Dynamics of Perishable Logistics
From origin to destination fruits and vegetables need to keep its freshness and flowers must keep its beauty and fragrance intact. These perishable cargoes require an efficient supply chain management coupled with a comprehensive warehouse with a temperature controlled facility and an uninterrupted cold chain system throughout to keep its freshness.
What if the flowers from Kenya, lobsters from Boston, mangoes from India and strawberries from California reach their destination wilted and rotten? The shelf life of these products will critically dependent on how proper the cargo was handled during its journey. From farm to fork, fruits and vegetables undergo a long journey and hence require special care and treatment during the entire process. The perishable products deteriorate in short time and under extreme temperatures and humidity and must be handled with utmost care. The mode of transport, time, temperature, etc. plays a crucial role in maintaining the freshness of the commodity. During shipment and storage, the perishable products require a temperature-controlled environment.
The fruits, vegetables and flowers are ‘living tissues’ that are subject to continuous change after harvest. Post-harvest changes in fresh produce cannot be stopped but can be slowed down within certain limits. As some fruits and vegetables ripen, they release ethylene, a gas that can cause other produce to become spotted, soft, or mealy. To prevent this, ethylene-sensitive fruits and vegetables are kept separate from ethylene-producing fruits and vegetables, as a rule.
Perishable goods (such as fruits, flowers and vegetables) were among the first commodities carried by air. India’s diverse climatic condition results in the availability of different varieties of fresh fruits and vegetables. The country ranks second in fruits and vegetable production in the world, after China. The vast production base offers India tremendous opportunities for export. According to Agricultural and Processed Food Products Export Development Authority (APEDA), during 2015-16 India exported fruits and vegetables worth Rs 8,391.41 crore which comprised of fruits worth Rs 3,524.50 crore and vegetables worth Rs 4,866.91 crore. The major destinations for Indian fruits and vegetables are UAE, Bangladesh, Malaysia, Netherland, Sri Lanka, Nepal, UK, Saudi Arabia, Pakistan and Qatar. India is the largest producer of ginger and okra (lady’s finger) amongst vegetables and ranks second in production of potatoes, onions, cauliflowers, brinjal, cabbages, etc. Amongst fruits, the country ranks first in production of papayas (44.03 percent), mangoes (including mangosteens and guavas) (37.57 percent) and bananas (22.94 percent).
India is bestowed with several agro-climatic zones conducive for production of sensitive and delicate floriculture products. According to APEDA, India’s total export of floriculture was Rs 479.42 crores in 2015-16. The major importing countries were United States, Germany, United Kingdom, Netherlands and United Arab Emirates. More than 50 percent of the floriculture units are based in Karnataka, Andhra Pradesh and Tamil Nadu. With the technical collaborations from foreign companies, the Indian floriculture industry is poised to increase its share in world trade.
However, India’s cold chain is fragmented and unorganised. The organised players contribute only 8-10 percent of the cold chain industry market. The Indian cold chain industry is growing annually at 28 percent, and the total value of cold chain sector is expected to reach $13 billion by 2017 through increased investments, modernisation of existing facilities, and an establishment of new ventures via private and government partnerships. To reduce transaction and handling costs, a single window system to facilitate export of perishable agricultural produce has been introduced. India accounts for 11 percent of world’s total vegetable production, but India’s share in global vegetable trade is only 1.7 percent.
In the case of export of fruits and vegetables to European Union countries, according to Standard Operating Procedure by Ministry of Agriculture, Government of India, “The exporter shall be responsible for organising the phytosanitary inspection of vegetable and fruit consignment in the exclusive plant quarantine area at the approved pack house. The exporter or his authorised representative shall produce the consignment for phytosanitary inspection at approved pack house sufficiently before its departure. The maintenance of phytosanitary security of the certified consignment is critical for pest free export.”
Over the years, the major trends being observed in the industry are the shift of perishables trade growth from developed to developing countries due to income and population growth. In the days to come, supermarket chains will become bigger, facilitating the year-round supply of fresh produce, thus supporting international perishable trade, also by air.
Challenges In India wastage of perishable commodities at the warehousing stage is common due to inadequate infrastructure. Due to lack of adequate supply chain facility, 37 percent of Indian produce goes to waste annually. Perishable logistics involve the transportation of a large volume of temperature-sensitive cargo, thereby allowing cold stores to play an important role.
To meet the ever-increasing demands and handling requirements of temperature-sensitive cargo with modern cold storage infrastructure, Air India SATS Airport Services (AISATS) launched AISATS COOLPORT at the Kempegowda International Airport, Bengaluru in October last year. Since then, the facility has handled 15,830 metric tonnes of perishable cargo (export and import). Mike Chew, CEO, AISATS, informed, “Spread across over 11,400 square meters, the specialised cargo centre serves as a one-stop-shop which houses a complete range of facilities under one roof for seamless handling and storing of temperature-sensitive import and export cargo.”
Given the sensitive nature of the temperature controlled cargo, managing a refrigerated container is far more complex than a dry container. With regards to exports, a number of fresh fruits and vegetables are considered for the development of unit pack and bulk pack. The material used for bulk packages of these perishables need to withstand all kinds of hazards during transit. Most of the fruits and vegetables are transported by air. The packages are stored or transported as a pallet load. To maximise savings in distribution costs, pallet loads should be established as soon as possible in the distribution chain and remain unbroken as long as possible. In the case of sea transportation, the bulk pack of potatoes/onions are sent as containerised cargo either in refrigerated containers, ordinary general purpose containers with one door kept open for air circulation.
Paul J Kocheril, Deputy General Manager (Cargo), Cochin International Airport, stated, “The biggest challenge in perishable logistics is maintaining high-quality product and service levels. Proper packaging is essential to ensure that perishables survive the hand-offs and temperature variability involved in air import and export. This includes specialised boxes and packing materials, and use of gel packs, thermal blankets, dry ice, and other materials. One potential area for improvement is standardisation of box sizes. On passenger aircraft, goods must be packed to fit into unit load device’s (ULD).”
Cochin International Airport has a separate centre for handling perishable cargo. The Centre for Perishable Cargo can handle 24,000 metric tonnes per annum. The concept of the Centre for Perishable Cargo is aimed at maintaining the quality of the produce through the intervention of relevant technologies. It acts as a vital link for the maintenance of the cold chain during the export process of perishable cargo.
Tushar Jani, Group Chairman, Cargo Service Centre, said, “The challenges are comprehensive. In India production is a challenge followed by processing, storage, infrastructure, transportation, etc. Unless we don’t bring all stakeholder together and change the mindset things can’t work in a right direction. There is a need to create our market and concentrate on the demand generated by the huge domestic market. The government must focus on catering to the Indian market. There is a need to create an e-platform wherein the farmers can trade their produce. Once the local market is in place export will automatically follow.”
Role of Technology With an evolving technology, the logistics industry also need to change with the changing time to survive in the market. Ajit Venkataraman, MD, APM Terminals India, said, “Growing use of e-commerce channel is helping enhance ‘first-mile’ connectivity backed by localised players to support ‘last mile’ connectivity. The second generation of Internet of Things (IoT) has been able to provide integrated transportation and warehouse management solutions, which has enabled connecting vehicles, warehouses and other allied facilities under one network. This has helped in curbing wastage and damages to the cargo by providing data in real time. Unfortunately, there is a lack of ground-level understanding and awareness of the technicalities around the functioning.”
He further added, “With the advent and application of technologies in the cold chain sector, another trend that we see is upgradations of systems and processes. Companies are increasingly focusing on machine learning to convert existing data into business intelligence. Such acceptance and activations are giving them a competitive advantage, as this helps in demand forecasting, predicting trends and performance.”
Having the right kind of technical knowledge and expertise is a must while dealing with perishable cargo. Chew opined, “The industry is overcoming the lack of technical know-how by training the workforce to handle modern cold chain technology. The perishable logistics industry is exploring economically viable solutions to develop efficient cold supply chains to reduce wastage that occurs while moving cargo from production to consumption centres. This will allow technology to play a significant role in strengthening the infrastructure of the cold chain.”
The life of perishable cargo depends not just on temperature control but is a combination of controlling techniques and mechanisms. Citing a real-life example, Venkataraman recalled, “We realised the current dynamics when in an export-bound grapes consignment, the reefer failed to manage the required temperature for the cargo. We wouldn’t have realised this, had it not been for the advanced technologies like Remote Control Management (RCM), which help us track the reefer environment. When the RCM alarm was raised, our team of experts at port checked the same and concluded that the container would have to be changed. It was taken back to our container freight station in Mumbai, destuffed with the help from our technical team and re-stuffed in another container well in time for the next vessel. It was a seamless execution.
“The team, on an investigation, concluded that this was a case of hot stuffing. Hot stuffing is when appropriate temperature controlled cargo at normal room temperature is stuffed directly in a reefer set to a different ideal temperature. The correct way to do it is to precool it in a cold chain facility and then directly stuff into the reefer at the same required temperature. What many fail to understand is that the reefers are meant to maintain the desired temperature of the cargo and not bring down the cargo temperature. Awareness around this is growing now.”
Maintaining the right temperature Keeping the right temperature is paramount as it is the most important environmental factor that influences the deterioration rate of harvested commodities. Kocheril said, “Respiration increases by two to three folds with temperature. Therefore, it is highly imperative to select the appropriate temperature of different commodities for their effective preservation. The rate of water loss from fruits and vegetables depends upon the vapour, pressure deficit between the commodity and the surrounding ambient air, which is influenced by temperature and relative humidity. At a given temperature and rate of air movement, the rate of water loss from the commodity depends on the relative humidity. At a given relative humidity, water loss increases with the increase in temperature. Hence, for agriculture produce, the relative humidity is kept at 90 percent. Thus, the most important aspect is the selection of appropriate temperature and relative humidity conditions for the various products that are likely to be handled at the terminal.”
Echoing the same sentiments, Tarun Arora, Director, IG Group of Companies that imports fruits (50,000 tonnes annually) from 30 different countries, added, “In perishables, the cargo is breathing, it is important that the temperature is maintained throughout the supply chain. From port to a warehouse to supermarket till the time it reaches the end consumer. We ensure that there is no breakage of the supply chain as it is very important to maintain the entire cold chain system. In the case of a logistical breakdown during transportation, we have given clear instructions to our team not to open the door of reefer containers. The temperature takes a while to fall. Meanwhile, we arrange for a backup vehicle as we have our fleet of trucks and trailers, so it is not so difficult. The response time is less than six hours, and that’s how we address to logistical emergencies.” Managing the perishability of the product is on top of everything. Harvesting needs to happen at a right time of the day.
To handle the temperature sensitivity of perishables, Emirates SkyCargo has recently launched Emirates SkyFresh – a suite of solutions that help maintain the freshness of perishables and fresh consumables during transportation. Emirates SkyFresh features three levels – Emirates SkyFresh, Emirates SkyFresh Breathe and Emirates SkyFresh Active – offering varying levels of cool chain protection for different kinds of perishables.
Given the growth in India’s trade of temperature controlled products, APM Terminals Inland Service felt a real gap existed for a dedicated reefer services facility in India. This led to setting up of reefer services facility in Dighode, NhavaSheva. Venkataraman elaborated, “Our newly commissioned reefer services facility in Dighode is designed around customers’ needs and delivers end-to-end solutions including storage, repairs and maintenance, pre-trip inspection and malfunction resolution. A 24x7 reefer technical assistance desk makes it a one-stop shop for refrigerated container providers and users, helping us add value to the entire cold chain.”