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December is traditionally a tricky period for the agro-logistics sector. Raw produce, such as cocoa beans, maize, potatoes, tomatoes, eggs, meat products, fruit, wheat sunflower, soya beans and peanuts, are all in high demand.
As companies see this spike in demand, they often race to deliver perishable goods within tough timelines so families around the world can enjoy a meal together as part of their annual celebrations.
Few people are likely to give a second thought to the sophisticated and sensitive supply chains required to ensure the efficient delivery of such sensitive goods. But a smooth-running supply chain is only possible if due consideration has been given to each stage of the journey.
For agricultural goods, this typical journey involves three stages. Goods leave farms and are routed to intermediate warehouses. From these warehouses, they typically move on to transformation plants where they are sorted, before being relocated again towards the end clients.
The complexity of the operation is clear when you analyse the considerations of each stage. For example, when goods leave transformation plants for the end client, companies must consider the best markets to fulfil 100% of demand. They also need to think about whether additional logistics planning will be necessary to meet spikes in orders.
To resolve these challenges and many others besides, DP World turns to technology. We believe that advances in technology are key in enabling trade – particularly in the agro-logistics sector. And, while technology allows our customers to trade smarter and faster, it also affords greater oversights in the form of data.
These data sets span everything from agronomy to the weather and offer product-specific insights as well as information on broader relevant themes such as market price volatility.
According to a study by consulting group McKinsey, companies are increasingly using these data sets to run simulations of how distribution scenarios may play out. This is helping to draw up more accurate cost models and recognise areas for potential savings.
The ongoing evolution of the food value chain
The food value chain has evolved considerably in recent years. Today, we see a far greater number of farms and food industries. We have seen wholesalers consolidate, leaving the remaining operators much larger, on average, than they were a decade ago.
At the same time, the market has seen integrated supply chains become more sophisticated, enabling the seamless link between producers and other stakeholders. This change has been crucial in meeting the needs of today’s consumer, who seeks fresh, palatable, nutritious and safe food, delivered in a timely manner.
It is only through a thoroughly modern logistics operation that the needs of producers, retailers and consumers can be met. To build these modern operations, DP World works with a host of industry partners to recognise potential areas for innovation and further refinement.
After all, there remain many constraints in the agri-food chain that demand further development and modernization in the years ahead.
There will always be challenges when it comes to moving cargo. There is the potential for unpredictable road and traffic conditions, considerations relating to climate change, and the spectre
of queues at certain delivery points along every route.
DP World believes that the introduction of greener and more sustainable transport solutions will help to address some of these issues, as will the development of its modern cold chain and refrigerated storage solutions, which minimum waste and maximise profitability.
All of these solutions are part of a much bigger issue -- and one the planet has so far failed to resolve.
In 2014, Sharad Pawar, the then agriculture minister of India, stressed the need for innovation in the sector. In an address to parliament, he warned that food worth some $8.3 billion was being wasted every year, which equated to around 40% of the total value of annual production at the time.
But the issue is not unique to India. In 2020, the United Nations warned that some 14 per cent of food produced globally is lost between when it is harvested and the point of sale. With regards to fruit and vegetables, specifically, this can be in excess of 20 per cent.
So, this year, as you sit down with your loved ones for a celebratory meal, perhaps give a thought to the work and effort that has gone into putting the food on the table, and think about how we can further develop and refine the processes involved to prevent waste in the future.