Technological innovation is not tackling core inefficiencies in cool-chain logistics because of shippers’ tolerance of product spoilage. And, until this mindset changes, there is no real incentive for dramatic technological advancement within cold chain logistics.
That is the view of logistics expert Kris Kosmala, partner at Singapore-based consultancy Click & Collect, speaking at Cool Logistics Asia today about artificial intelligence and cold chain logistics.
“Until today, unfortunately, shippers accept that a proportion of their produce will get spoiled in transport. One of the biggest issues we face is this acceptance of loss of product, rather than saying we should eliminate it completely,” Kosmala told delegates attending online.
“Shippers are resigned to accept a given percentage of spoilage in the system and they are fine with that. Why? Because it is very easy to apply this cost in such a way that it’s the ultimate buyer who pays for the loss, so essentially the loss is baked into the cost paid at the end. This is unfortunate.
“As a result, tech-based disruptors aren’t tackling what is important in cold-chain logistics – ie spoilage, they are tackling the fringe problems,” Kosmala said.
“Unless our mindset changes to completely eliminating wastage from supply chains we are probably not going to make a dramatic leap in thinking how the technology could work for us, how it could be applied differently and what is needed to change or to address the core problem and not the fringes.”
On average, a reefer container is handled 15-20 times in transit, Kosmala said. The primary reasons for spoilage during that journey are damage to transport or storage systems, condensation, heat exposure, microbial growth, and damaged goods, he added.
The best way currently to prevent spoilage is to implement standard operating procedures (SOPs), whereby equipment, systems and processes are checked and adhered to at every stage, Kosmala said.
“Digital improvements aren’t transformative yet. The tech innovation doesn’t substantially alter the standard operating procedures. Maybe that’s the problem,” he said. “If we are handling in such a way and the cargo still gets spoiled, maybe our procedures aren’t adequate in handling the process.
“We could employ AI to handle things differently. But the way AI is being used currently isn’t doing this. We are embedding old learnings into the new AI, and we’re not asking the AI to find new ways to do things," Kosmala continued.
"Maybe there is a need to disrupt the disruptors. Maybe there is a next stage we are still to experience.”