Designing cold chain logistics solutions for chilled, fresh and frozen
products undoubtedly requires a highly involved level of commitment and
attention to personal detail. Unlike dry
goods, temperature-sensitive commodities
must be precisely timed — after all, the
integrity and sustainability of the product
depend on it.
“The high level of service demanded by
the perishable industry cannot be overstated,” said Michael Cohan, senior director of
the perishable division for AIT Worldwide
Logistics. “Since these products have a
finite shelf life, an extreme sense of
urgency is attached to shipping these
unique and delicate commodities.”
Smart Business sat down with Cohan to
discuss how to both feed and satisfy customers’ increasing appetites for the most
time-sensitive niche in the logistics market.
Do you think that perishable goods customers are more willing to sacrifice cost for
quality, given the critical nature of their commodities?
Faced with uncertain economic times,
customers are looking to strike a better
balance between cost and quality and have
become far more conscientious about their
spending. The food industry has been challenged as much as any other — revenues
aren’t keeping up with the increased cost
of ingredients, leaving less than desirable
margins and bottom lines.
From the high-profile Fortune 500 companies to the local food processors, our
customers big and small are being forced
to create efficiencies in order to sustain
profitability.
It is my view that the lifeblood of any successful company is new product innovation and development, especially in the
fiercely competitive food industry.
For example, new product rollouts are a
big business for the perishable division at
AIT. In coordinating new product development activity between the marketing and
sales operations teams of our clients and
their food brokers and sales representatives nationwide, it is imperative to consider the ‘soft’ cost of doing business.
When sacrificing quality in the name of saving a little, you can potentially expose
an organization to a whole host of risk factors: damages not only to the products, but
a company’s reputation and good name,
lost sales revenues and, most importantly,
loss of customer satisfaction.
What kind of message are you sending to
a potential client when that new item it has
invested tremendous capital in arrives in
an unsatisfactory state? How are your brokers and salespeople going to make a
splash in their presentation with a smashed
cinnamon roll, melted éclair or crumbled
Danish?
What are the risk factors involved in shipping
perishables, and how do you best avoid
and/or eliminate those potential risks?
Service delays are one of the primary
risks in the perishable industry — very little wiggle room exists, if any at all, in preventing spoilage, melting and thawing in
transit of these temperature-controlled
commodities.
No matter how innovative the techniques
you use to pack and protect each product, the responsibility to re-ice the shipment or
find a cold storage facility in the event of a
service delay falls in your partner’s hands.
At AIT, not only must our in-house nationwide network of 36 station locations be
trained in our company’s strict packing
procedures, they must also use the proper
insulation equipment and tools necessary
to ensure the safe, fast and economical
shipping of perishable products.
For example, meringue has an extremely
delicate, frothy composition — if packed in
dry ice, the product will deflate. In order to
maintain product integrity, the network of
partners who handle your products on a
daily basis should know to use refrigerator
blue ice instead.
Regardless of the inevitable risk factors
encountered from the point of pickup to
the point of delivery, you are ultimately
responsible for the product. Ensuring you
have a network of trained agents and partners possessing extensive knowledge of
your packing procedures drastically
reduces the possibility of service failures.
What are the toughest challenges faced by
the perishable industry today, and how do
you contend with these challenges?
Fighting for limited cargo space has most
certainly become the toughest challenge.
The transportation industry has experienced a snowball effect — reduced schedules, smaller planes, ever-increasing port
congestion, exorbitant fuel prices and
reduced capacity have left everyone fighting for the same cargo pits as passenger
planes.
In scrambling to schedule these bookings, you must be creative in working with
various carriers to design the most efficient
logistics plans for your customers.
It is also absolutely essential, I feel, to
remain in touch with the day-to-day operation — because the moment you remove
yourself from it is the moment you are no
longer capable of addressing the problems,
assessing the risks involved and finding the
workable solutions.
MICHAEL COHAN is senior director of the perishable division for AIT Worldwide Logistics, Inc., headquartered in Itasca, Ill. Spanning
numerous nationwide locations and an ever-increasing network of international partnerships, the global transportation and logistics provider
delivers tailored solutions for a wide variety of vertical markets and industries. Reach him at www.aitworldwide.com or (800) 669-4AIT.