C. MaheshwarAnglo Eastern Maritime

Academy

International Cargo & Logistics Conference, 2012 Kuala Lumpur, Malaysia

17-18 April 2012

This presentation covers the following topics:

Introduction - Reefer Cargo and South Asia The Cold chain Issues Refrigerated Containers

Solar Powered Reefer Containers

360 Degree and Zero Damage Concepts Partners in the Reefer Cargo Export Supply Chain

The apples that are available in today’s supermarkets could be as old as six years and could have been grown in apple orchards in New Zealand and stored in cold storages using Controlled Atmosphere.

They would look and taste as if they were plucked from the apple orchard yesterday.

That is the Power of Reefer Technology!

Fruits, Vegetables and Flowers – Chilled Cargo

Meat, Fish, Seafood, etc. – Frozen Cargo Live Worms – Chilled Cargo Pharma products and Vaccines - Chilled

Cargo Temperature Sensitive Chemicals &

Explosives - Chilled or Frozen Photo films - Chilled cargo Electronic Components – Chilled Cargo

Carried in a 40 feet Reefer Container Fruits & vegetables: < US$ 60,000 Frozen fish, frozen meat and cut

flowers: US$ 60,000 – US$ 120,000 Chilled Meat, frozen shellfish and

flower bulbs: US$ 120,000 – US$ 300,000

Electronic Equipment, Photo film, computer chips, printer cartridges, medical supplies etc: > US$ 300,000

http://en.wikipedia.org/wiki/File:Newly_industrialized_countries.svg

South Asia

Second largest producer in the world of fruits and vegetables -

Second highest producer of milk

Fifth largest producer of eggs

Sixth largest producer of fish –

Cold storages available for only 10% of the produce.

Milk cold storage capacity of only 40%

Insufficient storage capacity for preservation

Require billions of dollars worth capital investment

The story goes on and on…………

About 30% of South Asia’s production of fruits and vegetables gets wasted because of poor post harvest management practices.

In India, the value is about US$ 13 billion every year.

Tomatoes, Cauliflowers, onions and watermelons are thrown on the highway because it is not worth the effort to transport it to the markets.

Cold storages are uneconomical to run, inadequate and are located far away from the farms and harvested products have to endure the ambient heat.

1996: Polio Eradication Program started

2000: Expected Global Eradication of Polio

2007: 866 Polio cases reported

Fresh Polio cases are still being reported.

One of the reasons for the failure of Polio Vaccination program in India is the absence of an effective cold chain, especially, at the Last Mile which rendered the vaccine ineffective

The wastage of perishables is attributed to gaps in Cold Chain because of: High Ambient temperature Poor transport infrastructure Lack of knowledge and awareness Poor roads and poor connectivity Dusty atmosphere Non availability of refrigerated carriers Difficult Geographical terrain Unreliable grid power

This results in instability in prices, farmers not getting remunerative prices, rural impoverishment resulting in farmers’ frustrations and suicides.

Retail Distribution of perishables presents two particular challenges: • • Maintaining product quality throughout the distribution chain, including requirements for gap free cold-chain continuity• Managing the distribution of the products to consumers in the “last mile” of the distribution chain (i.e., the stage where products are delivered from the wholesaler or retailer to the consumer).

Farmer Village agent at Taluka Level

Market agent at Mandi level Wholesaler Semi-Wholesaler Retailer Consumer Contributes to Product Deterioration,

especially in case of perishable products like fruits and vegetables due to extended post harvest time lag without any value addition.

What we need is a seamless gap-free cold chain.

About one-third of these post harvest losses of perishable products can be reduced by using Solar Powered Refrigerated Containers to transport harvested products from farms to cold storages.

For India, optimum usage of the containers can yield an annual savings of about US$ 4.5 billion.

The investment is US$ 2.5 billion and the payback period is just 6-9 months.

External Dimensions: 20x8x8.5 Ft. Internal Dimensions: 18x7.5x7 Ft. Internal Volume: 1000 Cu. Ft. Payload Capacity: 21350 Kgs Gross Weight: 24000 Kgs Temperature : -25 To +35 Deg C Power Consumption: 3-5 KWh

Why Solar Power Depleting Fossil

Fuels Growing

Environmental Concerns

Erratic and Unreliable Grid Power

Myth about Solar Power Solar PV power is

very expensive

Following Moore’s law, it is expected that with the new generation technology with concentration equivalent of more than 1,600 times the sun's energy onto solar cells, it would be possible to produce electricity at a wholesale cost of US $0.05 per kilowatt-hour (kWh)

For INDIA: Total Annual Losses in Fruits and Vegetables:

40 million MT of Value: US$ 13 bn (30% of total production)

Payload per Reefer Container: 21 MT Containerisability Factor of Fruits &

Vegetables: 0.5 No. of Containers required to transport the

total produce: 16 million No. of Containers required if each Container

makes one trip a day: 42,000 Cost of a 20 ft. Container with Solar PV panel:

$ 15,000+$ 37,400=$ 52,400 Cost of 42,000 Containers: $ 2.2 bn Reduction in Post Harvest Losses achieved per

year: $ 4.5 bn (35% of Total Losses). Payback Period: 0.5 years or 6 months

The solar energy available averages 5.0 kw/sq. m/day

South Asia has abundant solar resources, receiving about 3000 hours of sunshine every year,

Has a potential of about 20 MW per sq km

Cost Of 1 Kwh Using DG Set: 15 Ct Cost Of Running Reefer Container Per Hour @5kwh: 75 Ct Cost Of Running Reefer Container Per Day (12 Hrs.): $9 Cost Of Running Reefer Container Per Year (365 Days):

$3,285 Cost Of Running Reefer Container Using Solar Power: Nil Cost of fitting Solar PV panel on a 20 ft Reefer container:

$ 37,400 Cost of a 6KVA DG Set: US$7,000 Cost of maintenance of a DG Set: US$ 3,000 per year Payback Period Of Solar Power Vs. DG Set: 27,400/3285=

approx 8.4 Years Other long term environmental and social gains.

Refrigerated Containers: upto 42,000 to start with (India alone)

Solar PV Panels: upto 18.4 million square feet

The 69% of South Asian population depending upon agriculture and allied activities will be lifted up into positive economy.

Better quality and nutritious food for our population.

Better health standards. Increase in awareness of

the availability and use of technology for preservation of food products.

Better export potential and increased foreign exchange earnings.

Cold chain is a logistic system that provides a series of facilities for maintaining ideal storage conditions for perishables from the point of origin to the point of consumption in the food supply chain.

The chain needs to start at the farm level (e.g. harvest methods, pre-cooling) and cover up to the consumer level or at least to the retail level.

A well-organized cold chain reduces spoilage, retains the quality of the harvested products and guarantees a cost efficient delivery to the consumer given adequate attention for customer service. IF ANY OF THE LINKS IS MISSING OR IS WEAK, THE WHOLE SYSTEM FAILS.

Temperature Measurement, Monitoring, Control and Recording

Traceability Accountability Transparency Effective Communication Networking and Involvement

An integrated cold chain infrastructure covering major production areas, processing units and distribution centers which will call for the following:

Strong fleet of refrigerated transport vehicles to connect the farm level storage facilities, the processing units and the various distribution centres.

At retail outlets, display cabinets for marketing of frozen food products are to be provided.

Need to augment cold storage facilities and container handling facilities at major ports as also an air cargo complex for targeting the global market.

Quality Awareness and Consciousness to compete globally.WE NEED SOMETHING ON THE LINES OF 360 QUALITY AND ZERO DAMAGE CONCEPT OF REEFER PRODUCTS WHICH IS BEING USED IN EUROPE.

Set of voluntary standards for specialised reefer shipping lines and their service providers.

Launched by a group of specialised reefer operators (Specialised Reefer Shipping Association - SRSA) including Great White Fleet Ltd, Green Reefers ASA, NYKLauritzenCool AB, Seatrade Group N.V., STAR Reefers Ltd. (Blue Star Line) and Universal Reefers Ltd./Cape Reefers in 2006

Aims to meet customer needs by promoting the highest standard of quality and cargo care; on reefer vessels, in port terminals and in liner trades.

Recognises that the specialised reefer shipping lines and their service providers have to work jointly to achieve this goal.

Brings transparency in the supply chain of perishables on the basis that in a collaborative supply chain everyone involved should assume responsibility for their activities and take corrective action to eliminate defects.

Implementing practices and using equipment in terminals and ships that will prevent damage to cargo

Uniform way of establishing damage and following an agreed action plan when damaged cargo or cargo with exceptions is presented to the terminal and ship

Uniform way of recording exceptions at reception, loading, unloading and delivery of cargo.

Establishing local working procedures for ports of loading and unloading which are compatible with the requirements of the Code

Establish quality teams in ports who will analyse the damages their cause and introduce preventive measures

Provide feedback upstream in the supply chain

A body dedicated to improving Food Safety and Food Quality in the specialised reefer shipping has been formed.

Main task - to develop guidelines for the implementation of the 360 Code and develop it further to meet the needs of the market.

Developed Uniform Guidelines for auditors and certification bodies that will audit the terminal and ships.

Classification societies and other accredited bodies that meet the approval of the 360 Quality Association will certify the shipping lines and the port terminals according to certification procedures.

Checkpoints are established in the supply chain to monitor the condition of the cargo and prevent damaged cargo from coming onboard and recording accurately the exceptions at the time of delivery.

The terminals and stevedores record the exceptions at the checkpoints in a properly structured database which allows to analyse the exceptions to reach the Six Sigma method for improving quality.

Lays down the conditions for inspection and recording of exceptions, for measures taken, and communication to everyone involved of the results – all in a uniform way and by using properly structured data.

Makes the transport process transparent and provides a firm base for taking corrective action at one or more points in the supply chain.

Zero Damage - a mindset in which we develop respect for the products we carry along with the livelihood of all partners in the production and supply chain.

Zero Damage is an industry standard adopted by SRSA members and is a part of 360 degree Quality Initiative of SRSA.

Motivates people to take care of the cargo all along the way.

A drive against reefer cargo claims and aims to enhance Customer Satisfaction.

Reminds about respect for cargo and equips the crew members with the knowledge and expertise in cargo care, Reefer Cargo losses have been reduced substantially by use of Zero Damage Concept.

Procedures have been clearly spelt out so that the cargo is handled economically, efficiently, professionally and carefully.

Checkpoints in the supply chain ensure that responsibility is handed over smoothly removing any ambiguity and enhancing transparency.

Whenever any cargo damage occurs, answers are sought as to WHY, WHERE and WHEN the damage had occurred reinforcing the commitment “Whoever is responsible for damage is accountable for the damage”.

Farmer/grower Packing Station Truck Terminal or Cold

store in Load Port Stevedore in Load

Port Port Captain

Vessel Stevedore in

Discharge port Terminal or Cold

Store in Load Port Truck Distribution Centre Supermarket

Being his livelihood, the grower/farmer takes very good care of the cargo.

Regular quality checks will be carried out during the various stages of the growing or production process.

Refrigeration of the product at the grower’s end is highly recommended as the grower has no control over its handling and storage after it is sold and leaves his hands.

It buys the growers that extra shelf life time that the wholesaler and retailer might reduce with poor handling procedures.

A grower who can meet the challenges of preserving the quality from field to dinner table will be able to expand his marketing opportunities and will be able to compete better in the market place.

If a product does not hold up in the distribution chain, often the grower is blamed for poor handling practices.

Even the truck driver who takes the cargo to the final destination point - a supermarket or a local grocery store has a role to play in the Quality System.

This could be our End Consumer!

This is not THE END

This is a NEW BEGINING!

NamasteNamaste