion between the driver and an outside source from gaining access to the product within the trailer. The doors have sensors that document opening and closings and also indicate whether the trailer was locked or unlocked.

“Even in the event the external padlock and the shipper seal have been breached, we can demonstrate the trailer doors were never opened and satisfy the shipper’s and receiver’s quality control team that the product has remained safe during transit thereby avoiding a claim,” Wood remarks.

Q Products’ Borsodi stresses that Power In-Lock buys time in deterring theft. “Most thieves will give up if they can’t access the cargo within a minute or two,” he says. “By mounting a security solution on the inside of a container or trailer door, the thief doesn’t know what’s preventing the doors from opening. The internal feature is what makes our solution so unique.”

The importance of being able to prove a shipment was not tampered with cannot be understated. “A tampered shipment can be far more detrimental to a business than a few pallets getting stolen,” Borsodi states “Companies who intend to sustain a reputable brand simply can’t afford to take the risk of partnering with a carrier that is unable to help them comply with regulations,” states Borsodi.

Imminent regulations, specifically the Food Safety Modernization Act (FSMA), are probably the largest contributors forcing change, as shippers must be more diligent in selecting their transportation providers. As a result many shippers are taking a zero tolerance position as it relates to a trailer breach. Shippers are presenting transportation agreements to carriers that basically allow the shipper to claim the carrier for the entire shipment rather than being required to inspect the product and prove damages. Coinciding, transportation providers are employing reliable cargo security solutions when investing in new equipment and modern communication tools.

“Quite frankly, they have to if they want to haul their customer’s freight,” Borsodi says. “A common perception with regard to regulations is that they present challenges and increase operating costs. In reality, and speaking on behalf of some of our customers, when the proper technology is utilized it can exploit the weak links in the supply chain. As a result, they have realized cost savings by reducing shrink, cargo theft and minimizing supply chain disruptions.”

Karen E. Thuermer is an Alexandria, Virginia-based journalist who has been writing about logistics for several decades.

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