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Intermodal logistics: food for thought

21 September 2018

For the majority of people that pop out of the office for a speedy lunch, or manage to sit down with their families for an evening meal,

the food that they consume rarely presents a supply chain conundrum.

Unless you work in logistics like me, the food on your plate is more likely to make you salivate than question the complex web of supply chains that brought it there. But food - and the agricultural process that makes it a reality - are heavily dependant on the logistics network.

 

Our globalised agricultural system provides cheaper food for all, while allowing countries with a significant agricultural economy to benefit from exports. Food has been no exception to the steady march of globalisation, with agricultural trade today worth more than $1.1 trillion. The global food system is highly complex and interconnected, with every nation across the globe dependent to an extent. Globally, production is concentrated in only a handful of countries exporting to many, some of which export it onwards.

 

The UN’s Food and Agricultural Organisation (FAO) has identified major trends in the way that consumers are shaping the agricultural supply chain. For example, per capita consumption of animal protein is plateauing in developed countries, although in developing countries, increases in incomes, population and urbanization – albeit occurring at different rates – are contributing to changes in lifestyle habits and dietary structure. More than 95 percent of consumption growth between now and 2024 will be in the developing world.

           

Food use is also changing. While cereals remain at the core of human nutrition, their contribution to industrial uses has been increasing and will continue to do so in the coming decades. Biofuels and other ethanol based uses account for 12% of global grain consumption, after significant expansion since the turn of the millennium, according the same UN report. Yet, the demand for animal feed is clearly the fastest growing area within agriculture which, given the changing global dynamics of consumption, is expected to continue into the future.

 

Agricultural supply chains are particularly perplexing as they have to consistently provide at several distinct stages: the input of supply (such as fertiliser and speeds), the production process, post-harvest, the storage of the product, the processing of the product and then, marketing and distribution to the desired markets. The many facets of this supply chain are likely to happen across borders, which throws a variety of customs regimes into the mix. Due to this complexity, the agricultural supply chain can create a hefty amount of risk for businesses and their logistics partners.

 

The fact that many foodstuffs are perishable presents an additional challenge for the supply chain, effectively creating a ‘race against time’. Refrigerated ships and containers are necessary, as is, of course, supply chain agility and transparency. The so called “cold chain”, which focuses mainly on fresh produce and pharmaceutical industries, requires additional maintenance of product specific environment parameters that include air quality and temperature, making it one of the most complicated supply chains to operate. Goods in the cold chain, unlike others, are always en route towards end use or destination. At DP World London Gateway’s logistics park, the ‘race against time’ lead to the creation of SH Pratt’s Halo, which offers state-of-the-art, multi-chambered storage that is capable of handling multi-temperature products, before distributing them to the UK consumer market.

 

 

Whether foodstuffs are perishable or not, speed and flexibility are still the dish of the day.  At the DP World facility in Tarragona, for example, we strip grain containers in the warehouses in order to store the product and integrate all customer and port admin processes until onwards delivery to the customer.

 

When looking at the agriculture and foods sectors, intermodal freight transportation looks very appetising for a variety of reasons. For instance, the flexibility allows for route changes and reduces highway use, creating more reliable delivery time notifications and leaner planning processes in an industry when speed and timing are essential. While onwards rail capabilities offers businesses the speed they need, there are also risks that have to be managed. Rail freight, for instance, can be susceptible to faults or signal failures and - due to the train cargo not being easily accessible in the advent of a fault -  many businesses prefer to rely on road. Any intermodal operator serious about shaking up the agricultural and food sectors needs to have a rail offering that is bolstered by a road fleet, giving logistics partners flexibility, speed and security.

 

All of these considerations were central to the conceptualisation and creation of DP World’s intermodal offering. By offering logistics partners intermodal connections as a means to avoid bottlenecks, firms can be sure that their goods will arrive on time and in perfect shape. At DP World Constanta, for example, we offer intermodal services to take containerised goods from the container-freight station (CFS) onwards via rail or truck into parts of central Europe, with first class feeder connections to the Ukraine, Russia, Bulgaria, Georgia and Moldova. This is what we are currently doing with alfalfa crops, containerising it via Constanta’s CFS and offering onwards freight transportation to key markets.

 

Within the complex and ever-changing food and agriculture sectors, intermodal logistics offers a range of benefits to ensure that quality of product remains consistent from farm to fork. With a growing number of mouths to feed globally and the impacts of climate change already being felt in some agricultural hubs, intermodal capabilities offer businesses the reliability needed in a changing market. By squeezing out wastage, providing flexibility and ensuring quality throughout the entire process, intermodal terminals will help food and agriculture step up to the challenges of the 21st century.