COVID-19 Creates Challenges for the Cold Chain By Peter Buxbaum


10 The COVID-19 pandemic has


tested the resiliency of cold-chain logistics in the United States, an industry in which supply and demand are very tightly connected. The unprecedented event saw consumers hoarding goods, especially food, creating gaps in their flow. Experts say that four months of


food inventory are in the supply chain at any given time. Given that fact, the shortages of goods sometimes seen in grocery stores, for the most part, were not about a lack of supply or capacity, but about a lag in the supply chain reacting to unusual events. But some shortages were


and continue to be very real. Thousands of meat workers contracted COVID-19, prompting large meat producers such as Smithfield Foods, Tyson, and JBS USA to close dozens of production facilities, creating bottlenecks in the nation’s meat and livestock supply chains. According to a report from CoBank Knowledge Exchange, meat supplies were shrinking by 30% as Memorial Day approached, leading to retail price increases as high as 20%, a situation likely to persist at least through June. In May,


communities were


reopening with about one week of meat supply in cold storage, according to the report. Food inflation and a weak U.S. economy leſt many consumers in financial strain, spotlighting the challenges faced


by cold-chain logistics


providers. “The COVID-19 crisis has


created both short- and long-term challenges for end-to-end third- party logistics companies like ours,” said Jamie Overley, CEO of East Coast Warehouse. “Adding to these is the uncertainty that surrounds this unprecedented


time and the challenges it presents when it comes to planning.” East Coast has seen short-term


warehouse operations benefit as inventories expanded, but outbound transportation flattens as consumer demand slowed. “As we look ahead to the second half of 2020,” said Overley, “we expect much will depend on consumer demand and the pace of recovery as the peak season of October through December approaches.”


Demand Surge


A surge in demand was also noticed at Lineage Logistics. In March, Lineage hired 1,000 new employees


“We are working closely with leading food producers, retailers, and distributors,” he said, “to move products through the global food supply chain.” Internally, Americold has


conducted mandatory briefing calls for global leaders to reinforce health and safety protocols and to review preventative measures. Truckers have been asked to remain in their vehicles, as Americold personnel loaded


positions of storage, making MTC’s new refrigerated cargo facility one of the largest of its kind in the Southeast.


Pharma/Medical Supplies


Delivering pharmaceuticals and other medical supplies has also assumed critical importance during


the pandemic. The to meet demand


globally and expected that another 1,000 would be required within a few months. “We are responding to surges in customer demand,” said


“The COVID-19 crisis has created


both short- and long-term challenges for end-to-end third-party logistics companies like ours.”


-- Jamie Overley, East Coast Warehouse.


Greg Lehmkuhl, the company’s president and CEO, “and to keep grocery stores stocked. “Over 14,000 team members


across the Lineage network are on the front lines of connecting people to food,” he added. “That charge is even clearer during critical times.” The


importance of cold-


chain infrastructure has been underscored by the effects of the pandemic. As retailers experience unprecedented demand for their products, Americold’s network of over 180 integrated facilities have remained operational and open, noted Fred Boehler, president and CEO of Americold Realty Trust.


and unloaded. To mitigate the effects of personnel shortages, the company has leveraged alternate shiſts, borrowed resources from neighboring areas, and engaged temporary labor. Americold has also launched a COVID-19 response team to address any questions or issues that may arise. The pandemic also makes


the opening of new cold- chain infrastructure under development that much more critical. MTC Logistics is in the process of developing a new refrigerated cargo facility at the Port of Mobile, part of a $61 million investment. “The feedback from processors


in the Southeast and our international import customers has


been extremely positive.


Mostly we hear, ‘Hurry up and open,’” said Andy Janson, president


of MTC Logistics.


“The COVID-19 challenges have magnified our essential place in the temperature-controlled supply-chain.” When completed,


the new


East Coast Warehouse saw its inventories grow as consumers hoarded food in the early days of the pandemic. (East Coast Warehouse photo.)


facility, which is scheduled to open early in 2021, will increase the blast freezing capability at the Port of Mobile by 30 truckloads per day and 40,000 racked pallet


Port of Virginia initiated a cargo prioritization program in late March that allocates equipment and personnel to ensure containers with personal protective equipment, raw materials going into PPE production, COVID-19 test kits, and hand sanitizer were processed and moved to their destinations rapidly. The port is working with ocean carriers to identify COVID cargo and reposition critical containers to enable expedited pick up. The port began handling


containers of COVID-19 test kits and protective gear for frontline medical personnel around the same time the program was launched. Aſter the COSCO Philippines arrived at Virginia International Gateway on March 25, the container with the test kits was offloaded in the early morning and was on its way to Ohio, one of the states hardest hit by the virus, within two hours. “Our operations team worked


closely with the ocean carrier and the cargo owner to make sure we moved that container first,” said John F. Reinhart, CEO and executive director of the Virginia Port Authority. Aſter that first container arrived, more started coming in rapid succession. Another such program


was instituted by Gulſtainer, which launched an interim and complimentary Express Service Lane to prioritize the delivery of medical supply consignments and fast track the availability of medical supplies at its ports across the United Arab Emirates, its home country. “The Express Service Lane expedites critical supplies and gets them to caregivers in the shortest time possible,” said Peter Richards, Group CEO at Gulſtainer. The


Delaware River ports


are leaders in handling fruit, vegetable, meat, dairy, and other food imports. “Our marine terminal operators and logistics providers have kept the docks


working smoothly, getting food to people throughout the Eastern United States and Canada,” said port executive director and CEO, Jeff Theobald. Paper pulp arriving at PhilaPort


goes to factories in Pennsylvania and other states to make personal hygiene products like napkins, paper towels, diapers, and toilet tissue. “Since the start of the crisis,” Theobald noted, “some of these factories have converted part of their production to make medical face masks.”


Uncertainty


From a business standpoint, perhaps the worst consequence of the pandemic is the uncertainty it has generated. “What and where the world


Issue 4 2020 - FBJNA


///PERISHABLES


eats may vary in the wake of the COVID-19 pandemic,” said Americold CEO Fred Boehler. As businesses and society


reopen, all are hoping for the best, but logistical planning needs to be more circumspect than that. “Warehouse operations may tighten as inventory declines,” said East Coast’s CEO Jamie Overley. “Inbound transportation may soſten as inventory levels stabilize, while outbound transportation may improve as shipments increase.” Overley sees future risk in the


cold-chain logistics space being driven by vertical—such as beer, water, confectionery, and food— and by segment. “We may also experience a soſt start in 2021,” he warned, “depending on the state of the pandemic at that time.”


Southeast seaports


USDA program opens doors for


With more steamship lines carrying refrigerated cargo, and many deploying larger vessels – some carrying upwards of 15,000 TEUs, seaports are increasingly challenged in accommodating these shipments. To capture the lucrative and competitive business, many seaports in the US are investing in infrastructure and improving on- and off-dock turn times. In the Southeast, seaports


have been working with the US Department of Agriculture (USDA) through a pilot program to be approved to handle cold-treated import product. Prior to this program, refrigerated cargo had to flow through specialized treatment facilities in the Northeast US to be cleared for distribution. The USDA Southeast In-


transit Cold Treatment Pilot allows a limited number of containerized cargoes to enter the port directly aſter completing a two-week cold treatment process as a safeguard against fruit flies and other pests, as well as acquiring all the required unloading clearances prior to the shipment’s arrival in port.


Among those that have


successfully completed the pilot program are the Port of Savannah, Port of Virginia, and Port of Wilmington (NC). The Ports of New Orleans,


Tampa Bay and Port Canaveral joined in 2016/2017. To accommodate increased


reefer shipments, the Georgia Ports Authority (GPA)’s Port of Savannah offers 485 plug- ins for chilled containers on chassis. Savannah can handle 3,341 refrigerated containers simultaneously. Its Garden City Terminal features the nation’s most extensive on- terminal infrastructure for refrigerated cargo, with 119 electric-powered refrigerated container racks. “Georgia already has a


strong, established outbound refrigerated market,” says Edward Fulford, GPA spokesman. “Handling 40% of all frozen poultry exported out of the US, Garden City Terminal is the nation’s busiest export terminal for frozen poultry.” Dovetailing with this


business is new steamship service to Europe and Asia. “Previously, Savannah was a p p rove d to receive


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