Temperature-controlled cargoes are all the rage.
(Article originally published in Nov/Dec 2018 edition.)
French container line CMA CGM, the globe’s second largest mover of temperature-controlled cargo, seems to get it when it comes to developing new technology to transport perishable goods. That’s not to say it moves these products any faster, but its various initiatives in developing technology for this segment exemplify its focus on moving high-value products while maintaining product quality en route.
The line’s latest reefer technology is called CLIMACTIVE. CMA CGM says it was “created for highly sensitive commodities that require special attention due to their biological specificities and maturation time. It specifically targets high-added-value products, long-transit-time products and organic products.”
CLIMACTIVE follows the launch in the past few years of other CMA CGM reefer technologies such as REEFLEX, a system to transport temperature-controlled liquids, and AQUAVIVA, a temperature controlled container designed to move live lobster.
A Bigger Pie
CMA CGM’s focus on temperature-controlled cargo shows how carriers and ports are developing physical infrastructure and creating software programs to capture real-time data in an effort to grab a piece of this lucrative pie. And it’s a pie that is getting bigger.
London-based Drewry shipping consultancy stated that global seaborne reefer trade grew over five percent in 2017 to 124 million tons with containerized reefer traffic growing by eight percent. It based the containerized growth on the shift from specialized reefer ships to containers.
Maersk Line, the largest container line in the world, is also into innovation and technology with advances in digitization that are very adaptable to the cold supply chain. Maersk has teamed with IBM to create a blockchain-based global trade solution known as TradeLens.
The goal is to develop a highly secure digital ledger system that promotes the sharing of information across the global shipping industry and thereby reduces costs, improves productivity, increases the speed of delivery and provides transparency. The blockchain structure will ensure the safety and security of the system.
The new collaboration will integrate global shipping and trade partners including terminals, shippers, freight forwarders and ports to provide a single shared and trusted view of supply chain transactions. The technology will reduce the need for multiple records and documents produced at each point in the supply chain.
“TradeLens is about more seamless and secure sharing of information,” says Maersk spokesman Mikkel Elbek Linnet. “It will benefit temperature-controlled cargo and the cold chain more generally because actionable information is captured on the platform.”
While carriers and cargo owners invest in technologies that improve the transport efficiencies of “cool” cargo, ports continue to pump money into their infrastructure, both above and below the waterline.
“The Port of Virginia is focused on diversifying its cargo mix and expanding the amount of refrigerated cargo we handle, both imports and exports,” says port spokesman Joe Harris. In FY 2018, Virginia processed 71,561 TEUs (twenty-foot-equivalent units) of refrigerated cargo. There are more reefer imports than exports with northern Europe being its busiest trade lane.
“The majority of the reefer cargo we handle is imported foods and beverages,” Harris explains. “The port is also playing a bigger role in processing refrigerated produce from South America as it is now part of the U.S. Department of Agriculture’s Southeast In-Transit Cold Treatment Pilot program.”
Virginia is in the midst of a $700 million expansion of its two primary container terminals, Virginia International Gateway (VIG) and Norfolk International Terminals (NIT). “As part of the expansion, we are making a significant investment in infrastructure for reefer unit,” says Harris. “The major portion of the expansion centers on redevelopment of the existing container stack yard at NIT and expanding the stack yard at VIG. As part of this, we are adding reefer racks to the new stacks to provide better access to reefer units. The investment shows potential customers that we are serious about boosting our capabilities to handle this cargo.”
To further support its reefer business, Virginia recently put into service a portable, 40-plug central power unit that can be mounted on the Richmond Express barge, which moves containers between Norfolk and Richmond. The service will also employ a specialized, heavy-lift forklift to load and unload the cargo at the Richmond Marine Terminal.
Virginia’s “Wider, Deeper, Safer” project to deepen and widen Norfolk’s commercial shipping channels recently secured full federal authorization. The project will make Virginia the deepest and safest port on the U.S. East Coast, enhancing its attractiveness to bigger ships. The dredge work will take the inner harbor’s commercial channels to 55 feet and the channel in Chesapeake Bay to 56 feet. Moreover, the channels will be widened to as much as 1,400 feet in selected areas to allow for two-way traffic of ultra-large container vessels. The target completion date is 2025.
Frank Camp, Director of Cargo Sales at the Port of Jacksonville (JAXPORT), says reefer cargo continues to grow with both imports and exports. Citrus and poultry have been a large part of the export market while seafood is a major import. The growth is being supported by investments in reefer warehousing by private companies like Aqua Gulf, Caribbean Shipping and Crowley Logistics.
While JAXPORT employs new technology to monitor container temperatures to ensure products are properly stored through transit, one matter that is becoming a major issue is the availability of truck drivers and chasses. A driver shortage has been a supply chain problem for quite some time and has shippers concerned because “We’ve got to make sure we have truckers in place to move product off the port, and with perishable products it’s even more important,” says Camp.
JAXPORT’s Nancy Rubin adds that some higher educational institutions in Jacksonville have developed a strategy to attract younger drivers to replace retiring drivers to help fill the gap. Part of that strategy is to inculcate a work life balance to make the profession more attractive.
JAXPORT is also a major depot for products moving to Puerto Rico. The country’s electrical grid that powers reefer warehousing is still largely unstable because of last year’s hurricanes, so more product is being stored in Jacksonville and shipped more frequently to the island.
Cold Storage Solutions
On the West Coast, the Port of San Diego is looking at a redevelopment plan for its 10th Avenue Marine Terminal for three modes of cargo. The first phase, expected to be completed in 2019, is reefer cold storage to support its on-dock partner, San Diego Refrigerated Services (SDRS), which handles the Dole account.
“Dole is the anchor account for the refrigerated piece,” says Greg Borassay, the port’s Principal for Maritime Business Development, “primarily bananas from Central and South America – about 750 reefer containers a week.” The redevelopment includes making additional land available for Dole as well as more electrical plugs at the terminal to support new business.
In Freeport, Texas where reefer cargo makes up about 45 percent of the port’s container business, logistical issues can sometimes lead to schedule-juggling.
“Origin ports seem to have berthing congestion with several ocean carriers calling on the same days,” says Jason Miura, the port’s Director of Business & Economic Development. “This results in a narrow window for cargo to arrive and make the appropriate connection. Congestion at origin ports can lead to missed windows at destination ports, further disrupting vessel schedules.”
He adds that reefer container movements can be a problem that’s accentuated by the driver shortage: “It’s beneficial if a nonoperating reefer can be used for dry cargo. Essentially, empty reefer containers need to be returned to the terminal as soon as possible, but third-party logistics providers cannot always meet deadlines due to driver availability. Cargo weight limits also decrease with reefers, which can be a concern for shippers who move dry cargo in nonoperating reefers.”
Port Everglades is the site of a new project that includes temperature-controlled cargo and will make investment history at the port. Florida International Terminal (FIT) is opening a new, 32-acre containerized cargo terminal at the port with double the number of entry gates as well as new scales, heavy equipment, technology and stacking capacity. Improvements include, among other things, an appointment system with a VIP lane for refrigerated cargo and up to 350 new power plugs for reefer containers.
In FY 2018, FIT experienced 17 percent growth with approximately 226,000 TEUs. Perishable cargo accounted for about 15 percent of the total. – MarEx
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.