Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
Alex von Stempel, Cool Logistics Resources
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
Food e-commerce at a critical junction
Key food sectorsOpportunities for
airfreight Challenges for the
logistics sector
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
Fruit and vegetables Fresh seafood and meat Flowers Pharmaceuticals Medical supplies Chocolate/wine Processed foods
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.comNote: World map based on the official UN published maps. Source: Seabury
MEC
ASIA
+2% / +5%
+3% / +8%
+4% / +4%
+7% / +6%
+3% / +2%
+3% / +4%
+6% / +9%
+3% / +1%
+7% / +11%
+10% / +0%
+1% / +5%
Global future perishables growth 2017-2021: Air Freight: ~3% per
year Ocean Freight: ~4%
per year
EUROPE
NORTH AMERICA
SOUTH AMERICA
AUSTRALIA
Perishables Logistics continues to grow...
AFRICA
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
0
20
40
60
80
100
120
140
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Mill tons
Source: Drewry’s reefer market forecasts
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.comSOURCE: SEABURY
South…New…
MexicoBrazilThaila…
EthiopiaNethe…Ecua…IndiaPeruChileAustr…
KenyaNorway
Colo…USA
Flowers
Asparagus
Pepper
Onions
OthervegetablesBerries &cherriesTropicalfruitsFish &seafoodMeat
213'956 7%210'614 7%210'358 7%205'999 7%194'320 6%193'204 6%140'064 5%125'743 4%111'090 4%104'587 3%88'683 3%73'002 2%72'726 2%57'666 2%56'347 2%37'877 1%
ExportsTonnage2016
Market share
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
• China became the largest global market in 2017, overtaking the United States, growing 28.0% (Source: Transport Intelligence, UK)
• China’s National Statistics Bureau: online retail sales of physical goods of food, clothing and other commodities went up by 28.6%, 20.3% and 30.8% respectively.
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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• 17% growth in cross border between 2017 and 2022, compared with overall e-commerce (cross-border and domestic together)
• Cross-border could comprise 20% of all e-commerce purchases by 2022, representing US 627bn
Opportunities forairfreight
• China the driver 70% growth year on year , value in 2015 estimated at 40bn USD = 6% of China’s total e-commerce spending
• South East Asia set to grow to an estimated 200 bn USD by 2025
Source: Transport intelligence
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
Food e-commerce
• Alibaba = pure platform
• J.D.com/ Amazon –platform and selling own stock
Others: VipShop, Dangdang, Jumei
What goes round comes round ...
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
Shipper
Collect Cargo & Deliver to Airport
Prepare Cargo
Load Aircraft Offload
Prepare Cargo Transfer Delivery
Handling PartnerForwarder Handling Partner Forwarder
Consignee
Origin On load Airport Offload Airport DestinationTrucking Trucking
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
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Quality control
Qual.kontrolleQuality control
Quality control
Quality control
Farm Packhhouse
Cold store
vessel seaport unloading
container depotSuper market tconsumer
Inland depot
loading
Seaport
coldstoreColdstore
Coldstore
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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Service level Kpi’s• Actual vs Planned First Event
(PDR - Planned Date of Receipt)• Actual Vs Planned Delivery
(PDD - Planned Date of Delivery)• Latest Acceptance Time – LAT
(Dependent Product Definition)• Time of Availability – TOA
(Dependent Product Definition)• Flown as Planned
(Dependent Product Definition)
• Source: Cargo IQ
Tracking and control needed• Correctly Received By Carrier
FOH / RCS• Departure on Flight – DEP• Received Transit Airport – RCT• Received Final Airport - RCF• Ready At Destination Airport
NFD/TOA• Out For Delivery – OFD• Proof Of Delivery - POD
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
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Direct buying• Multi-channel retailing• Rise of the E-tailers• Merger between on-line and off-
line and food service• 1. Driver: Technology• The ‘savvy’ consumer• 2. Driver: Quality/Health
Sustainability• Low price + convenience
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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* Retail sector: off-line low single digit growth vs on-line: double digit growth
• Growth potential for logistics sector: the fact that a large proportion of traditional retail still handles fulfilment in house.
• Home delivery costs, delivery failure and delivery fraud risks
• Savvy logistics operators will be able to ‘cream off’ business from both sides, unless companies such Amazon and J.D.com Alibaba get there first ...putting the big international on the back foot.
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
Walmart & JD.com• Integrated inventory
management• In-store and platform
integration• Fulfilment by nearest
warehouse
Source: Oliver Wyman
Jeff Bezos:
Customers are divinely discontent. Their expectations are never static. They go up. It’s human nature. We didn’t
ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a
better way, and yesterday’s , wow’ quickly becomes
today’s ‘ordinary’. at Fruit Logistica 2018
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
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• Shoppers habits change: convenience culture: smaller volumes and more frequent purchases: (Small is beautiful)
• 1. Challenge: Home delivery : the weakest link is the trucker and he is the one who interfaces directly with the customer. The more b2c the greater the challenge! In Europe the logistics sector is bedevilled by the shortage of truckers. The answer is because they are underpaid!
• 2. Challenge: The explosion of packaging and waste: designed to cover the ‘sins’ of the physical supply chain?
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
www.coollogisticsglobal.com
0
50
100
150
200
250
300
Food waste by region
Endverbraucher
von der Produktion biszum Handel
Source: B. Nitsche
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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Lower-middle- and upper-middle-income countries
• Formulations of mostly cheap industrial sources
• Key feature: long shelf-life
Source: Carlos Augusto Monteiro
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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War on plastic bags!
• (Iceland, Waitrose: Supermarkets in the UK)
• Pulp trays and paper bags
• Banning of unrecyclable blackplastic trays
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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Food for thought
• Looking at airfreight in isolation may be not the only way of approaching the subject. What if the KPI,'s for one sector were to be adopted to oceanfreight?
• Can this be done? Can logistics operators think other than in silos, with freight divided into road, rail, sea and air?
Perishable Logistics
Logistics is the art of helping transport make its assets sweat. Perishable logistics needs to reach into those areas where mere physical movement is critical but is only part of the answer.
Perishable logistics is a form of predictive analysis without the risk of being weighed down by assets. It's making use of risk. (Time over distance)
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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Cross-border challenges
• Critical factors in cross-border e-commerce:
• Payment security (fraud)• Duties and fees on orders• Protecting domestic sellers (tax
collection issues)• Cash payments encouraged by
certain countries ‘encourages returns’ (Mexico for example)
• City congestion (different environmental policies
What is needed?
• A clear returns policy• Stating all cost in shoppers’ native
currency • Speed of delivery + security over
transit time• On demand start-ups for final
delivery
Technology to take out risks out of the last mile!
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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How is it sold?
• pick a vehicle (motorcycle, van or truck)
• set delivery route• track order in real time • confirmation of delivery• Easy peasy???
Back to the future?
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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• Are emerging markets less demanding when it comes to the quality of delivery?
• Is click and collect the likeliest model for China, where ‘western food retail model penetration is not so developed?
• Last mile could become the differentiator between retailers (i.e. logistics)
• Who should pay for delivery: the (r)etaileror the customer?
Product level• Sensor technology simulating taste• ‘Vertical storage’, as a counterfoil to
‘vertical growing’ (urban farms) • Intelligent packaging
E-tail, logistics + physical infrastructure• Uberisation of delivery market? • Merging between traditional retail and
food service concepts and its effect on food-ecommerce platforms
• E-commerce collection + mini logistics centres located near or integrated into private dwellings even?
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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• Will drones replace reefer trucks one day and if so, where?
• Drone carriers/mobile infrastructure/drone ports?
• ‘Cool free’ transportation?
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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Service level dynamics in the fresh produce supply chain
• Faster• More flexible• More precise• More transparent
Old and new thinking!
• Ultrafresh (berries, salads)• ‘Category’ thinking = old hat• Speed retailing = new• End-to end view
Solution: Strategic partnerships and predictive analysis
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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Rising middle class consciousness Convenience + Environmental+ Health
Asia will remain the driver in terms of fresh produce demand and technological changes and logistics solutions
Impacting: 1. fresh consumer habits 2. fresh produce logistics solutions
Value market outpacing volume market
Airfreight should benefit overall
Cool strategies for core markets
10th Cool Logistics Global Conference & Exhibition
Hosted by Port of Antwerp
2-4 October 2018, Antwerp, Belgium
www.coollogisticsglobal.com
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