Real-time tracking systems have been a ‘game-changer’

On Load Shedding

Article from the Cold Link

By John Ackermann, Articles: Load shedding: A chilling disruption of the cold chain

08 September 2023

By Serena Ho, Director and Head of Consumer Business and Faheem Hoosen, Audit Partner and Head of Assurance

It is impossible to find a sector that is not affected by loadshedding. The energy crisis is having a major impact on the country's economy, but for the retail sector in particular, there is a chilling outlook if disruptions to the cold chain aren't addressed urgently says Serena Ho, director and Head of Consumer Business at BDO, and Faheem Hoosen, audit partner and head of assurance at BDO KwaZulu-Natal.

The retail cold chain and perishable market are vital components of South Africa's economy. It is estimated that the agricultural sector contributed around 10% to South Africa's total export earnings in FY2021 at a value of $12bn, with citrus, wine, table grapes, corn, apples, pears, and wool accounted for as some of the largest exports by value.

Compared to the rest of the continent, South Africa has by far the most modern, productive, and diverse agricultural economy with approximately 32,000 commercial farmers, of which 5,000 and 7,000 produce approximately 80% of agricultural output. This sector encompasses a vast array of goods, including fresh produce, dairy products, meat, and pharmaceuticals, among others.

These numbers should bode well for the economy, especially as the agriculture sector ramps up its post-Covid operations. But hopes for economic stability are growing dimmer as disruptions to the cold chain become increasingly commonplace and more and more retailers experiencing spoilage of produce,, causing food waste and massive financial losses.

Load shedding disrupts the cold chain

The smooth functioning of the cold chain is essential for ensuring the quality and safety of perishable products from farm to consumer. However, load shedding disrupts the cold chain's delicate balance, jeopardising the integrity of perishable goods. When refrigeration units are affected, transportation and distribution schedules face delays, impacting inventory management.

Retailers may struggle to maintain optimal stock levels, leading to stockouts or overstocking, both of which can result in financial losses and operational inefficiencies. Frequent power outages lead to temperature fluctuations in cold storage facilities, causing spoilage, loss of shelf life, and diminished product quality.

Retail cold chains also often involve multiple parties, including producers, distributors, and retailers. When a blackout occurs, the coordination among these stakeholders becomes increasingly complex. Each entity might have different energy backup plans or respond differently to power cuts, leading to coordination issues and potential breakdowns along the supply chain.

As a result, retailers are left grappling with significant financial losses, increased spend on diesel costs to run generators , while consumers face the risk of consuming compromised goods.

What's the solution?

So what can retailers do to ensure they are operating optimally, even when the lights go out?

To mitigate these risks, retailers affected by rolling blackouts may opt for alternative energy sources like generators to maintain cold chain operations during power cuts. However, these solutions are often costly to implement and maintain, driving up operating expenses for businesses. Smaller retailers, in particular, may find it challenging to bear these additional costs, putting them at a competitive disadvantage and or in some cases resulting in business closures.

Investment into smart monitoring systems and automation technologies can provide real-time data on temperature variations in cold storage facilities. These systems can trigger alerts when temperatures deviate from the optimal range, allowing businesses to take immediate action to prevent spoilage. But again, smaller operations may simply not have the capital required.

For smaller retailers who do not have the cash flow for investment into alternative energy sources, a strategy for beating the blackouts could be to diversify their supplier base. By doing this they could reduce their dependence on a single source of perishable goods which may help lessen the impact of supply chain disruptions in specific regions.

With a major retailer recently reporting in its latest financial results that its load shedding costs have skyrocketed over R500 million just to run generators (this does not include losses), it is plain to see that the retail sector is up against the ropes. The knock on effect of cold chain disruptions will be devastating for all stakeholders.

By implementing energy-efficient practices, investing in backup power solutions, and fostering collaborative relationships among stakeholders, retailers can minimise the impact of load shedding on the integrity of their cold chains, but what is the role that policy-makers are playing to safeguard the sector? There has to be a level of accountability from those who do have the power to level the playing field and improve sector resilience. The country needs real solutions that ensure nobody is left out in the cold.

Fresh produce leaders meet at PMA conference

Article from the Cold Link 

By John Ackermann

Keeping pace with technological developments and supply chain efficiency improvements are key for industry role players to grow their market share, both regionally and globally. This formed part of Dr Malcolm Dodd's message to delegates at the 2017 PMA conference.

The main conference hall was filled to capacity on opening day.

Over 400 delegates (many of them key decision-makers) met at the 2017 Produce Marketing Association's (PMA) Fresh Connections 2017 conference and exhibition held at the Cape Town International Convention Centre on 16 and 17 August.

On day one, PMA CEO Cathy Burns of the United States addressed the large assembly on trends around the world in the produce industry. On the second day, parallel sessions and workshops offered interaction among speakers and delegates.

Richard Owen, PMA vice-president of Business Development, and Lindie Stroebel, PMA general manager: southern Africa, both led discussion groups regarding the optimisation of the impact of a united global trade in fresh produce.

At a time when consumers' awareness of quality is on the increase and nations are uniting to reduce food wastage, Ulli Gerntholtz, NSF technical services manager: Africa, drew startling attention to food fraud. "Food fraud is committed when food is deliberately placed on the market for financial gain with the intention of deceiving the customer," said Gerntholtz. Statistics given by Gerntholtz demonstrated that the problem was widespread: across all foodstuffs, produce, fish, olive oil, liquor, and meat. The cost to organisations is estimated at R180bn per annum. The high cost of the 'horsegate scandal' in the UK, as well as South Africa's own mincemeat mislabelling investigation by Prof. Louw Hoffman, were quoted as examples.

ROUND TABLE WITH LANDBOU WEEKBLAD

James Lonsdale, national fresh produce manager at Spar, was in agreement about consumer demands for quality, consistency in supply, and accountability. "There is so much technology available to retailers to understand consumer trends. Tracking consumer behaviour has made us aware that having fresh lettuce available 24/7 at all our stores is a big drawcard."

In the same round-table discussion led by Johan van der Merwe of Landbou Weekblad, Louis de Kock of Wildeklawer Farming encouraged small-scale farmers to think laterally and make use of technological advancements. He also cautioned against investing in high technology if production is insufficient to fully utilise the equipment. Pooling the use of such equipment is often a viable option. De Kock was upbeat about the use of smart phones, which places small producers on par with large growers insofar as access to technology.

Benjie Meltzer of Aerobotics added to De Kock's views with his update on the powerful ability of computers to assist small-scale farmers. Satellite images of farmland and surveillance by drones could prove invaluable in locating land available for further farming activities.

In his focus on the economics behind agriculture, Wessel Lemmer, senior agriculture economist of Absa, emphasised the importance of traceability to avoid potential financial losses. The ecological impact and measures to minimise pollution of the environment also need to be factored into the financial planning and management of every farming entity.

LOGISTICS AND SUPPLY CHAIN

The workshop with a special focus on supply chain and logistics drew a large audience.

Andy Connell, A-bar-C Services director, was frank in his views on supply chain. To optimise returns, supply chains that connect producers to the retailer/consumer must keep pace with technological development and pursue sophistication.

Various tools in cold chain management are all available: digital devices that record temperature, humidity, shock, motion, power supply, and oxygen levels. Whatever is needed is available. Measured and stored data can be transmitted to wherever needed.

The same technology provides the importer or retailer with accurate and reliable traceability. If a problem is anticipated with a product condition, the importer/retailer can be forewarned and manage the sale to the benefit of all parties. To strengthen the fight against global warming, electronics software evaluates the carbon footprint of the supply chain from source to destination.

Connell is passionate about the exciting opportunities on the horizon: "Leave the flat-earth society and enter the round-world community — in other words, step beyond your comfort zone." He also alleviated fears about the impact of irradiation on food safety. At the energies (below 10kGy) used in irradiation, there are no toxicological, microbiological, or nutritional problems.

Dr Johan van Deventer, managing director of Freshmark, did not give any false impressions about the many challenges in the supply chain to trade fresh produce in the rest of Africa. With 20 years of experience and 223 stores in African countries (outside South Africa), Van Deventer was confident that Africa is the place to be. "It is different, risky, full of unexpected surprises, can be costly, needs a special approach, and is very exciting. It certainly is not meant for the fainthearted."

* Photos courtesy of PMA

Extraction from the Fleet Watch EMag Vol18 | 2014 Transporting perishables is now seriously expensive (by Max Brown)

“Supermarket cold supply chains are receiving greater management attention and input than previously for several important reasons,” says the highly respected Prof Malcolm Dodd, internationally recognised cold chain researcher and analyst.
“The South African Food Safety Act, Regulation R918, requires that the cold chain for chilled protein (meat, chicken and fish) is maintained below a temperature of 4.0 °C. For frozen protein, the temperature must be kept below – 18 °C. The implication is that supermarkets have to ensure that all their chilled Distribution Centres, cold transport, store chillers and display cabinets can
°manage temperature below 4.0° C. Freezers and frozen transport must all be operated below – 18 °C.”

Malcolm Dodd