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DVZ: Perishables Logistics Under Pressure While Sea Trade Is Rising

DVZ: Perishables Logistics Under Pressure While Sea Trade Is Rising

Consumers changing their eating habits and stores restructuring their supply chain are causing headaches to food logisticians, according to the German specialised newspaper DVZ, which published a thematic insert on perishables and cool chain logistics in its February 2nd edition. Changes in consuming habits and technical innovations will impact the industry this year, for good and for worse.

Costs have risen strongly in the German logistics sector, especially for perishables transporters. The guaranteed minimum wage, investments in training and safety and flexible time nibble at the already low margins. Quality concerns are growing however at consumer side, but on the logistics side the trend to buy minimum quality to the lowest possible price is still an issue, according to handlers and transporters. This low-cost demand supports discounted transport prices from international distributors.

Shopping habits change

German consumers now shop less but more frequently, which impacts the operation of retail stores - and ultimately hampers the supply chain on every level. “We see a growing volatility in the supply streams”, says Andreas Lenz, manager of DHL Food Services.  The market is less predictable and suppliers have to react even faster and be more flexible. This flexibility can be an additional cost-driving factor, warn experts.

While many customers are looking for cheap food but they still expect good quality and - this is a rather new trend – a larger choice in the fresh segment, according to experts cited in the DVZ. Limited store room but additional variety adds problems for distributors and suppliers alike. This trend leads to smaller deliveries that have to be done more often, according to supply chain managers.

The German retail market is rather specific in Europe, as discounters grew at a much faster pace than in other countries but cost awareness is rising in other countries too. Especially the UK, Belgium and The Nederlands are seeing a growth in the hard discount segment while classical retailers are under pressure.

Technical innovations for better sea freight

When it comes to cost efficiency, ocean freight is seen as a possible solution. Sea freight was already a highlighted topic at the IQPC Cool Chain Europe Conference in Europe and DVZ is also looking at this trend. The sector is currently looking at new ships and reefers which should enable more growth and flexibility over the next years.

Especially new niches in shipbuilding have been highlighted by the industry. Reefer ships had a hard time against large container lines and were seemingly bound to extinction. Now two new large Reefer ships with a capacity of 650,000 cubic feet have been ordered by Siem Shipping/Star Reefers for fruit transport while the company Seatrade ordered four ships of 300,000 cubic feet for fish transport.

  
The new MCI plant in Chile is expected to build 25,000 reefer container per year” - photo courtesy of "MCI"

Moreover, older ships are being refurbished to be more efficient and should be more flexible than large container shipping lines. These moves are being interpreted positively by the industry, hoping that the market situation is becoming better.

The trend to reefer containers is unabated. On the reefer container side, the availability has increased and production is rising while the specialised container sites grew by 8 percent to 2.06 million, according to the “Dynamar Reefer Analysis”. Additionally Maersk Container Industry (MCI) began the production of the first refrigerated containers and Star Cool refrigeration machines built in South America at its new facility in San Antonio, Chile. The plant is set to build 25,000 ISO standard 40 feet reefer containers per year.

The articles in German require subscription and can be found here http://www.dvz.de/de/themen/themenhefte/lebensmittellogistik.html