Commodity Forwarders Inc. (CFI), one of the two top perishables forwarders in the US, has moved to boost its presence in the seafood arena. The California-based forwarder is acquiring Peninsula, a forwarding outfit from Boston that specializes in seafood logistics.

Perishables have emerged as a key focal point in the growth strategies of many forwarders, including the likes of Kuehne + Nagel and Panalpina, which traditionally concentrated on hard freight. Kuehne + Nagel signed a strategic partnership agreement with CFI last year to augment its standing in the perishables segment.

“The perishables sector is attractive for multinationals. We see more large organizations look to bring more perishables into their mix,” says CFI president Chris Connell.

Likewise, airlines have been going aggressively after perishables, one forwarder noted. Yields are not as high as in moving pharmaceuticals, but they are better than for general cargo, he added.

Fruit and vegetables, alongside flowers, make up the bulk of this traffic moving by air, but yields are markedly juicier when it comes to fresh fish, seafood and high-quality foodstuffs, said Daniel Johnson, manager of global products at IAG Cargo, adding that the airline has seen massive demand from Chinese consumers for premium seafood from Europe, such as crabs, razor clams and other crustaceans.

These commodities also look set to show rapid growth in the coming years, and Asia is emerging as a major arena for this development. Moving fresh food to the increasingly internationally stocked dinner tables and refrigerators of Asia’s rising middle classes offers rich pickings to logistics firms. Not only does the sector promise strong growth, but food retailers have barely scratched the surface of supply chain optimization, according to a recent study published by DHL.

The study, based on a survey of over 300 food retail professionals in India, Indonesia, Vietnam and Thailand, shows strong optimism for further expansion.

“Rapid increases in purchasing power, coupled with surges in demand driven by population growth, will yield obvious expansionary benefits to food retailers,” said Dean Eichorn, vice president – retail, DHL Supply Chain Asia Pacific. “

One-quarter of retailers surveyed expect growth in excess of 10% this year, and more than 50% anticipate growth north of the 6% mark.

While this looks appetizing to logistics providers in its own right, they can sense further opportunity for growth for themselves in the relatively low level of supply chain sophistication indicated by the survey. It shows that 38% of those interviewed were unaware of their logistics costs and more than one-third did not track supply chain performance.

“A large number of food retailers don’t have visibility of their logistics operations, let alone the resources or subject expertise to improve and optimize them,” Eichorn said.

This state of affairs is not likely to prevail for long. Increasingly, shippers show interest in end-to-end visibility. For one thing, they are looking for an uninterrupted record of a shipment’s transit and the ambient conditions at every step of the way, and they want their logistics providers to be able to take corrective action as soon as a deviation from determined conditions is detected.

“We integrate refrigeration unit data with the customer’s fleet management system, said Gayatri Abbott, director of telematics and intelligent monitoring solutions of Thermo King, a Minneapolis-based maker of transport temperature control products. The company offers a web-based temperature and asset monitoring system that utilizes GPS and cellular communications. It deploys a range of sensors, such as temperature probes and door and fuel monitoring devices in combination with real-time tracking. Every deviation in ambient conditions automatically triggers an alert.

In part, the heightened focus on end-to-end shipment data stems from shippers’ desire to minimize spoilage and extend shelf life. Another powerful driver is on the regulatory side. Authorities keep raising the bar to ensure product integrity and to document the state of a shipment throughout the supply chain. This has been reinforced in North America by a string of high-profile incidents that have raised consumer awareness of the potential hazards. Last summer food distributor Sysco Corporation agreed to pay US$19.4 million in penalties for having stored seafood and raw meat in sheds without refrigeration.

Alongside better tracking, logistics operators like CFI are looking to deploy improved packaging solutions. The industry has had some success with Tyvek covers, which were developed by DuPont for pharmaceuticals shipments. They shield cargo from temperature excursions, condensation, harmful gases and vapours as well as rain, wind and insects. The material’s surface forms a reflective barrier against solar gain, while the metallized inner surface helps maintain the temperature inside.

As far as Connell is concerned, this is just the start. He thinks that the industry has to look to use new materials to develop packaging solutions that are geared to the characteristics of individual types of produce.

“We need to be ‘commodity-specific,’” he said.

By Ian Putzger

Air Freight Correspondent | Toronto