Despite an increasingly tense situation in Hong Kong the 5th Cool Logistics Asia Seminar was held alongside the Asia Fruit exhibition without any sign of disruption thanks to additional security arranged by the organisers in co-operation with the local authorities.
GPE is the organiser of putatively the largest fruit and vegetable exhibition in Asia and a joint venture between Messe Berlin and Fruitnet Media International.
It was as if the world of perishables and logistics proved once more that good event management and quality care must also extend to the smaller world of perishable logistics.
Self-congratulatory statements usually tend to fall on deaf ears or in some cases may even prompt resentment.
There will always be exhibitors and a number of visitors who experience disappointment of some sort or other.
Admittedly there were a few speaker drop-outs this year. True, also visitor numbers were down on last year. Certainly 10 per cent on the first two days, as the organisers admitted. Also attendance at the various business forums was lighter than usual, with some sessions looking distinctly emptier than others at times.
Bird’s eye view
From the perspective of any conference speaker/organiser, an empty seat in the front row seems to scream and engender the panic response: Why is this the case?
A climate of general uncertainty and fear about the future does not leave the global food sector unscathed.
However, the notion that ‘people have to eat’ is beginning to sound a little hollow, especially with over- production as well as unsustainable agricultural production in some parts of the world and lingering food shortages in other parts.
Trying to bring together perishable logistics professionals from all the different stages of the supply chain and beneficial cargo owners has always been the hallmark of Cool Logistics events.
It was therefore heartening to see visitors during the opening session of Cool Logistics Asia 2019 last week standing at the back of the seminar, some listening intently to the opening speeches and the ensuing debate.
There are few speakers other than the former head of reefer trades at Maersk Thomas Eskesen, who continues to retain an exceptional following in the world of reefer container shipping. If Eskesen is assured of one thing it is that people will listen to him, especially when he spells out unpalatable truths.
The shortage of reefer containers this year could surpass “the storm” he predicted would hit the industry exactly ten years ago, at the first Cool Logistics Conference in Hamburg, organised by Cool Logistics Resources.
This time there is a whole battery of threats that could potentially knock reefer shipping sideways, beginning with the effect of slowing world trade, IMO 2020 (the advent of low sulphur regulation affecting ship fuel prices in Q1 2019) with the accelerated demise of conventional shipping coming on top of slow 2018 reefer box replenishment.
After two thin years of order books in terms of new reefer box purchasing, the signs are not good for the end-customers, i.e the exporters, producers, distributors.
There is also the impact of swine fever in China that could add to a potential lethal cocktail this year.
Meanwhile, Eskesen pointed out that carrier profitability on the whole seems to have taken the corner this year. Only CMA CGM seems to have broken ranks from the other carriers and opted for extending market share overall at the expense of boosting profitability.
To top it all. Mark Bennett of Sun Intermodal predicted that 2019 could well see a significant jump in reefer box retirement, which is partly due to the phasing out of reefer box units using R134a refrigerants in the EU over the next two years and box fleet age increase. So whilst neither carriers nor reefer lessors have any incentive to go out on a spending spree, reefer rates ought to go
up. This was a clear consensus amongst all three speakers tackling maritime issues.
Erik Osinga of DHL global Forwarding, the third speaker in the opening session agreed with Eskesen and Bennett, providing yet another twist: reefer trades are becoming increasingly disjointed with bigger and smaller trade flows existing side by side and real growth taking place mainly in more ‘peripheral’ categories. Only three categories pharma, meat and another group of commodities – summarily described as ‘other’ – seem to be showing signs of real growth. Under ‘other’ are included any type of novelty fruit or vegetable that make a first time appearance on retail shelves, but which may also disappear from one season to another. Bananas by contrast and fish have all remained relatively stable.
This lead to a discussion about the viability of operating LCL reefers using multi-compartment reefer containers with Eskesen arguing firmly against on the basis of this ‘being impractical’ and Osinga arguing that this could be possible whilst receiving support for his idea from Steve Alaerts of foodcareplus during the panel discussion.
Reefer visibility ahoy
On the second day it was revealed that predictivity is fast becoming the new mantra with themes like business trust, the need for reassurance and technological capability forming at natural backdrop to transport capacity, profitability and productivity issues.
Brian Robertson of Emerson, Gary Loh of DiMuto and Alfred Cheung of JC Food Republic discussed implications of e-commerce on the coldchain, including the emergence of parallel block chains developed for the produce industry such as DiMuto and solutions proposed by ocean carriers such as Maersk together with IBM. This lead to a discussion of different qualities of different block chain solutions.
As Brian Roberson quoted mind-boggling figures about the huge tonnage of both food wasted and growing cases of food poisoning driving change to creating more and better transparency. DiMuto claimed that the technology to provide each individual fruit in a box with its own QR code is not as far as people may believe. Yet doubt were expressed privately as to the feasibility and the cost of rolling out such a solution across the industry.
Meanwhile industry veteran Cheung took listeners on a guided tour to future technology with ice feeling technology tested in Japan and proton alignment which protects the integrity of cell structures of plants. In contrast Juha Majuri of Vakava demonstrated the potential of an ‘autonomus’ cold chain application in the African seafood supply chain tried and tested by fishermen at Lake Victoria in Kenya.
On the third day the seminar Bharadwaj Bhuyan from the Japanese carrier ONE brought a bit of good news: the carrier has just placed an order for 6000 new reefer boxes, equipped with Daikin and Starcool machinery, on top of 14,000 units ordered last year. The majority of the
orders have been placed with DAIKIN. The carrier also uses Starcool and Carrier.
ONE is is also launching a new service connecting South African ports with the Middle East, and India, which represents new territory as Bharadwaj Bhuyan admitted.
Another noteworthy presentation was given by Chris Catto Smith from Freshport Asia. Smith took aim at the excessive use of polystyrene as packaging material for perishables transported by air. By using optimised stowing techniques on aircraft carrier could save a lot of money, which they should pass on to cargo owners, according to Smith. He also welcomed the Certified Fresh system which was launched earlier this year and was also the subject of a separate presentation by Yvonne Ho from IATA during the conference showing that airlines are clearly getting their act together and improve their image as produce carriers.
Finally it was for Dr Manual Madrid from Fruit Profits to take the floor providing valuable insights into how better post-harvest treatment can help reduce waste.