Perishables White Paper. Is it just a question of time?

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1 Perishables White Paper Is it just a question of time? April 2014

2 Index Executive Summary 3 Introduction 4 Refrigeration - Storage - Transit 5 Flowers 6 Fruit 8 Country-Specific Regulations 9 The Supply Chain 10 Summary 12 Appendix 1 Glossary of Terms 14 Appendix 2 About DSV 17 April 2014

3 Executive Summary Fresh produce isn t fresh when it has been sitting on the quayside for 12 hours, stuck in a motorway traffic jam for 10 miles or left in a warehouse overnight. Waste is also one of the byproducts of poor logistics; the greater the delay in getting from field or sea to shelf, the less likely the product is to be classified or retailed as a premium product. When it comes to talking about perishables it not only encompasses seafoods, fresh fish, vegetables and flowers but also certain chemicals, resins, pharmaceuticals and blood plasma. By their very nature many of these products cannot be frozen. Chilled and fresh products pose their own issues in terms of handling and transportation and it is here that the correct choice of logistics provider is vital. This white paper looks at what you need to be aware of when selecting a logistics provider and outlines the reasons for care and diligence at source and also throughout the supply chain. Ensuring your perishables arrive on time is not just a matter of a timetable and transport. There are regulations to consider, interlocking schedules and the mode of transport you use. Make the wrong choices and your fresh fish will be as old as the waters they were swimming in, your flowers will be wilted and dropping petals and your peaches or tomatoes will be blushing and bruised. 3

4 Introduction This white paper aims to guide, advise and illustrate the options available to those looking to import and export perishables to and from the United Kingdom. Sometimes it is the little things that make the difference between success and failure and the more information the greater the chance the product will arrive at destination as a welcome addition to the retail market. Market forces can affect not only the supply and demand but also the methods of transportation. You may already be transporting your fresh fish, vegetables and flowers by road or even rail across the UK or Europe. Using seafreight has some advantages in terms of costs and yet the benefits are often outweighed by the slow progress across the seas. Technology has created a whole new retail market for frozen and fresh fish. What was once considered exotic and unobtainable unless you were on holiday in foreign parts is now is available in UK stores within hours of being caught in warmer waters across the globe. Flowers from the Netherlands and other parts of mainland Europe arrive by road on ferries and via the Channel Tunnel. Vegetables often make the same journeys by road, although there is some appreciation of timing when it comes to more exotic fruits and vegetables from wider afield. If you are trying to match your brand promises and maintain your market share then why compromise on the methods of transportation for your premier products? 4

5 Refrigeration - Storage - Transit Those working with vegetables, fruit, fresh fish and seafood products understand the need for correct storage and transit times. In a world where we are offered frozen seafood it is all too easy to believe that transit times and conditions are the same for chilled and frozen products. For those actively involved in the shipping of fresh fish and vegetables, the real issues centre on the customers, the logistics supply chain and the handling. In 2002 it was estimated that 300 million tonnes of produce was lost annually through non-use of refrigeration, mainly in developing countries (IIR and UNEP, 2002). Seafood and fish, are arguably one of the most difficult of the fresh produce categories to transport and consequently time is of the essence. Most refrigerated, chilled and fresh produce, stored and transported at temperatures between -1.5 C and +14 C dependent on produce type, frequently will have a high quality storage life measured in weeks rather than months. This is where the selection of your logistics provider is vital in ensuring the right method of transport. The relatively slow pace of marine transport frequently requires much closer control of temperature than is achieved in road, rail or air transport if goods are to be carried successfully. 5

6 Flowers Flowers come from the vast Netherlands growers but Kenya is one of the world s leading flower exporters with an estimated 38 percent market share in Europe. (International Business Times, April 2014) Kenya s horticulture industry, which generates about $1 billion a year and employs more than 30,000 people directly, contributes about 1.6 percent to the country s gross domestic product (Kenyan Flower Council) and in the run-up to Valentine s Day nearly 800 million flowers were sent to Europe. (The Guardian) With global flower sales reaching nearly $14 billion in 2012 (Bob Sechler, Wall Street Journal) there have been changes in the logistics market now more blooms are moving by sea from South America and Africa instead of moving by air. In Europe it remains very much a road operation but nevertheless, what does not change is the method of preparation and handling. Transporting flowers by container ship takes significant cooperation among growers, shippers and wholesalers so blooms are chilled to near freezing shortly after harvest, putting them in a kind of suspended animation, and then maintained at the temperature in refrigerated shipping containers for a sea transit that can take up to two weeks. 6

7 Flowers sent by cargo plane undergo a one- to two-day transit. They are cooled after harvest, but not to near-freezing, and they can experience temperature changes inside air-cargo holds or during loading. The global flower sector has proved relatively resilient, averaging a growth rate of about 2% to 3% over the last decade despite flat sales during the worst of the economic downturn, according to FloraHolland. In selecting your logistics provider, your location and destinations will be paramount in that decision. Airfreight has been a big beneficiary of the globalisation of the cut-flower sector, as fertile soils, warm climates and low labor costs turned countries such as Colombia and Ecuador in South America, and Kenya and Ethiopia in Africa, into major flower producers. In Europe nearly a third of sales were imported in 2012, compared with well under 10% two decades ago. (FloraHolland)

8 Fruit Many types of chilled and fresh produce have lower temperature limits below which they are damaged. Clearly, for items carried near their freezing points, lower temperatures will give freezing damage, and this is as true for chilled meats as for other more obvious products. For many fruits, there are temperatures well above their freezing points at which low temperature physiological injuries occur. This is where the right choice of a knowledgeable logistics provider can help minimise losses. Recent data on storage life and temperatures show that produce such as oranges and apples are readily transportable by sea, whereas a very short life produce such as watercress could not survive more than a very short sea journey. Many subtropical fruits have lives comparable to the length of time needed to transport them by sea from growing areas to major markets, so special attention to quality of both produce and handling is essential for successful sales. Cross contamination It is also important to remember that fresh produce can be affected by cross contamination. The most obvious is the transfer of taint or odours from one cargo to another and the other is the transfer of ethylene from produce with high ethylene production rates to ethylene sensitive goods, leading to premature ripening. Carriers usually have clear instructions to prevent inappropriate mixing of cargoes, but care may be necessary. Talk to your logistics provider if you have any concerns they are the experts. 8

9 Country-Specific Regulations It is important to note that for some cargoes, temperatures are prescribed by the country receiving the goods. Quick-frozen foodstuffs for Europe must be carried at -18 C or below from point of production. Fresh fruits under plant quarantine regimes must meet tightly laid down temperature and time limitations. Some countries may not accept frozen goods which have been off refrigeration for more than a specified time, regardless of temperatures achieved and that can result in wasted time, effort and ultimately the fruit. In all these cases, failure to meet requirements is a total commercial failure unless the goods can be diverted to a different destination where they will be acceptable. In developing countries, there will often be a lack of suitable equipment to provide a proper cold chain. This is a need which leads to the loss of a large quantity of foodstuffs. The import of any foodstuffs can be delayed by procedural and regulatory matters but it should be noted that this lack of proper facilities does not extend to the UK. Virtually all UK airports have excellent facilities for keeping perishable goods within the optimum temperature range: between four and five degrees centigrade, and many new ones are being built increasingly closer to airports to ensure that the goods can be taken from the aircraft to the customer faster than ever. 9

10 The supply chain Depending on what perishables you handle, there are distinct choices between sea, road and airfreight. Choice is often a matter of speed, cost and more importantly the type of perishables you handle. From sea to shelf and into the supermarkets and shops as fast as possible is the aim of every retailer. In 2012 the UK retailer Budgens reported it was guaranteeing fresh fish into stores less than 36 hours after being caught in the sea. This was a development initiative to differentiate Budgens from the competition and its 36-hour promise demonstrated Budgens commitment to real food for today s communities in providing the freshest fish to market. In their own words Having been caught in small fishing boats in Cornish waters in the early hours of Thursday morning, the fish is bought from the local fishermen at Looe Market at 6.30am, then packaged and en route to be sold Friday morning. With fresh fish the main logistics issues are in ensuring the expected journey times are consistent with product life and minimising time off refrigeration. Problems are most likely to occur at export terminals and transit points, both for sea freight and air freight. In terms of road transport, traffic congestion and customs delays also need to be factored in. Proper planning and operating systems overcome these difficulties to some extent, but there is always some degree of uncertainty and it is more than wise to accept that some margin for delays should be built in to the planning process. For the cold chain, it is always a journey which has to be achieved, not just a destination. 10

11 Vegetables and fresh fruits pose many of the same problems as seafood and flowers care has to be paid to temperature, handling and the way they are transported. As with wine, temperature shock is always a risk unless precautions are taken. Refrigerated containers and prepackaging using ice and sometimes cold gas can extend shelf life, but the reality with many perishables is that presentation is also important to the end user. Talking to your logistics provider is vital for both ends of the supply chain. Fresh vegetables can often take more sturdy handling than fresh fruit and the choice of transport will certainly be affected the characteristics of the product. Excessive vibrations and gases can also be a concern and this is where the expert knowledge of your logistics provider comes into play. There is little point in paying for a premium air service for some fresh vegetables if the costs outweigh the income, no matter how quickly they reach market. The same is also true in reverse with roadfreight you have to have the network in place to ensure your perishables make the markets on time and within budget.

12 Summary What matters to you is the method of transportation, the schedules and the efficiency of the supply chain. Timing is one of the crucial factors when handling refrigerated produce as it deteriorates with time at a rate dependent on the temperature of storage. For most frozen goods at normal storage temperatures of -18 C or below, maximum times for high quality storage are appreciably longer than transport times, so there are no special difficulties. These are the things to consider: Where are your source locations What types of perishables and what you want to transport them as fresh, chilled or frozen What are the issues likely to affect transit and delivery times Alternative modes of transportation Does your logistics provider have alternative /contingency routes/transport The final stages from UK arrival/departure to consumer delivery Importers and exporters need to ensure that the destination airports they are shipping to have similar facilities and only work with air cargo carriers that can provide a consistent end-to-end cool chain for your perishable produce. It is important these facilities are available in the exporter s entire target market to ensure that their produce reaches shops in a consistent condition, regardless of where they have been shipped to. 12

13 At best, refrigerated transport can maintain quality, it cannot improve it. Poor quality produce cannot justify the costs of transportation. The reefer has become a common temperature-controlled transport unit used to insure load integrity since it can accommodate a wide range of temperature settings and accordingly a wide range of temperature sensitive products. Also, it is a versatile unit able to carry around 25 tons of refrigerated cargo and is fully compatible with the global intermodal transport system, which implies a high level of accessibility to markets around the world. About 2.02 million TEUs of reefers were being used by 2011, which represents about 5% of the global ISO container capacity. This is just one solution, but there are also options for the transportation of flowers in chilled lorries and smaller self-contained chilled units for fruits and certain delicate vegetables. The way to success has been well summarised by Hartley (2005) as follows: Know your products and routes Educate your team on modes of transport Select the best mode using risk analysis Use the best provider you can find Use quality control to manage both planned and unplanned changes. Food transportation is an industry that has fully adapted to the cold chain and can, despite the problems with air transport, be considered the most resilient, particularly since a large majority of food products have a better tolerance to temporary variations of transport temperatures. The use of refrigerated containers has particularly helped, since they account for more than 50% of all the refrigerated cargo currently transported across the globe. The bottom line is that unless you talk to the experts you could be working to get your perishables transported half way across the world in an expensive, loss leading and unproductive way.

14 Appendices Appendix 1 - Glossary of Terms Absolute Humidity Actual weight of water vapour in a parcel of air and is expressed in grams per cubic metre. The greater the air temperature the more water vapour that it can absorb before becoming saturated Anti - Chamber This is a chamber or facility, which ensures that cool-room conditions exist in the transfer area when cargo is loaded from storage into the container. Air-bagging Bags filled with air are used in containers that are not full of cargo to fill large gaps to prevent cargo movement without restricting airflow. Broken Stowage Unfilled spaces throughout the container. Controlled Atmosphere The gas mixture surrounding the cargo is controlled so that its composition is as desired 14

15 Controlled Atmosphere The gas mixture surrounding the cargo is controlled so that its composition is as desired Dew Point Temperature Temperature at which the air has to be cooled for the water vapour to condense out into water droplets. It is also known as the saturation temperature, and is dependent on the absolute humidity Chock Block or wedge used to prevent movement of cargo within the container Dunnage Timber utilised to provide space within the stow of cargo to permit ventilation. Hydro-cooling A process in which the produce is rapidly cooled after harvesting by spraying, drenching or immersion with cold water Kazoo The nozzle on the container drain plug. Modified Atmosphere Gases are removed or added to create an atmospheric composition, which is different from that of air around the commodity. Partlow Chart This is a clock-based analogue temperature recording circular chart. It traces and records the delivery or return air temperature within the container Relative Humidity Ratio between the amount of water vapour in the air and the amount it can contain at that temperature. It is usually expressed as a percentage. Senescence Ageing of the commodity cold water 15

16 Set Point Temperature setting on the controller of the refrigeration unit Shrink Wrapping Application of a protective synthetic plastic wrapping material to unitise slip sheeted and/or palletised loads, improving handling and protecting the goods from shifting during transit Slip Sheets A thin corrugated fibreboard or plastic sheets used in place of a pallet to maximise space utilisation. Slip sheeting requires special forklift attachments. Stowage Factor Volume occupied by unit weight of cargo. Usually expressed as cubic metres per tonne, it does not take into account any space, which may be lost due to broken stowage Sweat or Condensation Is formed when the water vapour in the air condenses out into water droplets when the air is cooled below the dewpoint. The water droplets may be deposited onto the container structure or onto the cargo and packages. Vacuum-cooling This is a post harvest/pre-shipment process, which relies on the cooling effect of water evaporation on or within the product to reduce temperature. It requires a vacuum chamber to lower the boiling point of the moisture in the product Ventilate To allow fresh air to circulate throughout the cargo in the container 16

17 Appendix 2 - DSV Divisions DSV Road With around 10,000 employees, DSV Road is one of the three leading logistics providers in Europe. More than 17,000 trucks are ready to carry your goods in a fast, efficient, flexible and environmentally friendly manner all over Europe. DSV Air & Sea DSV Air & Sea offers alternative routings and flexible schedules to suit even the most demanding logistical requirements to and from all parts of the world. Our approx. 6,000 employees handle more than 700,000 TEUs of sea freight and 250,000 tons of air freight every year. DSV Solutions DSV Solutions partners up with its customers to design and deliver logistics solutions and we add value by increasing operational and cost efficiency. We employ over 5,000 people and operate more than 130 warehouses comprising a total of 2,200,000 m2. DSV UK In the UK, DSV operates from 29 locations and manages additional activities in-house at various premises. Whether you are looking to move a small urgent package or an entire plant, require storage or a two man home delivery service, our 1,500+ employees provide the local knowledge and expertise to ensure your requirements are met on time, every time. 17