Alex von Stempel, Cool Logistics Resourcesaircargoevent.net/wp...logistics-and-e-commerce.pdfCool Logistics Global Conference & Exhibition Hosted by Port of Antwerp. 2-4 October 2018,

Cool strategies for core markets

10th Cool Logistics Global Conference & Exhibition

Hosted by Port of Antwerp

2-4 October 2018, Antwerp, Belgium

www.coollogisticsglobal.com


Alex von Stempel, Cool Logistics Resources







Food e-commerce at a critical junction

Key food sectorsOpportunities for

airfreight Challenges for the

logistics sector







Fruit and vegetables Fresh seafood and meat Flowers Pharmaceuticals Medical supplies Chocolate/wine Processed foods






www.coollogisticsglobal.comNote: World map based on the official UN published maps. Source: Seabury

MEC

ASIA

+2% / +5%

+3% / +8%

+4% / +4%

+7% / +6%

+3% / +2%

+3% / +4%

+6% / +9%

+3% / +1%

+7% / +11%

+10% / +0%

+1% / +5%

Global future perishables growth 2017-2021: Air Freight: ~3% per

year Ocean Freight: ~4%

per year

EUROPE

NORTH AMERICA

SOUTH AMERICA

AUSTRALIA

Perishables Logistics continues to grow...

AFRICA







0

20

40

60

80

100

120

140

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Mill tons

Source: Drewry’s reefer market forecasts






www.coollogisticsglobal.comSOURCE: SEABURY

South…New…

MexicoBrazilThaila…

EthiopiaNethe…Ecua…IndiaPeruChileAustr…

KenyaNorway

Colo…USA

Flowers

Asparagus

Pepper

Onions

OthervegetablesBerries &cherriesTropicalfruitsFish &seafoodMeat

213'956 7%210'614 7%210'358 7%205'999 7%194'320 6%193'204 6%140'064 5%125'743 4%111'090 4%104'587 3%88'683 3%73'002 2%72'726 2%57'666 2%56'347 2%37'877 1%

ExportsTonnage2016

Market share







• China became the largest global market in 2017, overtaking the United States, growing 28.0% (Source: Transport Intelligence, UK)

• China’s National Statistics Bureau: online retail sales of physical goods of food, clothing and other commodities went up by 28.6%, 20.3% and 30.8% respectively.







• 17% growth in cross border between 2017 and 2022, compared with overall e-commerce (cross-border and domestic together)

• Cross-border could comprise 20% of all e-commerce purchases by 2022, representing US 627bn

Opportunities forairfreight

• China the driver 70% growth year on year , value in 2015 estimated at 40bn USD = 6% of China’s total e-commerce spending

• South East Asia set to grow to an estimated 200 bn USD by 2025

Source: Transport intelligence







Food e-commerce

• Alibaba = pure platform

• J.D.com/ Amazon –platform and selling own stock

Others: VipShop, Dangdang, Jumei

What goes round comes round ...







Shipper

Collect Cargo & Deliver to Airport

Prepare Cargo

Load Aircraft Offload

Prepare Cargo Transfer Delivery

Handling PartnerForwarder Handling Partner Forwarder

Consignee

Origin On load Airport Offload Airport DestinationTrucking Trucking







Quality control

Qual.kontrolleQuality control

Quality control

Quality control

Farm Packhhouse

Cold store

vessel seaport unloading

container depotSuper market tconsumer

Inland depot

loading

Seaport

coldstoreColdstore

Coldstore







Service level Kpi’s• Actual vs Planned First Event

(PDR - Planned Date of Receipt)• Actual Vs Planned Delivery

(PDD - Planned Date of Delivery)• Latest Acceptance Time – LAT

(Dependent Product Definition)• Time of Availability – TOA

(Dependent Product Definition)• Flown as Planned

(Dependent Product Definition)

• Source: Cargo IQ

Tracking and control needed• Correctly Received By Carrier

FOH / RCS• Departure on Flight – DEP• Received Transit Airport – RCT• Received Final Airport - RCF• Ready At Destination Airport

NFD/TOA• Out For Delivery – OFD• Proof Of Delivery - POD







Direct buying• Multi-channel retailing• Rise of the E-tailers• Merger between on-line and off-

line and food service• 1. Driver: Technology• The ‘savvy’ consumer• 2. Driver: Quality/Health

Sustainability• Low price + convenience







* Retail sector: off-line low single digit growth vs on-line: double digit growth

• Growth potential for logistics sector: the fact that a large proportion of traditional retail still handles fulfilment in house.

• Home delivery costs, delivery failure and delivery fraud risks

• Savvy logistics operators will be able to ‘cream off’ business from both sides, unless companies such Amazon and J.D.com Alibaba get there first ...putting the big international on the back foot.







Walmart & JD.com• Integrated inventory

management• In-store and platform

integration• Fulfilment by nearest

warehouse

Source: Oliver Wyman

Jeff Bezos:

Customers are divinely discontent. Their expectations are never static. They go up. It’s human nature. We didn’t

ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a

better way, and yesterday’s , wow’ quickly becomes

today’s ‘ordinary’. at Fruit Logistica 2018







• Shoppers habits change: convenience culture: smaller volumes and more frequent purchases: (Small is beautiful)

• 1. Challenge: Home delivery : the weakest link is the trucker and he is the one who interfaces directly with the customer. The more b2c the greater the challenge! In Europe the logistics sector is bedevilled by the shortage of truckers. The answer is because they are underpaid!

• 2. Challenge: The explosion of packaging and waste: designed to cover the ‘sins’ of the physical supply chain?







0

50

100

150

200

250

300

Food waste by region

Endverbraucher

von der Produktion biszum Handel

Source: B. Nitsche







Lower-middle- and upper-middle-income countries

• Formulations of mostly cheap industrial sources

• Key feature: long shelf-life

Source: Carlos Augusto Monteiro







War on plastic bags!

• (Iceland, Waitrose: Supermarkets in the UK)

• Pulp trays and paper bags

• Banning of unrecyclable blackplastic trays







Food for thought

• Looking at airfreight in isolation may be not the only way of approaching the subject. What if the KPI,'s for one sector were to be adopted to oceanfreight?

• Can this be done? Can logistics operators think other than in silos, with freight divided into road, rail, sea and air?

Perishable Logistics

Logistics is the art of helping transport make its assets sweat. Perishable logistics needs to reach into those areas where mere physical movement is critical but is only part of the answer.

Perishable logistics is a form of predictive analysis without the risk of being weighed down by assets. It's making use of risk. (Time over distance)







Cross-border challenges

• Critical factors in cross-border e-commerce:

• Payment security (fraud)• Duties and fees on orders• Protecting domestic sellers (tax

collection issues)• Cash payments encouraged by

certain countries ‘encourages returns’ (Mexico for example)

• City congestion (different environmental policies

What is needed?

• A clear returns policy• Stating all cost in shoppers’ native

currency • Speed of delivery + security over

transit time• On demand start-ups for final

delivery

Technology to take out risks out of the last mile!







How is it sold?

• pick a vehicle (motorcycle, van or truck)

• set delivery route• track order in real time • confirmation of delivery• Easy peasy???

Back to the future?







• Are emerging markets less demanding when it comes to the quality of delivery?

• Is click and collect the likeliest model for China, where ‘western food retail model penetration is not so developed?

• Last mile could become the differentiator between retailers (i.e. logistics)

• Who should pay for delivery: the (r)etaileror the customer?

Product level• Sensor technology simulating taste• ‘Vertical storage’, as a counterfoil to

‘vertical growing’ (urban farms) • Intelligent packaging

E-tail, logistics + physical infrastructure• Uberisation of delivery market? • Merging between traditional retail and

food service concepts and its effect on food-ecommerce platforms

• E-commerce collection + mini logistics centres located near or integrated into private dwellings even?







• Will drones replace reefer trucks one day and if so, where?

• Drone carriers/mobile infrastructure/drone ports?

• ‘Cool free’ transportation?







Service level dynamics in the fresh produce supply chain

• Faster• More flexible• More precise• More transparent

Old and new thinking!

• Ultrafresh (berries, salads)• ‘Category’ thinking = old hat• Speed retailing = new• End-to end view

Solution: Strategic partnerships and predictive analysis







Rising middle class consciousness Convenience + Environmental+ Health

Asia will remain the driver in terms of fresh produce demand and technological changes and logistics solutions

Impacting: 1. fresh consumer habits 2. fresh produce logistics solutions

Value market outpacing volume market

Airfreight should benefit overall







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Alex von Stempel, Cool Logistics Resourcesaircargoevent.net/wp...logistics-and-e-commerce.pdfCool Logistics Global Conference & Exhibition Hosted by Port of Antwerp. 2-4 October 2018,

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