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Climate targets spark innovation to meet cooling demand

A major increase in cooling demand is colliding with the European Union’s ambitious climate and energy strategy which sets strict targets to achieve by 2030. Among them are the need to cut greenhouse gas emissions by at least 40% on 1990 levels and increase energy efficiency by at least 27%.

A major increase in cooling demand is colliding with the European Union’s ambitious climate and energy strategy which sets strict targets to achieve by 2030. Among them are the need to cut greenhouse gas emissions by at least 40% on 1990 levels and increase energy efficiency by at least 27%.

Moreover, the EU is entering a new phase in fluorinated gases (F-gases) regulation in which the availability of one group of them, hydrofluorocarbons (HFCs), will be cut 79% by 2030.

Current uses of HFCs include as a refrigerant in cooling systems, but they are known to act as a greenhouse gas, contributing to global warming. The overall package of EU measures will force the cold chain to focus on the issue of emissions and develop alternatives with less environmental impact.

When it comes to refrigerants, ammonia is one such alternative. “The use of ammonia (NH3) – a naturally occurring refrigerant with zero ozone depletion and global warming potential – offers a wide range of benefits. It is future proof as it will not be phased out by new legislation and offers higher efficiencies than HFCs,” said Aiden Perks, business development manager (South East UK) for Star Refrigeration.

The company has developed low charge ammonia packaged systems which require only a fraction of the refrigerant charge associated with traditional refrigeration systems. The systems are not only more efficient than HFC options, they also have a lower life cycle cost, pose zero risk to employees and the new units cost less than conventional ammonia installations.

Another innovation in the cold chain is the use of liquid air or liquid nitrogen. Dearman Engine Company – which is developing novel zero-emission technology to provide cooling and power – is working on an innovative novel piston engine powered by liquid air or liquid nitrogen. The only exhaust is cold air.

Liquid air or nitrogen is boiled to provide a high pressure gas that is used to fuel transportation vehicles. During the process, cooling is created which is harnessed to cool the load of the vehicle. The process of liquefaction is a very trusted one, said Dearman’s global ambassador Tim Fox. It is over 100 years old and present in every industrialised nation. Moreover, the distribution and storage technology and infrastructure are mature.

The use of the Dearman technology offers abundant benefits – zero-emission at the point of use, reduced noise, lower fuel costs and reduced CO2 emissions, to name but a few. On-road commercial trials will begin shortly.

So although it looks like a lot is hitting the cold chain sector – a huge increase in demand and many new regulations – there are also many innovative solutions helping propel the sector towards a bright future.

MW

Top image: European Commission: 2030 Energy Strategy

 

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Global Cold Chain Expo in Chicago a big success

The event attracted more than 165 exhibitors and 15,000 decision-makers from throughout the supply chain.

The Global Cold Chain Expo, held for the first time in Chicago last 20-22 June, was the one’stop shop for innovation, education and business-to-business networking for the global food industry cold chain.

Organised by the Global Cold Chain Alliance (GCCA), the event attracted more than 165 exhibitors and 15,000 key decision makers from retail, foodservice, processing, production, distribution, logistics and transportation. The attendees represented frozen, refrigerated, ambient and fresh operations, while the educational conference brought together innovators and experts with senior management and rising managers from all sectors of the industry.

As a partnership between GCCA and United Fresh, the GCCE was co-located with FMI Connect, the International Floriculture Expo, and the United Fresh Show. For the first time, the GCCE gave the perfect opportunity to spotlight the cold chain industry and its role as a critical component in feeding the world’s ever-growing population, all while maintaining food safety and quality between farmers and consumers.

Top 25 cold store operators handle 85% of the capacity

According to Corey Rosenbusch, GCCA president and CEO, the top 25 cold store operators represent about 85% of the storage capacity in the US, while another 300 operators take up the remaining 15%. Among the fastest’growing groups is Agro-Merchants, which has acquired 19 independent family businesses around the world over the last 3 years. Its total capacity comes to 219 million square feet.

Overall occupancy of cold stores around the world reached 83% in 2015, which is considered by GCCA to be quite high. Quizzed during the panel session of the conference about where the growing opportunities are, Rosenbusch considers the immense potential demand outside US such as China, despite local traditional facilities having a cost of just 30% of modern facilities. “80% of global growth in cold storage is outside the US,” said Rosenbusch. Indeed, 44% of US cold chain operators have operations outside the US and are slowly growing.

Panama Canal open since 26 June

According to a joint study by The Boston Consulting Group and CH Robinson, about 10%-15% of the traffic in produce shipments is due to move from the west coast to the east coast in the years up to 2020. West coast ports will still handle more traffic than they do today, but their market share will likely fall. A battleground representing 15% of GDP will be in play between the west coast and east coast ports, from New Orleans in the south to Chicago in the north.

Stable growth in the rest of the world

According to Manuel Cabrera-Kábana, GCCA board member and director of Friopuerto, the other continents are facing slow but stable growth in cold storage and transport activities. “Europe is mainly renovating its cold store facilities for more efficiency, due to high energy and labour costs,” Cabrera said.

Poland is a particular case where we shall see more consolidation, since there is over-capacity and high fragmentation among the operators. “In Africa, we see growth in more stable countries like Morocco and Senegal, while in Algeria a new financial programme is being applied to incentivize business.”

Cabrera confirms growth with Latin America, both on the east and west coast, since a lot of fruit and protein is coming from those countries. “Mexico is still investing in more capacity, but not exporting as much as they could,” says Cabrera. He concludes that a free trade agreement between Europe and the US would have a big impact on perishable trade, since milk, meat and poultry markets are still protected.

Asia’s big potential: the case of the Philippines

The Asia trade agreement in place within 26 countries will help to fuel growth in the Asian region. Anthony Dizon, president of CCAP and Kolstor Centre Philippines, confirms the tremendous potential in the Philippines, which has 8% annual growth in its cold store capacities. Ongoing projects come to 20,000 tons.

The population has a projection of 108 million by 2020, due to annual growth of 1.8%. The GDP has one of the highest growth rates in South East Asia: around 6%. Frozen items like beef have big growth potential, since its per capita consumption is just 5 kg, compared to 25 kg for chicken. Nonetheless, the complexity of operations limits automation and flexibility, when more than 7,000 different temperature-controlled items are distributed in the country.

PE

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Interview of the month: Global Cold Chain Alliance CEO Corey Rosenbusch

In this interview, Global Cold Chain Alliance president and CEO Corey Rosenbusch speaks about major trends for the temperature-controlled logistics industry and the inaugural Global Cold Chain Expo, taking place June 20-22 in Chicago.

The Global Cold Chain Alliance (GCCA) represents all major industries engaged in temperature-controlled logistics. Based in the US state of Virginia, it has offices or affiliates in Australia, Brazil, China, Europe, Guatemala, India, and the UK. The GCCA’s vision is to forge a universally strong cold chain where every product retains quality and safety through each link. Here GCCA president and CEO Corey Rosenbusch speaks about major trends for the industry and the inaugural Global Cold Chain Expo, taking place June 20-22 in Chicago.

What are the main issues the alliance is working on?

We recently did some research on our market and there were some very clear results that shaped our new strategic plan, with two priorities centred around growing the industry and leading the cold chain.

Where do you see potential for growth?

We see a huge opportunity to play a role in cost savings and assistance with compliance. If there’s one trend that you hear about all over world, it’s that regulations are becoming more and more burdensome for our member companies. If we as an industry can help deflect or assume some of that compliance role for produce companies, that’s a huge value-add.

Another opportunity is in facilitating trade. Overall, looking at opportunities where our industry can serve the food industry in places and ways we haven’t in the past is a major theme. In our study, 64% of our members said exports are a growing part of their business. Some are investing in strategic locations and port-centric hubs in order to be able to offer end-to-end supply chain networks.

What are some of the issues facing the industry?

It’s more and more of a challenge to recruit and retain talent and with the aging workforce we hear about this increasingly. We have to recreate an employer brand where we’re not simply asking someone to drive a forklift in a freezer but tell a story of helping protect the quality and safety of food so families can enjoy their meals and feel confident they are safe; or one of feeding the world, ensuring there is plenty of food to eat. That’s the kind of company a young person wants to build a career around. It’s about creating career paths, best practices and employer brands, and helping members recruit associates. They are having a very hard time finding labour, particularly in technical areas such as refrigeration – it’s harder and harder to find people to fill those roles.

Also with the pressure today to keep the cost of consumer goods at stable prices, food companies often look to our space to find opportunities for saving. We need to really protect ourselves against being commoditised. We’re not just big buildings where you can rent pallet storage space, there are value-added services that make us partners with the food industry in delivering produce to the consumer. It’s about telling that story and doing that is really new for us.

Where do you see unmet needs in terms of perishables?

A lot of the issues which drove the recent creation of a lot of new food safety regulations really centred around the fruit and vegetables industry. Fresh produce is far more challenging than a frozen product so I think what’s going to be critical to how that segment grows in future is the ability from a technical standpoint to comply with the regulations and ensure the safety of food, particularly as more moves from all over world.

We are also looking at how we can contribute to the lengthening of shelf life and reduction of waste in the fresh fruit and vegetable industry, for example loads that are rejected at retail because the quality of product is not there. Major retailers have become very stringent not just on the safety and quality of produce but even right down to appearance. We have a role to play there in helping the fresh fruit and vegetable industry ensure compliance with regulations and in controlling temperatures to ensure they can distribute as much produce as they can and it does not go to waste.

How much of the produce you handle is frozen?

Historically for the third party cold chain industry, frozen goods have been our core, with about 80% of the products going through our assets being frozen but fresh is definitely a growing area. These days one of the fastest growing services that a lot of members are doing for customers is tempering – basically defrosting food that is later sold and marketed as a fresh product. The biggest area of growth for this is bakery, particularly breads.

What’s happening in the area of food safety during shipping?

Food safety always been a core competency of ours and is one that is now in the spotlight with the rewriting of our food safety laws here in the US and some transformation of of food safety laws in Europe due to the horse meat issues a few years ago. Consumers have more and more focus on this so it’s a huge opportunity for us because our core concept is to ensure that food is kept at the right temperature. Perishables are a number one topic from a food safety standpoint. We invested millions in the mid-90s to really understand all of the food commodities, their shelf life and what is an optimal storage temperature, even developing software. Today we can take a product that might have been out of temperature range and predict the impact on its quality and shelf life.

Traceability is the key area where most of our transportation members are able to contribute to the overall protection of the safety of food. Constant temperature monitoring has become more advanced with real time monitoring of temperatures possible anywhere in world and data uploaded via satellite. More and more tracking and tracing devices are included in cargo to ensure it is kept within the proper temperature range. From that standpoint, our industry plays an important role.

What does the growth of e-retail imply for temperature-controlled logistics?

This was a big focus at our 19th European Cold Chain conference, held in Amsterdam in March. China, for example, is going to leapfrog the rest of the world in that more and more it’s not going to build brick and mortar stores but just go straight to home delivery. With JD.com, for instance, you can literally order just two bananas and they’ll deliver them to your home. At the conference we looked at how a shift in the supply chain from traditional brick and mortar to home delivery will redefine our business, for instance what kind of special vehicles will be required for delivery. We need to think about this and how to build our assets and capacity to serve accordingly.

There are also opportunities for companies in each-picking for frozen goods. A frozen item can be selected, put in a freezer box and left on your door stop in a frozen state and all this process is fully automated, with the product only touched when someone takes it out of the delivery truck.

What will be some of the highlights of the Global Cold Chain Expo in June?

It will where everyone finally comes together in one place to talk about the cold chain no matter the sector. The Global Cold Chain Expo is co-located with our partner, United Fresh Produce Association, and the Food Marketing Institute, so growers, distributors and buyers of produce will all be there. We’re bringing all the third party cold chain providers and a big group of processors who have not historically been there. Over 25,000 sq ft we’ll have all the components needed to really chart the future, to talk about efficient collaboration and solve problems – and that’s what really gets me excited.

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Don’t miss the new Global Cold Chain Expo

A one-stop-shop for all cold chain needs, the inaugural Global Cold Chain Expo takes place from June 20-22  in Chicago.

A one-stop-shop for all cold chain needs, the inaugural Global Cold Chain Expo takes place from June 20-22  in Chicago.

Created in partnership with the Global Cold Chain Alliance and the United Fresh Produce Association, this event boasts 25,000 square feet of trade show space featuring hundreds of exhibitors from every sector of the cold chain, including material handling, warehousing, construction, supply chain/logistics solutions and transportation providers.

Hosted at the McCormick Place Convention Center, Chicago, Illinois, the Global Cold Chain Expo will will put a focus on the all the products, services, technologies, companies, and employees that unite to ensure perishable products safely reach consumers around the world.  

Co-located with FMI Connect, the International Floriculture Expo, and United Fresh 2016, the Global Cold Chain Expo is expected to attract more than 15,000 key decision makers from retail, foodservice, processing, production, distribution, logistics, and transportation. Attendees will represent frozen, refrigerated, ambient and fresh operations.

“Increasingly, the fresh produce industry is being challenged to compete with locally grown, short haul fruits and vegetables that are picked closer to ripeness,” said Tom Stenzel, president & CEO of the United Fresh Produce Association.

“We believe the only way we can enhance quality control in our supply chain is a deep dive into the cold chain and technologies that bring our growers, packers and wholesalers closer to the consumer,” he said.

For industry suppliers, the Global Cold Chain Expo provides a competitive advantage by building brand awareness, expanding audience penetration to all global buyers of temperature-controlled transportation and facilities, and connecting suppliers to key decision makers. Their products and services will be on the world’s largest stage in the cold chain industry.

Early bird rates for the Global Cold Chain Expo are available through May 2, 2016. For more information visit: www.globalcoldchainexpo.org