Friday, June 25, 2021

Reinforcing & Stabilizing the Caribbean Cold Supply Chain

By on March 12, 2021

Jeff Vaughn, Chief Commercial Officer of Trailer Bridge

By Jeff Vaughn, Chief Commercial Officer of Trailer Bridge Inc.

The cold supply chain has long played a vital role in Caribbean shipping, but it will become even more important in the near and long-term future. The Caribbean and Latin America are committed to drastically reducing food loss by 2025 and the future distribution of a COVID-19 vaccine will need many well-coordinated cold storage points.

The Caribbean supply chain already faced its own unique threats: natural disaster and weather events, civil and labor unrest, cyberattacks, piracy, utility failures, terrorism, and other critical events among them. Then along came the COVID-19 pandemic to reveal major vulnerabilities in the global supply chain, disrupting the pharmaceuticals and PPE chains and threatening the food supply for millions of Caribbean residents. 

Increasing cold transport and ‘future-proofing’ as much as possible, with smart planning and built-in adaptability, are key to protecting the Caribbean cold supply chain going forward.

Temperature-Controlled Storage Will Be Key in Distributing COVID-19 Vaccine

Cold supply chain stability and reliability are essential for the successful deployment of COVID-19 vaccines. Some require storage at 2 to 8 degrees Celsius (26 to 46 Fahrenheit), and others require ultracold storage (-70 C / -94 F) and their own special carrying case. 

Keeping vaccines at constant cold or ultracold temperatures all the way from the factory to the patient requires an unbroken cold chain with refrigerated storage and transport, reliable electricity, roads in good condition, etc. The farther a vaccine travels, the more opportunity there is for loss. WHO estimates that as much as half of the world’s vaccines are lost because of damage such as heat exposure or broken vials. 

Countries are doing what they can. In developing nations where maintaining the cold chain will be very challenging, international organizations have supported the installation of tens of thousands of solar-powered vaccine refrigerators, for example. UNICEF now offers governments a checklist of supply chain requirements, but each country will have to design its own unique plan.

If a vaccine requires ultracold storage, there aren’t many medical freezers in the American and European hospitals that could accommodate it. In fact, many experts believe the West African countries may be more prepared for ultracold storage because they already have ultracold technology to house the vaccine against the recent Ebola virus.

Various transportation methods will have to be considered, as well. Container ships are not practical because they are not designed to maintain cold temperatures. Vaccines can be moved by air, but the cost is much higher. German logistics company DHL estimates it would take 15,000 cargo flights to provide vaccinations for the whole world. This would be a stretch for global air capacity, and perhaps for materials such as dry ice as well.

Once vaccines are delivered to a region, the next challenge is local storage. Almost 3 billion of the world’s 7.8 billion people live in developing countries where there isn’t adequate temperature-controlled storage for a full-scale immunization against COVID-19. Unfortunately, this means that the poorest people of the world will likely be living with the pandemic for a much longer time than the rest of the world.

Puerto Rico Plays a Critical Role in Reshoring & Caribbean Distribution Alike

Puerto Rico is a major producer of all manner of goods for mainland USA and it boasted the most competitive economy in Latin America up until these past few years. Some tend to think of the Puerto Rico supply chain in terms of the impact when shipping to the island is disrupted—after a hurricane, for example. However, Puerto Rico’s manufacturing sector is important for the country as a whole. In fact, it could play a critical role in reshoring manufacturing back from Asia and shortening supply lines for food and essential medical supplies in the Caribbean region and to the mainland United States.

 As my colleague John Wroby, COO at Trailer Bridge, recently wrote, Puerto Rico already produces 10% of the pharmaceuticals made in the US. That’s more than any other single location. “Previous tax breaks to corporations as a result of Section 936, an Internal Revenue Service tax code, enabled short-term job gains and economic growth for some time in Puerto Rico,” he said. “However, Section 936 failed to provide long-term fiscal stability, therefore there is not much appetite for reviving it.” 

Even so, 12 of the world’s top-grossing pharmaceutical brands have operations in Puerto Rico. As ‘Invest in Puerto Rico’ CEO Rodrick T. Miller wrote for Industry Week, “Added growth in this sector can be swift in Puerto Rico, as the island already has the demonstrated experience, infrastructure and workforce to perform. Puerto Rico presents one of the most turnkey options for pharmaceutical manufacturing and can be crucial for U.S. recovery efforts.”

In addition to investing in Puerto Rico’s transportation and logistics infrastructure, we should be looking to shore up cold warehousing and ensure open lanes for food-producing Caribbean islands, as well. Globally, a staggering $750 billion USD in food is lost to spoilage and waste per year. Latin America and the Caribbean only account for 9% percent of the global population, yet approximately $150B—20%—of that worldwide loss happens in the Caribbean and Latin America. The region has committed to reducing this food loss by half by the year 2025.

As the FAO Regional Office for Latin America and the Caribbean reports

“Causes of food loss and waste differ widely along the food supply chain. Important causes of on-farm losses include inadequate harvesting time, climatic conditions, practices applied at harvest and handling, and challenges in marketing produce. Significant losses are caused by inadequate storage conditions as well as decisions made at earlier stages of the supply chain, which predispose products to a shorter shelf life. Adequate cold storage, in particular, can be crucial to prevent quantitative and qualitative food losses.”

4 Factors for Strengthening & Stabilizing the Caribbean Cold Supply Chain

There are 4 key ways that we can work together to strengthen the Caribbean cold supply chain.

Investing in inspection

Eric Bierman, President of Cool Transport Jax, champions an uninterrupted supply chain with heightened inspection. His Jacksonville facility operates differently than some, in that there are 44 bay doors and no staging area. Truck drivers are guaranteed they’ll be in and out in under two hours, as they are able to back directly into cold storage at their assigned appointment time. Every step of the way loads are inspected, temperatures recorded, and damages or loss reported. Potentially problematic issues are caught in time to prevent major loss. It’s the same reason our company has invested heavily in satellite monitoring for reefer units; it’s best to have boots on the ground, but technology can pick up the slack at points in the cold supply chain where that high touch service isn’t possible.

Efficient trade logistics

We can better manage supply chain costs by maximizing shipping capacity. The size of shipping containers is a prime example. 53’ containers offer 37% more space, lower per-unit shipment cost, reduce the overall supply chain footprint, and shorten the time to deliver to the end-user, as compared to traditional 40’ units. Consolidation services and cold warehousing are key in keeping costs manageable while protecting the integrity of food supplies and medicine being distributed from one island to another.

Proactive planning and responsiveness

It’s important to have a skilled and experienced 3PL partner. An experienced 3PL has invaluable regional knowledge and network connections, a team of motivated employees, and a proven logistical strategy. This provides a proactive stance to reduce risk but also allows quick interventions when external forces threaten a load. 

Facilitating inter-island trade

This spring, 25 countries in Latin America and the Caribbean expressed their commitment to coordinating the supply of sufficient, safe, and nutritious food for the 620 million inhabitants of the region during the COVID-19 pandemic. The opening and maintaining of reefer lanes in the area are key to this commitment. 

Summary

Even prior to COVID and the need for that vaccine it was evident that we need to bolster the cold supply chain, to bridge the gaps where important foods and medicines are currently lost. We must be able to get that supplies—food, medications, vaccinations, and more—safely from Point A to Point B.

Strong relationships with a 3PL are vital in managing supply chain risks, costs, and performance. These relationships become even more important when major unexpected disruptions threaten your business, profits, and long-term success. Reinforcing the Caribbean cold supply chain requires that we are able to look critically at each mile, at every step in the path our goods take from one island to another. We must make sure we’re using technology intelligently, not to replace workers but to augment and enhance their performance.

Overall we need to work together to shorten supply chains, reduce transit time and distance, and perhaps prioritize future-proofing the supply chain over rock-bottom prices when we’re sourcing cold goods. It will require a collective shift in mindset; one in which we make an effort to fully understand the value of the Caribbean supply chain not only to the residents of the islands but to all of the people of the United States, as well.

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