Spain is one of the biggest fresh food producers in the world: leaders in the export of meat - especially pork - products, a European benchmark in the marketing of fruit and vegetables, the world’s largest wine producer ... Spain is increasingly an exporting country, and one that requires efficient logistics systems capable of supporting the growing world demand for food.
Apart from this, domestic consumption of fresh products also has a direct impact on the logistics property sector. Temperature-controlled warehouses in Spain are insufficient in number as well as obsolete, so demand exceeds supply of cold storage logistics facilities.
According to data for the first quarter of 2020 from the Spanish Cold Storage, Logistics and Distribution Association (ALDEFE), the average capacity utilisation rate of cold storage in Spain held steady at 78%, with a turnover of €29,088,908 and 1,283,326 metric tons of goods handled. These data reflect the continuing growth of the cold logistics industry, making the continuous commitment to innovation essential.
Objective: controlled temperature transport
Ensuring food safety is undoubtedly the main objective of logistics systems. Ensuring that food is always kept at its optimum temperature is possible only through cold chain systems. Thus, logistics operators must have multidisciplinary knowledge enabling them to maintain the stability and shelf life of each product, complying with its legal health specifications and keeping the taste, colour, aroma and texture of the food intact.
In addition, the streamlining of operations, in warehouses, transport and points of sale, and promoting training and awareness-raising of all the people making up the chain are other important objectives pursued by the logistics sector.
To provide a little more insight, we go on to explain the trends characterising the present and the future of one of the sectors with the greatest growth prospects in the world: cold logistics.
Cold as an energy-efficient asset
Refrigeration applications are responsible for between 15% and 20% of world energy consumption, according to data from the European Union’s Cool-Save project. In Spain, due to its geographical location and the higher incidence of the food industry in the economy, this percentage is higher. In this regard, the need to have controlled atmospheres and to maintain the cold chain end-to-end leads companies to make significant investments in industrial vehicles, points of sale, warehouses, etc.
Disruptive in-warehouse technologies include compact storage systems, self-supporting racking and the use of insulating materials, as well as isothermal packaging to help maintain food temperature. Likewise, as indicated by the Spanish Association for Refrigeration Technology (AEFYT), work is also being done to replace obsolete compression equipment with machines with high energy-saving capabilities thanks to their modulating systems that respond to changes in demand (multi-stage, modulating speed, condensation and/or evaporation temperature, etc.); in the implementation of new control, regulation and monitoring systems; and in new refrigerant fluids. Furthermore, the incorporation of artificial intelligence to the field of refrigeration is expected to optimise regulation systems.
Intelligent process control throughout the supply chain: data management
Omnichannel and ever shorter delivery times mean that product control is necessary at all times. For this reason, the use of RFID technology and sensors for collecting data and transmitting it to their corresponding software applications is increasingly common since they facilitate the management of large volumes of information. In fact, the industry's investment in cloud computing and Big Data is expected to reach US$40 billion in 2020.
Better data management favours smarter operations, optimising the configuration of routes - which improve shipments, deliveries and collections -, facilitating the supervision of temperature conditions at all times, improving the ability to respond to unforeseen events and transforming fleets to adapt them to distribution in urban areas.
Thanks to the Internet of Things, artificial intelligence and predictive analytics, it is possible to make forecasts based on combinations of data (geographical location, city holidays, weather, schedules, etc.) that help improve logistics planning.
Logistics 4.0: the power of automation
The development of automation and robotisation of refrigeration facilities, both distribution and storage, offers more safety for workers, an improvement in production standards, the optimisation of labour costs and, of course, greater energy efficiency.
Thus, in a manual storage facility, human errors can easily occur, so ensuring traceability and keeping the cold chain intact is much more difficult. In an automated space, on the other hand, it is easier to control all processes - especially thanks to alert systems -, implement high-density storage solutions that manage space more effectively and, consequently, increase production capacity, management and control.
Outsourcing to improve resources
More and more manufacturers and production companies are opting to outsource their logistics processes in order to intensify the control of the activities that depend on their own internal management. This allows them to approach the agility and flexibility demanded by today's market, as well as reduce the expense of managing their own fleet.
Consequently, logistics providers are providing innovative and creative solutions that promote their added value, providing higher quality services by having specialised material, technological and human resources that know the sector both nationally and internationally.
Training of professionals
Logistics professionals are the key element in ensuring the smooth running of the supply chain. Although technological resources are important, they are useless without human resources. Cold logistics needs employees who know the processes and their details well, who are acutely aware of and sensitive to the issues involved and who have specific digital skills. For example, professionals familiar with Lean Manufacturing, with business models based on e-commerce, with Industry 4.0 or with Agile Project Management. Therefore, raising awareness through the training of each person forming part of the supply chain is not just necessary, it is essential.
The challenge of sustainability
Logistics and transport operations are responsible for 25% of CO2 emissions in Spain, according to data from the European Environment Agency. Transport networks and their impact on sustainability represent possibly the biggest challenge in the logistics sector. Achieving a decent profit margin for providers while committing to 'green' technologies may seem like an arduous task, but innovation is allowing greater efficiency in both time to market and transport, among many other areas.
Intermodality and alternative propulsion systems to diesel such as LNG (liquefied natural gas) or the use of hybrid or electric vehicles are presented as one of the solutions to reduce pollution levels, especially in large urban areas, but they represent a significant investment for companies. If these companies received aid or incentives, they could renew their fleet and definitively commit to 'green logistics' for the benefit of all.
Thus, although today's market faces many challenges for sustainable logistics, it provides increasing benefits and, above all, a competitive advantage. If the consumer is already committing to sustainable food, so will their production and distribution systems.
Last mile: the customer at the centre
At the moment, the logistics sector cannot offer a B2C service (to the consumer) with the same structure as B2B (business to business). The term 'last mile' refers to the last logistics segment, that is, home delivery, or delivery to the pick-up point for the final consumer. This section is the most expensive in economic terms, so the challenge is to reduce the cost of delivery and the negative impact on the environment, while keeping the cold chain intact.
Some specialised last-mile companies are developing technologies to improve their cold logistics. One example of this is the start-up Revoolt, which is currently developing, internally, temperature sensors that will be introduced on its vehicles from September to avoid breaking the cold chain during delivery. Another example is Primafrío, which has signed a collaboration agreement with Intelligent Delivery to create a new transport logistics model with technologically advanced solutions such as intelligent distribution cabinets.
Thus, last mile solutions depend on the redesigning of distribution networks towards urban warehouses, pick-up points, city boxes, vehicles with a smart key ... And, above all, the use of Big Data and new technologies to create more efficient predictive distribution models and increase the reliability of deliveries.