Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Log on to the U.S. Department of Agriculture's Food Safety and Inspection Service's Web site, and it's impossible to ignore the headlines: "Florida Firm Recalls Pork Sausage," or "Georgia Firm Recalls Chicken for Possible Contamination with Plastic" or "Virginia Firm Recalls Pork Products."
Go over to the Food and Drug Administration's site and there's more: One company recalls dried mangoes due to undeclared sulfites, another recalls its green tea and energy drinks that might be contaminated with a cough medicine ingredient. Another recalls cartons of soymilk that may contain dairy products.
A white paper prepared last year by Irista, a supply chain software and services provider, reports, "This year alone, there have been recalls of hot dogs contaminated with Listeria monocytogenes, dinner buns produced with eggs not listed as ingredients causing allergic reactions, pizzas made with milk not listed on the product's label, and most recently, another large recall of E. coli contaminated hamburger."
According to numbers compiled by RedPrairie, also a supply chain software producer, the FDA issued more than 400 food product recalls between January and August of last year. And the pace of food recalls is g rowing.
It's not that the food industry is becoming less safe: Food producers have made enormous investments in food safety. But in the aftermath of food contamination incidents in recent years, the government is paying more attention than ever to food safety. As a result, food distributors are under greater pressure than ever to keep track of where their products have been and where they are now.
And distributors have to know their shipment history in greater detail than ever. Tracking where the goods are and where they've been is important not only for complying with the law, but also for protecting the company and its brands.On those occasions when something does go wrong, the ability to act quickly, to know where all the affected goods are, and to know that they have been recovered depends in large part on complete information on every inbound and outbound shipment.
Crackdown on the food chain
Now the need to know is likely to become even more urgent.Under a new federal law aimed at combating terrorists' attempts to launch attacks through the food system, distributors will face stricter requirements for gathering and keeping accurate information on the where abouts of food products through out their supply chains. The law requires food manufacturers and distributors to have the information needed "to trace the source and the chain of distribution of food, its components and ingredients, and its packing ¸."
Over the course of this year, the Food and Drug Administration will be forging new rules to implement the new law, known as the Public Health Security and Bio terrorism Preparedness and Response Act. Specifically, the FDA will be required to issue regulations in the following four areas that affect food businesses:
Administrative detention. This provision expands the government's authority to detain food for up to 30 days if it has credible evidence that the food presents a threat of serious adverse health consequences
Registration of food and animal feed facilities. Every factory, warehouse, DC or other facility that makes, packs or holds food—domestic or foreign—has to register with the FDA by Dec. 12, whether or not the regulations are in place. Farms, restaurants and retail food establishments are exempt.
Record keeping. The law requires manufacturers, distributors and others to maintain records that would show the immediate previous sources and immediate subsequent recipients of food and food packaging. Nearly every entity in the food supply chain outside off arms and restaurants must comply.
Prior notice of imported food shipments. The law calls for food importers to give the FDA prior notice of all food shipments, including a description of the food,the manufacturer and shipper, the country of origin, the country from which it is shipped and the inbound port. The notice must be provided between eight hours and five days before the food reaches the U.S. port.
The FDA intended to publish proposed regulations by the end of last year and accept comment on the proposals for at least 60 days. Though it's too early to guess at the specifics of the final version, what is certain is the combination of the new law with stricter oversight of food shipments will place a greater onus on those involved in food distribution for accurate and reliable record keeping.
Technical challenge
Detailed record keeping across the supply chain will impose a serious burden on many companies—particularly those for which even internal communication poses a challenge. Scott Rishel, vice president of business development for Irista, says, "A lot of times the manufacturing world and the distribution world don't talk to each other. "An Irista white paper, Material Control in the Food & Beverage Industry, comments, "Technical silos only compound the problem. More often than not, companies do not have in place a comprehensive technical solution that spans both manufacturing and distribution."
The problem is only compounded as companies are forced to extend their systems to include their suppliers and carriers."We're seeing a need for much more sophisticated information systems in logistics," says Dwight Klappich, a senior program director at the IT research and consulting firm Meta Group. "Many organizations don't have the technical infrastructure to do that effectively," he says."This will force them to adopt new systems."
Basically, the problem is one of visibility. Rishel believes many companies in the food industry do not have systems that are well enough integrated to provide the supply chain visibility and control needed to meet the upcoming demands. "Visibility starts today at the distribution center," he says. "If we have more visibility in manufacturing, that can extend to distribution, and distribution can extend to the retailers."The problem, he says, is that although manufacturing may have the information that distribution needs, technology in place may make it difficult to share. "If it's in an old techn ology stack, it makes collaboration difficult," he says . "And mid-tier companies—I don't think they have the technology in place."
The challenge only intensifies once a shipment leaves the plant or DC. Although enterprise resource planning (ERP) systems have reasonably good lot-control tools for product under a company's immediate control, the emerging requirements will almost certainly demand more robust capabilities, Klappich says. Businesses will have to be able to trace by lot and sub-lot both forward and backward in the supply chain,he says. "You want to see if you can identify at what point something occurred."
That tracking process has become even more difficult as more food businesses outsource processes to co-packers, third-party logistics providers and others."It even extends out to the carrier," says Klappich. And that can be a problem. As Dan Gilmore, who heads up marketing for RedPrairie, points out, co-packers and other outsourced parts of the business can vary widely in sophistication,from small "mom-and-pop" co-packers to large contract manufacturers and downstream distributors.
Fortunately, the technology to overcome those barriers is available and evolving rapidly. "The technology exists to solve some of the problems here," says Gilmore. "A few companies have started to adopt it. Others may need a shove either because of the recall problem or because of increased regulatory scrutiny."
Getting serious The technology issues aside, some question whether food industry managers fully compreh end the challenge they face. Gilmore reports, "We see vast differences in the ability of companies to understand that the food and beverage industry has stringent requirements for managing inventory."
But comply they must. The information is needed to protect the company both legally and financially."You need the ability to make quality control and recall decisions from anywhere across the network," Gilmore says.
And while new government regulations may have pushed food businesses to pay greater attention to supply chain controls, there are good business reasons—such as brand protection—to look at such systems as well. As Gilmore puts it, "You've got to deal with a lot of inventory issues such as expiration dates and temperature attributes. In the food and beverage industry, it's an issue of real-time control. You've got to be able to take action on the information."
Without good tracking systems in place, however, companies risk overreaction. Gilmore says many companies actually recall more goods than necessary because they cannot track shipments by lot or sub-lot. "So they recall all of an SKU. Rather than recall a couple of million units, they recall 10 million."
Klappich offers another example of the perils of inadequate tracking: "Say you're shipping ground beef and a carrier running a reefer finds out the refrigeration unit is bad," he says. "You don't want to have to wipe out that entire line, just what was on that truck."
The good news is that the technology needed to enable cross-enterprise inventory visibility and management is becoming more accessible. Rishel says that while much of the food industry is not yet prep a red to meet the new requirements, "there's a lot of low-hanging fruit,"particularly for improving inventory information visibility between manufacturing and distribution within a company. Gilmore adds that newer technologies and protocols "clearly have the promise of making system-to-system conversion [of information] more readily available."Internet-based tools allow even small businesses to move information through hubs without major systems integration issues.
For the food industry, those developments are good news.They're also, to borrow an aging supply chain phrase, just in time.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.