Before long, nearly everyone in the food supply chain should have tools to trace products back to the point of origin. It's the law, and it's good for business.
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.
Over the summer, cantaloupes tainted by two strains of salmonella entered the food supply chain, killing at least three people and sickening more than 200 others before the scare was over.
The first illness was reported in early July, but it wasn't until late August that the Food and Drug Administration (FDA) announced a recall of the cantaloupes, which were grown by Owensville, Ind.-based Chamberlain Farms. Several weeks later, watermelons from the same farm were added to the recall.
That may have been the most serious food recall of the year, but it was hardly the only one. The FDA website has a long list of food recalls, most often for salmonella contamination.
The recalls, implemented by grocers, food manufacturers, food-service distributors, and others in the food chain, are the most public indicator of just how serious participants have become about the safety of their products. Spurred in part by outbreaks of foodborne disease, the industry is focusing greater attention than ever on food safety.
Public health is the chief concern, followed by potential liability and brand protection issues. Added to that are long-delayed rules that will implement the Food Safety Modernization Act (FSMA), signed into law in early 2011. The law requires all companies in food supply chains to be able to trace foods back to the point of origin. It is unclear when the rules, which are being crafted with significant industry input, will be published, but industry experts expect it will be in the not-too-distant future.
The term that's been coined for the effort is "farm-to-fork traceability." And major grocers and food-service distributors, to ensure their own ability to comply with the regulations, will likely insist their suppliers take part.
They're liable to get a mixed response to those requests. Big growers have already begun complying with the FSMA, says Bruce Stubbs, director of industry marketing for Intermec, which provides printers, mobile computers, and other tracing technologies to the food industry. But that's not always the case with their smaller brethren, he says.
"Some of the smaller growers are starting to investigate ways to become compliant and use technology [to] do that," Stubbs says. "But others are pushing back at what they look at as [a significant] expense."
That resistance could cost them business in the long run, Stubbs warns. "What retailers are telling me is that once the mandate is out, they will start pushing back on smaller growers, telling them that if they don't become compliant, they are not going to do business with them," he says.
THE FDA'S TO-DO LIST
What will the FDA require? Dan Vaché, vice president of supply chain management for the United Fresh Produce Association, which is part of a group developing standards and processes for the produce industry, says the FDA will require the use of electronic records, development of a common language that everyone can use, and the ability to quickly trace a product, usually within 24 to 48 hours of a request for that information.
The agency will also want to know who handled the product and how it was moved through the supply chain, according to Vaché.
In some ways, the industry is well ahead of regulators. GS1 US, a nonprofit organization that is working across the industry to develop bar-code standards for identifying and tracking products, is collaborating with every major food sector to develop approaches for tracking food through the entire supply chain.
Michelle Southall, an implementation manager for GS1 US, says the organization's standards will meet the requirement to know what happened to a food shipment—"where it was harvested, when it was shipped, where it was put away, when it was received."
But achieving end-to-end visibility and traceability is complex given the number of players in food supply chains and the number of interactions. Kevin Payne, senior director of marketing for Intelleflex, cites a real-life example of 40 small blackberry farms shipping to a single packinghouse that then ships fruit to three DCs.
"Think about all the possible combinations. How do you deal with all that? Then multiply that by the number of products and the number of distributors, and the complexity becomes mind-boggling," Payne says. Intelleflex offers battery-assisted passive RFID tags and on-demand data visibility solutions for tracking and monitoring the temperature of produce, dairy items, meats, and frozen and packaged foods.
Distribution centers are right in the middle of it all. Mike Lee, president and CEO of Airclic, a company that offers cloud-based software for tracking goods moving in food-service distributors' private fleets, says one of the challenges facing his food-service customers is their position as intermediary between producers and end customers.
"Taking the whole idea of farm-to-fork traceability, how are they making sure that goods are properly tracked all the way through? Having this ability [to track items] all the way to the restaurant or hospital or school is something they are taking very seriously," Lee says.
PRODUCE INDUSTRY COMING CLOSE
A prime example of the efforts to improve chainwide traceability comes from the produce industry and its Produce Traceability Initiative (PTI), an effort that pre-dates FSMA. Vaché says the initiative, which includes his organization and three others, got its formal start in 2008, but that its origins go back to the spinach crisis in 2006. That crisis, in which spinach contaminated with E. coli caused dozens of illnesses and several deaths, cost the industry between $40 million and $70 million that year.
The following year was even worse for spinach growers and processors. "People just stopped consuming spinach," Vaché says. Investigators finally determined the contaminated spinach came from a single field on a 40-acre farm in California and was processed in one facility for a number of brand owners.
The spinach recall was just one of many in that period. Vaché says the industry had about 900 recalls in 2007 and 2008. "The response proved difficult and costly," he says.
The produce industry acknowledged it had to do a better job with traceability. The problem, Vaché explains, was the amount of time needed to trace food back to its origin under the existing processes. "It took an inordinate amount of time," he says. That led to creation of the PTI, which involves growers, shippers, wholesalers, and grocers.
Vaché admits that implementation is not as far along as participants might like. According to GS1 US, the goal was to have supply chain-wide electronic traceability for every case of produce by the end of 2012. Though the industry is unlikely to meet that goal, officials say it is making progress.
Even those who may have initially resisted because of the cost of implementation are coming around, Payne says. "Things have been slow," he says, "but of late we're seeing more interest in the general concept of traceability."
UNEXPECTED BENEFITS
Those who adopt technology to comply with the regulations (or the demands of their channel partners) are discovering it has other benefits. Some food businesses, particularly smaller growers, worry about the cost of the implementation. But Vaché says that all of the participants are learning that implementing tracking systems not only meets anticipated regulations, but can also provide valuable data for managing the supply chain.
He cites as an example emerging technologies that allow fruit to be tracked back to the worker who picked and packed it. That may be very useful in a recall. But it can also be put to use, for example, in managing payroll by keeping track of just how much a worker picked and packed, he says.
Stubbs of Intermec says companies adopting technology solutions for traceability are also using the information they provide to improve efficiency and reduce costs. In a case study posted on its website, Intermec describes the experience of Lindsay, Calif.-based LoBue Citrus, which implemented an automated system with an Intermec printer to cut the time needed to trace back shipments. The orange grower also found that the system boosted its inventory accuracy to between 98 and 99 percent from the low 90s, and eliminated the need to conduct daily physical inventories.
Intermec, Stubbs says, has a product for small growers—a "solution in a box"—that includes all the software and hardware needed to provide the information he expects the final rules will require. He says "smart" Intermec printers can be loaded with software that eliminates the need for workers in the field to connect to a server, a PC, or a laptop. Workers can simply create and apply labels in the field and scan them.
"We have done that in an economical manner so even small growers can become compliant," he says.
What will compliance cost? No one knows for certain. It will require investments across the food supply chain, but many of those investments could also yield benefits in other ways.
Payne of Intelleflex says, "What we are trying to explain to growers, shippers, and packers is that if you combine traceability and temperature monitoring, you're going to reduce the amount of food wasted and you will generate more revenues. Ultimately, paying for the solution improves the top line, and you get traceability for free."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.