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The Future of the Food Supply Chain & Logistics

The future of the food supply chain is unclear as it is in a state of constant change. This is not unusual for supply chain operations as there are many factors driving change. Due to the already global nature of the food supply chain the implications and impact of this change is far reaching. Some of the top factors impacting the food supply chain include: governmental regulation changes, growing customer demand, increasing globalization and rising infrastructure investment. This is leading to a variety of creative solutions that are allowing for the fast and efficient evolution of the industry as a whole. One of the most popular advancements for the industry is the use of IoT and telematics to bring fresher, local produce to consumers. This focus on technology utilization has helped these businesses to adapt existing distribution networks to accommodate more localized delivery. This technology will also help to track produce from the source through to the consumer as customers demand to know more about where and how their food was produced. These solutions include WMS, RFID, ERP, manufacturing execution systems ADC devices, temperature recorders and much more. The food supply chain will also begin to utilize rail transport more frequently than ever before. This is thanks to significant infrastructure upgrades such as those completed on the Florida East Coast Railway. Localized delivery will also change and shift towards 3rd party courier services such as UberFresh and UberEATS. These private couriers will focus on D2C delivery in large, densely populated areas like NYC and Boston. Other services such as Blue Apron and Hello Fresh will offer similar D2C delivery and other creative click-to-collect options. With globalization increasing the import and export of food will continue to rise. In order to maintain food inventory integrity many ocean carriers are implementing advanced refrigeration technologies that are more reliable and that release less environment-damaging emissions. All of these improvements will address the factors forcing the evolution of the food supply chain. To learn more about these solutions and more like them contact Datex experts today at marketing@datexcorp.com or 800.933.2839 ext 243.

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The Future of the Food Supply Chain & Logistics

  2. 2. What is Driving Food Supply Chain Changes? • A variety of factors are shaping the evolution of the food supply chain. While all interconnected within a single industry, the implications and impact are wide reaching. • Food supply chain operators are planning long-term changes to adapt to: – Increasing governmental legislation – Growing customer demand – Supply chain globalization – Rising infrastructure investment
  3. 3. Use of Telematics and IoT • Food will be fresher and more local – Kimbal Musk, brother of Elon Musk, was quoted in an article in stating that 45% of Americans are now seeking organic food in their diet and are more conscious as to local food sourcing. – This will impact supply chain operations as they must adapt their existing distribution networks to accommodate more localized delivery. – Food SCMs will place a stronger focus on technology utilization to track and manage these networks.
  4. 4. Use of Telematics and IoT • Consumers will know more about food – As customers demand more information about where their food comes from, GMOs and how it was grown or raised, food supply chain operators must comply in order to remain competitive. – These operations will use a variety of technology solutions including RFID, WMS, ERP, manufacturing execution systems, automated data collection technologies, temperature recorders and more to compile and store a detailed audit trail down to the ingredient level. – This information will also be used to comply with evolving food legislation from regulatory bodies such as the FDA.
  5. 5. Rebounding Rail Transport • In an effort to regain market share in the food logistics sector many localities are investing in and completing comprehensive rail network and infrastructure upgrades. • This will help rail transport operations to capture more intermodal business transporting consumers goods, fresh & frozen goods, and beverages. • One example of rebounding rail transport is the Florida East Coast Railway which has upgraded all 351 miles of rail to make transporting fresh fish items up and down the coast. https://issuu.com/supplydemandchainfoodlogistics/docs/flog1215 - Pg 18
  6. 6. 3rd Party/Private Courier Delivery • Referred to as the “B2B Sharing Economy” by , this trend brings smaller 3rd party delivery services into the mix. • Private courier services such as UberFRESH and UberEATS will deliver groceries and restaurant orders directly to consumers’ doors. While this is often more expensive for consumers because it eliminates the economy of scale, it does provide an added level of convenience which can be highly desirable for busy consumers. • These services are frequently being implemented in large, densely populated cities such as New York and Boston.
  7. 7. Rising Imports and Exports • Supply chain globalization is increasing across the board due to the development of more favorable trade agreements. This is leading to significant investment in reefer infrastructure by major ocean carriers. • In order to maintain the integrity of food inventory ,ocean carriers are also planning to invest in new and improved refrigeration technologies such as non-ozone depleting CO2 instead of the existing synthetics. These will regulate temperature more reliably while also reducing emissions.
  8. 8. Rising D2C Delivery & Online Shopping • The growing popularity of organics has changed the way that consumers eat and it will lead to many also changing the way they shop. • Services such as Blue Apron and Hello Fresh are changing the nature of the food supply chain as they deliver directly to consumer homes without ever stepping foot in a grocery store. • In order to keep pace many grocers will begin to offer D2C delivery and a variety of click-and-collect options. This will require further development of existing distribution networks.
  9. 9. Conclusion • Lara L. Sowinski, editor-in-chief of Food Logistics Magazine wrote “The global food supply chain is arguably one of the most vibrant industries operating today… There is not one aspect of the global food supply chain that is untouched by transformations taking place in agriculture, weather and climate change, regulatory compliance, labor, consumer preferences, sustainability, technology and retailing.” • All of these factors are significantly impacting the way that the food supply chain operates and will continue to do so in the years to come as technology, consumers and regulations evolve.
  10. 10. Learn more about technology designed to improve food supply chain and logistics operations. Talk to a Datex expert about your technology needs: 800.933.2839