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Growing tonnage and logistic advances bode well for decade of the nineties.

Growing Tonnage and Logistic Advances Bode Well for Decade of the Nineties

Pinpoint temperature-control accuracy, more efficient offloading and customized services make state-of-art warehouse operators better cold chain partners.

The years that begin a new decade always seem to give rise to additional reflection about the future. Those of us involved in the international trade of temperature-sensitive products have good reason to engage in this meditation exercise just now. Things are changing with great speed in our industry; we are moving at a dizzying pace.

In just the last three years the international movement of refrigerated cargo has risen from approximately 42 million tons to 44 million tons. Volume is projected to reach approximately 53 million tons by the year 2000.

Reefer containers have increased with additions to the fleet resulting in a total reefer box count of roughly 350,000 teu (twenty foot equivalent units), up from 234,000 in 1986. This almost 50% rise in reefer capacity gives certain evidence of healthy growth by anyone's measure.

We find the tonnage is increasing in our market, and the additional capacity to move it internationally exists as well.

The reasons for this glowing state of affairs are threefold:

* Higher disposable income in the large consuming markets such as the USA, the EEC and parts of Asia allows people a luxury of choice as never before.

* This affluent consumer not only demands greater selection at the marketplace, but also insists on year-round availability of all products -- never mind the local harvest time.

* Finally, the growing realization that health and food choice are directly connected has brought unbelievable pressure on the consumption of fresh fruits, chicken and, more impressively, fish.

Tonnage of fruits and fish have been doubling in the decade of the 1980s. The movement of traditional hard-frozen products does not show such dramatic increases, but certainly they are expected to record some incremental gains over their already high tonnages.

In the area of chilled movement, controlled atmosphere and modified atmosphere shipping technologies, we can expect that more new products will become available to the consumer and, therefore, to our industry. If the decision to construct a new land-based warehouse were to be made today, certainly the land operator would struggle and choose carefully the amount of freezer space in comparison to chilled space his new facility would require. Selecting convertible freezer/chill rooms would be the most prudent decision to make so as to accommodate the market as it is developing today. No longer will we see the freezer-only facility as we have seen in the past.

The accuracy of temperature control found in newly constructed reefer containers is an amazing development. Temperatures can now be controlled to +0.5 degrees F. on frozen and within +0.2 degrees on chilled cargoes. This technological accuracy has doubled and tripled shelf life for certain products. In so doing, the reefer trades are now opening up the possibility of even more products never before offered in international trade.

However, the efficiencies and accuracies of the reefer box must now be matched by the land-based freezer warehouse or the new technology will be useless. How disagreeable it would be to discover that we who are warehouse operators could one day find that we are the point where the "cold chain" is broken! Those of us who receive this shipborne product must move to see that our accuracy of service is as good or better than that provided by the carriers themselves. We cannot let the product be more accurately handled at sea than it is on land in our storage facility.

Satellite Tracking

Additionally, new up links to satellite tracking coupled to computers allows the shipper to know at all times the temperatures of his product and even the exact latitude and longitude location of the container as well. Yet when that same customer lands his product and shifts to inland movements, he is barely able to tell what country or state his product is moving through. Temperature reports are sketchy at best and not usually available to the shipper until delivery is complete. Truck location is even more unreliable and we have no idea where the truck is situated most of the time. This logistic miracle of satellite tracking by the steamship lines is a challenge to those of us who are land-bound. Such will have to be matched or exceeded in the near future.

Changes in the waterfront manpower rules in the USA have also been dramatic. The court decision that cancelled the "50 Mile Rule" (whereby any container off-loaded within 50 miles of a port required the services of ILA labor) has opened up new possibilities for steamship companies.

In the past the higher cost of ILA labor made intermodal movement of the containers almost mandatory. The reefer would discharge from the ship, then move long distances inland to be unloaded. Many times that same container returned to the ship empty, making for a long return dray at great expense. Even so, this tortured movement was cheaper than dockside stripping under old labor rules. Furthermore, additional costs were incurred such as under carriage maintenance, tire replacement, etc. All the while this movement exposed the expensive container to possible road damage.

Now that offloading can be accomplished at greatly reduced cost, many steamship lines have found it to their great advantage to strip refrigerated containers at or near the pier. When this is the choice elected, it is imperative to the cargo responsibility that this offloading be accomplished in a temperature-controlled facility.

Once such a facility is located and used, the container can be lifted off the ship, then drayed to the refrigerated warehouse to be transloaded to a truck hired for a one-way delivery. The steamship line thus avoids the return dray and reduces the container's out-of-service time. The resulting lower cost for inland movements is complemented by the quick return of the reefer container to normal service.

Our own company has stripped boxes, shipped product inland, and then returned the reefer container to the same ship for reloading while the vessel remained at the dock! This is not the usual case, of course, but does serve to illustrate the efficiencies that are possible.

Certainly this type of turnaround makes for greater ship efficiency and results in lower costs as well. For one thing, reefer box requirements per ship slot can be dramatically reduced for liner services. Fewer boxes committed to each ship reduces capital investment expenses dramatically.

As we move into the 1990s, it is obvious that parties involved in the cold chain of international trade will be required to step up to a whole new standard of service. That standard will be higher than the already excellent level of service delivered today. All of us will be better for the challenge of higher standards. The farmer who grows the products transported will be offered new and expanded markets because we can deliver his goods at a higher quality. Capital requirements for these improvements will test all warehouse operators. Not only will we have to honor higher standards for shore side services, we will be increasingly asked to expand those services inland.

The NOCS Group now promotes the capability to provide services to reefer product from the time the ship arrives dockside until that product gets to the production plant or distribution warehouse thousands of miles inland. Our basket of services includes stevedoring, drayage, custom house brokerage, inspection, warehousing and all types of inland transportation. Our customers get a single invoice, but more importantly, they have a sole source of responsibility that can be looked to for satisfactory product handling. This totally unified movement makes life much easier for the importers.

For the exporter we simply reverse this entire organization. The product is picked up at the processor's plant quickly and moved through the cold chain until it is placed aboard the vessel bound for the open sea.

The decade of the '90s is exciting indeed. For those involved in the international temperature trade, the prospects continue on a dramatically upsurging line. Since we are given stewardship of this opportunity, we must be equal to the task of living up to the increased responsibilities. When one considers how many containers move through this complex organization -- thousands upon thousands of movements each year -- it must be said that our responsibilities have been well met in the past.

As we enter the 1990s, all of us on the land side of the cold chain are prepared to embrace new markets, new products and new opportunities. The customer's product will continue to be delivered on time and in matchless condition.

JAMES F. FARGASON, Jr. is president and chief executive officer of New Orleans Cold Storage & Warehouse Co., Ltd., headquartered in Louisiana, U.S.A.
COPYRIGHT 1990 E.W. Williams Publications, Inc.
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Title Annotation:Warehousing World
Author:Fargason, James F., Jr.
Publication:Quick Frozen Foods International
Date:Apr 1, 1990
Previous Article:Europe '92, CFCs, safety regulations: issues facing UK cold storage industry.
Next Article:Don't forget low-temp fundamentals when retrofitting high-tech coldstores.

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