Stakeholders throughout the supply chain understand 2023 is not like any other year – and this is especially true for the cold chain, both in terms of challenges and opportunities.
While a fluid cold chain is critical to feeding the world’s population, cold chain fluidity does not just happen; it relies on investment and innovation. Ocean carriers looking to optimize their refrigerated equipment investment need a strategic roadmap that addresses the ongoing economic and geopolitical challenges, food supply shortages, food waste, and refrigerated equipment capacity – all while working to reach sustainability goals.
Food waste mitigation
Nearly 40 percent of food produced in the world is lost, with seven to 15 percent spoiling during transport. Lost containers contribute to the problem. However, a more significant and preventable problem is related to container temperature or poorly packed containers. This is especially true for fruits and vegetables, which are vulnerable because they are loaded onto containers in corrugated boxes, which offer no protection from spoilage.
Food waste has been a persistent issue, and it will prove to be an even bigger problem in 2023 as experts predict food supply shortages will continue to get worse throughout the year. This elevates the need to take action to reduce food waste by investing in technology that will protect food during transport.
While today’s refrigerated equipment provides superior cold storage, arming reefer fleets with telematics technology allows for greater collaboration to increase transparency, and real-time data, which provides accurate information on the location of the container. Telematics also provide insight into the temperature, humidity, and air flow inside the container, which ensures the quality of the cargo is protected and waste is reduced.
As the world’s population continues to grow, so does the need to move food safely and swiftly throughout the world. The transport journey for this temperature-controlled food can be long, and there is the risk of contamination and damage every step of the way. This elevates the need for state-of-the-art refrigerated equipment that includes telematics to ensure the cargo is handled properly throughout the entire journey.
The reefer market is expected to grow on average five percent year over year through 2025, while breakbulk container demand will drop 15 percent. The movement of fruits and vegetables will be the key driver in the temperature-controlled cargo market as consumers expect off-season perishables to be readily available all year long.
With aggressive sustainability goals, the shipping industry is looking to make changes throughout the supply chain, and there are significant opportunities within the reefer sector.
Carbon dioxide (CO²) is used more as a refrigerant because of its zero depleting characteristics and its global warming potential. CO², as a natural refrigerant, is one of the most environmentally sustainable alternatives for refrigerated marine transport.
Other considerations for reducing greenhouse gas emissions include variable speed drives for compressors, and two-speed evaporator fans, which offer energy efficiency and can elevate even the most optimal operation linked to an energy-efficient fleet. Acting now to limit the damage from climate change is often smarter – and costs less in the long run – than acting later.
Technology and connecting end-to-end
Technological advancements, digitization and the digital transformation of businesses will be a growth driver not just for the reefer market, but for the entire supply chain.
“Smart” containers are equipped with telematics that provide real-time tracking and monitoring. This enables customers to plan their inventory and production accordingly, and lets operators reduce turn-time and improve equipment availability. These containers provide real-time visibility of location and contents.
Telematics also provide preventive measures using algorithms that recognize failures before they happen, notification of erratic driver behavior, potential theft, and safety issues.
The use of telematics in the maritime shipping industry is expected to explode in the coming years. According to data from Allied Market Research, telematics investment is expected to grow in maritime shipping by 21.3 percent by 2026. This shows the supply chain industry’s commitment to investing in technology to address critical cold chain issues.
Challenges and opportunities in 2023
The reefer market represents the most resilient sector within the shipping industry. Even during times of economic and geopolitical uncertainty, food must be transported in equipment that is up to the task. With the growing global population and potential food supply shortages, the industry has a responsibility to take all necessary steps to mitigate food waste – and technology is the key to delivering on that promise.
The pressure to reach very aggressive sustainability goals has the industry looking for a silver bullet. While that may not exist, the current carbon emission-reducing solutions connected to reefers present an opportunity to make a significant impact. The potential solutions on the horizon are very exciting.
Greg Tuthill is CCO at SeaCube Containers.