Can Produce Shipping Bounce Back Amid Recent Disruptions
A lot of industries saw disruptions due to the COVID-19 shutdowns, but none may be more pronounced than the changes to the food industry, particularly fresh produce. By default, this also means that the produce shipping sector was hit hard and faced some of the largest hurdles. Produce procurement and shipment is critical to maintaining the health of millions of American consumers, but the means of offering fresh produce has proved a greater challenge during a global pandemic.
Shipping companies, now more than ever, are turning to new best methods alongside implementing shipping software solutions such as RedwoodConnect 2.0 to help facilitate some of these needed changes.
What has happened in the produce shipping industry due to COVID-19, and how will this impact the sector moving forward?
Grocery eCommerce Skyrocketed
As people were forced to stay home with the pandemic, online shopping for groceries became more commonplace. Stores made shopping for groceries online more accessible, and delivery services like Instacart meant people didn’t even need to go to the store for curbside pickup.
As grocery ecommerce took off, the need for a strong last-mile logistics strategy also took hold. More and more retailers were looking for ways to minimize delivery costs by bringing food products as close as possible to the end destination. This proved more challenging than stocking physical storefronts, as people were demanding new types of items (more pantry goods and frozen foods) as well as stockpiling higher demand of those items (buying in bulk).
Grocery and delivery workers were still considered “essential,” but that doesn’t mean we didn’t still see a driver shortage. In March alone, grocery ecommerce went up by 100%. That means the number of food deliveries doubled, or in some cases more than doubled, and companies had to call on individual drivers to meet this rise in demand. This is creating a more on-demand “Uber-esque” last-mile delivery for produce shipping, compared to traditional freight models.
Food Safety Became a Significant Concern
Although we aren’t sure if COVID-19 can spread through food or surfaces, other diseases do spread that way, so people grew more concerned about safety when shopping for groceries. Food procurement and sanitation of packages became a key priority for consumers and supply chain partners. In warehouses, we saw the implementation of a lot of sanitation robots, and new regulations for drivers and deliveries were implemented.
Despite this increased concern for safety, a lot of health inspections actually stopped. Companies often weren’t penalized if they couldn’t conduct third-party audits or health inspections because companies shut down and government officials weren’t working. This meant a lot of supply chains involved in produce shipping were left in the dark about methods to best get their food products out to consumers safely.
There’s a Shortage of Cold Transport
There’s a greater demand for grocery delivery, and that includes fresh produce. But fresh produce goes bad quickly, so the demand for cold transportation has risen higher than ever before. Even prior to the pandemic, there was a shortage of refrigerated trucks—so much so that companies were looking into drones to deliver temperature-controlled items.
We were already discussing the huge growths for the cold chain in 2019, and COVID-19 launched that demand to new heights for this year. Retailers and LTL shippers are looking for new ways to meet the demands for refrigerated shipping, including increasing capacity, refining unit tech, utilizing the IoT, and partnering with global and local 3PLs. The cold chain is critical to the movement of food products and pharmaceuticals, so logistics organizations are working diligently to meet this shortage head-on.
Local Food is Taking Precedence
Since it’s challenging to meet the need for cold transport, local procurement is becoming more popular than ever. Consumers have been leaning towards local goods for their health and wellness for the past few years, but it became a strong, strict demand during the pandemic. For safety concerns, customers don’t want food that has traveled long distances and touched a lot of hands, and they definitely don’t want food from overseas.
One of the 5 logistics trends we are seeing after COVID-19 is that globalization is taking a major backseat to localized production, manufacturing, and transportation. In the same vein, we expect the growth in numbers and the success of local farmers and retailers. This will mean that LTL companies will need to focus on optimizing local delivery services through effective route planning and advanced technologies. This will reduce costs, but it requires a new type of 3PL method that emphasizes last-mile logistics and could potentially pave a new way for safer produce shipping. efforts
Supply Chains Require Greater Visibility
Like other sectors in the logistics industry, enhanced visibility will be the only way to mitigate risks moving forward. Supply chain connectivity is critical to surviving the post-COVID world. We anticipate that more and more vendors will outsource to 3PLs, not just for transportation but also for storage, tech solutions, and risk management strategies. This means there will be more partners along the chain that need to stay in contact in order to deliver quickly, efficiently, and safely.
A lot of businesses are feeling uncertain about the future. Our goal at Redwood Logistics is to continue moving forward, and that means using brilliant minds, advanced technology, and performance excellence to improve supply chain agility at every turn.
That’s why we created our on-demand webinar with insights from FreightWaves Research Analyst Andrew Cox; Erin Breen, Vice President of Strategic Sales; and Eric Rempel, Chief Innovation Officer for Redwood Logistics. In this resource, we discuss the impact of ecommerce and supply chain disruption for the first half of 2020—and what this means for the industry moving forward.
In this free webinar, we’ll review:
- Fluctuations in shipping costs
- Percentage of sales shifted to ecommerce
- Mitigation of pull-forward in demand
- Impact on international and cross-border shipments
- Importance of freight visibility
Register here for free for the Redwood Logistics Managing Supply Chain Disruption Through Greater Visibility webinar.