Being a dealer of the future means keeping a finger on the pulse of the refrigerated transport market. Doing that however can be easier said than done. Particularly when there appears to be a large number of forces at work shaping the industry’s future.
That’s why to help, we’ve drawn up a list of the 6 major trends set to impact the business arena in 2020 – and provided a short overview on each:
Trend #1: Going green for a smarter business
Trend #2: Increasing visibility through the blockchain
Trend #3: Fresh is the new frozen
Trend #4: Machine Learning and AI enters the cold chain
Trend #5: The growing emphasis on cutting costs
Trend #6: Uncertainty drives the need for resilient supply chains
Trend #1: Going green for a smarter business
Focusing on sustainability makes sense for many of our customers. To start with there’s an immediate need to respond to consumer demand for ‘greening’ their operations (supply chains inside consumer companies account for 80+% of their greenhouse gas emissions).
More sustainable logistics can also help with continuity of supply and offer great potential for new business partnerships. That’s why companies will up their efforts in 2020 to:
- Evaluate suppliers on their green credentials
- Improve product design and utilize recycled materials
- Embrace innovation and the best in green fuel sources like Cryotech
- Enhance shipping through consolidation and route optimization
- Reduce emissions through technology like Thermo King’s Sustainable Solutions
Trend #2: Increasing visibility through the blockchain
Another key trend will be the rise in automated monitoring of all starts, stops, and handoffs within a typical cold chain. An emerging solution here is blockchain distributed ledger technology combined with IoT sensors (on freezers, containers etc.) and advanced telematics like Thermo King’s Connected Solutions.
Blockchain itself is a secure way to log and register transactions, while also ensuring a tamper-free auditable record. This has obvious value for logistics companies to demonstrate compliance, and for sectors like pharma to show the authenticity of products being shipped.
Progress here is ramping up, with platforms such as TradeLens offering ‘event processing’ for a growing number of carriers, major shipping lines, 3PLs, and freight forwarders.
Trend #3: Fresh is the new frozen
Consumers are putting a premium on fresh, and this in turn is inspiring the refrigerated transport market to achieve historic levels of growth. Not that it’s just the health-conscious driving this demand: so too is the ever-growing appetite for convenience meals.
Then there are nutraceuticals derived from natural bioactive compounds that include:
- Dietary supplements
- Functional foods (probiotics and fatty acid-based foods)
- Vitamins/minerals and amino acids
- Proteins and peptides
This market, valued at $64.8 billion in 2015, is expected to reach a value of $102.6 billion in 2024. Brought together, these factors mean that refrigerated transport will continue to see its role expanding in both scope and complexity.
Trend #4: Machine Learning and AI enters the cold chain
Inspired by cheap IoT sensors, always-on connectivity, cloud computing, and emerging Machine Learning and AI capabilities, the productivity of logistics firms is expected to receive a big boost in 2020. It’s also the year leading logistics companies will employ ML and AI to:
- Reduce risk – with improved forecasting based on analysis of real-time operational conditions to find the ideal route/time to ship etc.
- Reduce cost – analytics and automation enable faster, more accurate lead times and expenses, reduced labor costs, and less downtime
- Increased efficiency – by automating systems to find the nearest products and the best way to get them delivered in the shortest period of time
- Smarter finance – where manual tasks such as invoice processing, chasing exceptions, and handling international taxes etc. are automated for speed and accuracy
Trend #5: The growing emphasis on cutting costs
Fleet Managers know that a well-run cold chain reduces transit time, enhances customer service, and saves money. That said, such savings don’t come easy, and require a commitment to cutting costs without cutting corners. That’s why in 2020 we predict a greater emphasis on:
- Consolidating shipments – based on improved analysis of routes, schedules, and capacity to lower the total number of trips made
- Putting real time to work – where increased visibility allows Fleet Managers to find ideal packaging and load combinations for each journey
- Compliance through technology – from all-electric refrigeration to accurate temperature monitoring to reduce wastage and reduce last mile costs
- Improved fuel monitoring – to help minimize the potential for fuel theft, and setting baseline expectations for the amount of fuel required for each journey
Trend #6: Uncertainty drives the need for resilient supply chains
Uncertainty is still the standard for most global supply chains. Take for example oil prices. Geo-political concerns in Libya and Iraq, China trade wars, and trade sanctions against Venezuela and Iran – all have impacted price per barrel. Despite such volatility however, it’s still expected to remain the dominant fuel source until at least 2030.
Then there is the political dimension, and factors such as Brexit that threaten to place further restrictions on global trade. Restrictions of course mean cost. They can also mean potential bottlenecks, tariffs, and custom checks – alongside the resulting disruption.
Finally, there is the environmental angle. Customer expectations in this regard are hard to predict, but can quickly require logistics companies to offer more sustainable options – in terms of packaging, emissions, and zero waste.
The key takeaway for 2020: companies will need to be nimble in the way they adapt to new regulations, shifting resource availability, and import/export restrictions. To do this requires end-to-end transparency of all assets at work and at rest, and the ability to intelligently allocate the right asset to the right job at exactly the right time.
