There’s never been a better time to be in the food logistics industry.
Business is booming, with new technology and changing customer trends beefing up popularity and demand.
Technology is already improving the way that the food logistics industry does business and this year is set to be filled with even more new innovations to increase efficiency, improve conditions for drivers and help make the farm-to-market chain more transparent and accountable.
New consumer food trends mean that stores are going to be looking for quality food distribution companies based on their ability to get more fresh produce into stores efficiently and safely to meet growing demand.
Here are some of the predictions and trends set to shake up food logistics this year.
Cold-chain distribution continues to grow
Although Trump’s new Presidency is rocking international trade relations, the driven storage and logistics industry in full swing and it looks like things are only going to get better, especially for those in the cold-chain business.
The food logistics industry is predicted to grow to a market worth of 271.30 billion USD by the year 2022, with dairy and frozen desserts tipped to be one of the largest segments this year.
This is all well and good, but it comes hand in hand with an increased focus on the quality of the fresh products.
This is going to push grocery stores to strive for better food logistics practices in order to meet customer expectations.
So who should we thank for the steady growth of our industry? International trade of perishable foods, customer food trends, and new technology.
Better conditions for drivers
Although the demand for food logistics is on the up, it may face new challenges thanks to a recent fall in the number of truck drivers.
The end of 2016 saw the sharpest decline in numbers, with the American Trucking Associations (ATA) reporting that they accounted for 70.1 percent of domestic freight tonnage in 2015.
America’s supply of drivers has been decreasing for three consecutive years and conditions will need to improve rapidly if recruitment rates are going to rise enough to meet the predicted industry growth.
This is all made more daunting by the new prospect of driverless trucks, which is already being eyed up by the likes of Amazon and Walmart. Companies like Otto are pushing the trend forward and, even though this may be several years in the making, it’s worth taking note of now.
The overall recommendation here? Pay will have to be increased and the desirability of driving jobs promoted in order to attract new employees to the ranks.
The ELD rule comes into play
Until recently, the average truck driver filled out an average of 240 RODS per year. That’s roughly 19 hours spent filling out manual log books. But this is all set to change.
The Federal Motor Carrier Safety Administration has declared that from December 2017 it will be mandatory for all trucks to be installed with an ELD.
Electronic logging devices will make it far easier to track all hours worked. The FMCSA have also suggested that they will prevent 1,844 crashes, 562 injuries and save 26 lives annually by helping to keep tired drivers off the road.
These devices aren’t just beneficial to the safety of drivers. The FMCSA are stating that they can save logistics businesses up to $705 per year in paperwork costs.
Installing ELD devices in roughly 500,000 U.S trucks is estimated to affect around 3 million drivers and will shake up a core aspect of the food logistics industry but should make things more cost-effective and far safer in the long run.
Demand for fresh food increases
Healthy living is now the fashion and that means demand for organic and fresh foods are increasing.
In fact, fresh foods have become so popular that 99% of shoppers are buying them. So powerful is this produce segment that grocery stores are said to be using it to stand out in their own overcrowded retail market.
It doesn’t stop there. Markets are also facing the new challenge of meeting customer demands for ready-to-eat foods that can be delivered to the home or ordered on mobile.
This means that local markets are having to change the way they order fresh foods and adapt their processes, even down to changing entire business models to become more efficient.
So what does that mean for food logistics?
Increased demand for fresh produce is going to contribute to the logistics industry boom in 2017 and will place harder demands on them in terms of waste reduction and higher sanitation standards.
Technology will help increase sanitation and improve waste management
If the demand for fresh food increases, the need for education around the safe transportation of fresh goods also needs to be improved.
The IoT is working on technology that collects and transmits data to improve the farm-to-plate supply chain, right down to the quality of the soil that the produce is grown in.
The Internet of Things (IoT) is already a huge part of our daily lives, with 6 billion devices already in use today, set to grow to a staggering 21 billion in the next three years.
IoT technology isn’t just a more effective way to help maintain optimum temperature or track produce, it will also help logistics companies remain cost-effective and efficient.
This is brilliant news for a marketplace that encourages businesses to continually look at how supply chains impact their success, for better or for worse.
With governments tightening the regulations on food safety and the production and supply of fresh produce, it’s up to food logistics companies to help grocery stores and markets innovate to meet standards.
So what does the future look like for food logistics companies? If demand continues to increase to meet these predictions, it looks like a year of healthy growth.
By using the new technological advancements available, we’ll be able to meet these new challenges and excel our customers’ expectations.