Chain of events: a blog of Food Chain Intelligence

Stuart St Clair is the CEO of the Australian Trucking Association (ATA). His address at the National Press Club today provided some interesting information about the trucking industry.

For example, Mr. St Clair mentioned that nearly 3/4 of Australian domestic freight (including the items that we buy in our nearest supermarket) is transported by road and that 50% of the kilometers travelled by freight trucks occur within capital cities.

I believe Mr. St Clair because I see this fact every time I go to my local Woolworth’s, where trucks maneuvering to park in the delivery area block the entire access to the supermarket’s parking lot.

The entire car park goes into a standstill until the truck achieves the almost impossible task of parking in a single space that looks smaller than the truck and it is placed in a corner. The truck then delivers a range of goods that sit in a tiny dock, thus slowing unloading activities.

After that truck, there is always another waiting its turn, so that congestion is a usual sight in that shop. I am sure this scene is repeated in several supermarkets across Sydney, Melbourne, Brisbane and other major cities.

I have always imagined a system where deliveries to shops located in busy urban settings are done by vans, as opposed to 40 foot trucks. But of course, we have another problem that was raised by a representative of the Transport Workers Union: trucks are often seen as mobile warehouses, where product can sit up to 24 hrs waiting in distribution centres, before being delivered.

I can think of several reasons why this seems like a good idea for the DC owners: (a) it is a good way to decrease the need for storage volume, thus lowering inventories and costs associated. (b) in busy times and for refrigerated loads, trucks do become an extension of refrigerated warehouses so products don’t sit on the dock unrefrigerated for several hours. Although this is good for the DC owners, these costs are absorbed by the truck operators.

Therefore, the news about Kenwood trucks now spending between 20 and 25% less diesel are welcomed, particularly by food supply chain operators. My rough calculations in the April 2008 ‘Chain of Thought’ newsletter indicated that food transport in Australia accounted for 5.7 megatonnes of CO2 equivalents in 2007, excluding the use of diesel for refrigeration purposes. The ATA estimates that in 2005, net greenhouse gas emissions from trucks totalled 14.4 mega tonnes of CO2 -e. So food transport represents about 40% of the total GHG emissions from road freight.

There are about 17,000 refrigerated trucks circulating in Australia. Diesel used for refrigeration from these trucks contributes with about 0.5 megatonnes of CO2 –e, bringing the estimate for food transportation to 6.2 megatonnes of CO2 –e. To add some context to this number, this amount is the equivalent of approximately 1.4 million cars circulating in Australian roads each year. So, any technology that brings this number down and that is reasonably priced is great news.

Clearly, rail will not replace road transport in urban settings. In fact, rail can’t really fulfill the Australian interstate freight demands in most cases. This problem was illustrated by Mr. St Clair when he stated that there is no rail freight system that connects the Gold Coast to either Brisbane or Sydney (rail infrastructure is for passenger transport only). Therefore, intermodal systems would require a significant spending to bring infrastructure up to a point where rail or ports can accommodate larger domestic trade rates. Innovation in truck systems for both unrefrigerated and refrigerated cargo may be a simpler and less expensive solution.

Reduction of diesel for cooling purposes could be achieved by: (a) more efficient insulation (e.g. vacuum panels); (b) refrigeration transport systems powered by cleaner energy alternatives than diesel (e.g. solar panels, electric, CO2 cycles); (c) increased insulation thickness. The latter may be the push needed to change current Australian road legislation that limits truck’s width to 2.5 m, as opposed to the 2.6 m width limit used in Europe, Canada and the U.S.

The International Institute of Refrigeration released a paper discussing the role of refrigeration in food safety and security.The statistics presented are of interest to all those concerned about food security. Given the nature of statistics, different sources present slightly different estimates. For example:

-The world’s population is currently 6.77 billion people. The IIR paper says that by 2050 the world’s population is likely to reach 9.15 billion, but other reputable sources indicate that the population may be as low as 7.4 billion or as high as 10.6 billion, with the average being 8.9 billion.

-According to FAO, one sixth of the world’s population (or about 1 billion) is currently undernourished. The IIR paper presents a slightly more optimistic view. In either case, we are already late to reach the goal of reducing by half the number of undernourished people by2015,set in the World Food Summit in 1996.

-Food losses are estimated to range from 10 to 28% worldwide. In particular, losses of fruit and vegetables are placed between 15% and 40%. However, an ACIAR project on shelf-life extension for leafy greens in China measured losses for these products, showing that in some cases losses can exceed 50%. The extent of losses was mostly related to transportation distances from farm to market, seasonality, handling and storage practices.

The consumer link is not tackled in the IIR paper. Yet, losses in the consumer side are likely to be much higher than those occurring during the commercial supply chain. For example, available Australian figures suggest that food wastage at households ranges between 20-25%, mainly due to poor purchasing and storage practices (Hamilton, C., Denniss, R., and Baker, D. Wasteful consumption in Australia. Discussion Paper Number 77. March 05. The Australia Institute). In comparison, average losses from farm to retail in developing countries are about 10%.

The IIR figures indicate that about 360 million tonnes of food are lost annually due to insufficient refrigeration worldwide. It is tempting to assume that this is a problem in developing countries only. However, the refrigerated capacity in Australia seems to be insufficient to cater for primary producers in some regions. Lack of precooling facilities was an issue raised in the study: Northern Territory Tropical Fruits Industry –Market Opportunities (Hudson Howells report to RIRDC, July 2004). Similarly, shortages of refrigeration trucks in peak harvest season have been reported in recent years.

The IIR makes a strong point: food security requires a holistic solution encompassing the production of foods and the reduction of post-harvest losses across the supply chain, right through to the consumer. Gone are the days where food security meant increasing production and ignoring the distribution and use of foods.

The entire IIR paper can be found here.