With the cold chain market set to explode, temperature-controlled fleets are looking to sophisticated new technologies that provide precision monitoring of perishable cargo.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Supply chain visibility is a crucial capability in the trucking sector, allowing fleet managers to track the precise location and condition of every vehicle as they hustle to meet strict delivery schedules while complying with a host of regulatory requirements, including driver hours-of-service caps. Nowhere is that more true than in the cold chain, where fleet managers must meet all those demands plus one more thing—keep their freight within precise temperature ranges at every step of the journey.
Meeting this challenge requires far more than simply bolting an air conditioner onto a refrigerated "reefer" truck and uploading a tracking app to the driver's smartphone. So in search of better ways to monitor freight temperatures in transit and provide real-time data to shippers, the industry is turning to new technologies such as sensors, the Internet of Things (IoT), fifth-generation (5G) wireless networking, and blockchain data sharing, experts say.
Cold chain fleet managers say those platforms could change the way temperature-controlled trucking is performed within the next five years. By providing improved environmental monitoring, track-and-trace capabilities, and supply chain visibility, these technologies could also help fleets keep up with exploding demand for temperature-controlled transport. The global cold chain market is projected to grow at a compound annual growth rate (CAGR) of 7.6% from 2018 to 2023, to reach a value of $293 billion by the end of that period, according to the Northbrook, Illinois-based research firm Markets and Markets Inc. The growth will be driven by the expansion of international trade in perishable foods, technological advancements in refrigerated storage and transport, government support for infrastructure development, and increased consumer demand for perishable foods in both grocery stores and online channels, the research firm says.
As volume ramps up, cold chain practitioners are seeking tools that provide more detailed visibility into what's happening in their supply chain, according to Greg Bryan, executive vice president of Lineage Logistics, a Novi, Michigan-based refrigerated warehousing and logistics company that operates more than 200 warehouses across the U.S. and manages more than $250 million of freight globally in its network.
In comparison with nonrefrigerated—or ambient—trucking fleets, temperature-controlled transportation offers added challenges, Bryan says. For example, operators are sometimes required to pre-cool a trailer before loading the goods inside.
"The temperature-controlled side of the business is more challenging, especially if you're making multiple stops, going from location A to B to C," Bryan says. "Let's say you stop at point B and open the trailer. Then warm air hits the load, so you need to make sure [the loading crew is] ready to move the product, because all you're doing is moving hot air into the trailer."
Adding more financial pressure, many businesses have instituted significant fines for cold chain products that are not delivered on time, charging as much as 3% to 4% of the invoice price. That penalty could be significant when you consider that high-value products like fish and seafood frequently generate load values of well over $100,000 per truck, Bryan says.
CURRENT TECHNOLOGY FALLS SHORT
Despite the need for precision, obtaining the required visibility can be a challenge for the fleets that typically serve the cold chain sector. The average-sized fleet in the temperature-controlled business consists of about 20 trucks, whereas fleets on the "dry" side can boast up to 200 trucks, Bryan says. In those smaller fleets, a driver's data visibility is often delivered through nothing more than a cellphone, as opposed to the sophisticated telematics systems used by larger fleets with greater resources.
Third-party logistics service providers (3PLs) that contract with those smaller fleets may have no choice but to rely on a driver to enter temperatures into a smartphone app at each stop, a dicey approach if drivers are traveling in areas with spotty cellphone coverage. As an alternative, shippers and retailers are increasingly doing the job themselves by attaching a physical temperature sensor to their pallets, he says. That device allows shippers to monitor the load's conditions throughout its journey, although it may not interact directly with a carrier's platform.
To close those gaps in data monitoring and information sharing, Lineage plans to launch an online portal this year that will give its customers greater visibility into shipments in transit. Still in development, the system would monitor temperature conditions and automatically send an alert if a load grows too warm, Bryan says.
Another new approach to boosting cold chain visibility entails improving the platforms that run on the handhelds or smartphones that often serve as a driver's only link to his fleet, according to Will Salter, president and CEO of Paragon Software Systems Plc, a U.K.-based routing and scheduling software vendor. Paragon now offers a workflow management product that runs on drivers' Android-based handhelds and allows them to receive instructions on deliveries, such as changes to times or locations. As each driver checks the temperatures on the truck—a single vehicle may have multiple sections spanning chilled, ambient, and frozen—he or she can record the data; the system will then automatically generate reports on when the driver reached delivery locations and dropped off loads.
IoT AND BLOCKCHAIN ENTER THE PICTURE
Whether they deploy temperature sensors or phone apps, companies can choose from an array of products designed to help keep tabs on temperature-sensitive cargo. A number of players in the market already provide cold chain monitoring equipment to measure temperature in transit or in storage, then communicate that information to trading partners.
But most of those systems fail to track shipments through the complete supply chain, including manufacturing, inventory storage, and distribution, according to Jai Suri, senior director, product management, IoT Cloud for the Redwood Shores, California-based enterprise software vendor Oracle Corp. Instead, they collect tracking information from separate sources, he explains. However, because the data from those disparate sources isn't connected, analyzing the root cause of "excursions"—or departures from set temperature limits—can take days or weeks, and the cost can run into the thousands of dollars, he says.
To address that challenge, Oracle's fleet management solution—which is part of the Oracle Transportation Management suite—creates a unified database from information gathered from a range of sources, such as sensor data from a moving vehicle, links to a vehicle's onboard computer known as its controller area network (CAN), sensors on the trailer, and tracking devices on pallets. The company then processes the data using a cloud-based Internet of Things (IoT) approach and applies "automatic anomaly detection models" to notify a transportation service provider that its shipment is at risk, Suri says.
Oracle has also developed an intelligent track-and-trace platform that uses blockchain technology to create a secure online "ledger" where trading partners can view each other's information, and is currently developing a specialized version of the product for cold chain users. That track-and-trace platform takes a broad-based view of the transportation process, covering activities beyond just the transportation leg that begins once the product has been loaded onto a truck.
"A lot happens before and after that too, and that's where we see a lot of excursions—during storage and dwell time, or in the staging area of the warehouse," Suri says. "You need to know how long [a load] has been left at each stage and was it temperature controlled, because a supply chain involves many different trading partners and the chain of custody can involve many sets of hands."
Combining an IoT approach with blockchain-based data sharing will allow platforms to collect data directly from sensors, eliminating the need for data entry by fallible humans. Fueled by that accurate information, users will be able to trace incidents back to the exact batch and avoid expensive recalls, he says.
That approach is rapidly become more affordable, thanks to technology such as lightning-fast 5G wireless networks that enable faster IoT systems and "edge analytics" hardware that processes data on the truck where it was gathered, instead of transmitting it to the cloud first.
Powered by those advances, cold chain transportation fleet management is on the verge of a leap forward in capabilities, experts agree. In the coming years, trucks delivering refrigerated cargo will be able to automatically communicate vital details to dispatchers and customers alike, allowing trading partners to prevent spoilage, preserve valuable goods, and avoid expensive recalls.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
Global trade will see a moderate rebound in 2025, likely growing by 3.6% in volume terms, helped by companies restocking and households renewing purchases of durable goods while reducing spending on services, according to a forecast from trade credit insurer Allianz Trade.
The end of the year for 2024 will also likely be supported by companies rushing to ship goods in anticipation of the higher tariffs likely to be imposed by the coming Trump administration, and other potential disruptions in the coming quarters, the report said.
However, that tailwind for global trade will likely shift to a headwind once the effects of a renewed but contained trade war are felt from the second half of 2025 and in full in 2026. As a result, Allianz Trade has throttled back its predictions, saying that global trade in volume will grow by 2.8% in 2025 (reduced by 0.2 percentage points vs. its previous forecast) and 2.3% in 2026 (reduced by 0.5 percentage points).
The same logic applies to Allianz Trade’s forecast for export prices in U.S. dollars, which the firm has now revised downward to predict growth reaching 2.3% in 2025 (reduced by 1.7 percentage points) and 4.1% in 2026 (reduced by 0.8 percentage points).
In the meantime, the rush to frontload imports into the U.S. is giving freight carriers an early Christmas present. According to Allianz Trade, data released last week showed Chinese exports rising by a robust 6.7% y/y in November. And imports of some consumer goods that have been threatened with a likely 25% tariff under the new Trump administration have outperformed even more, growing by nearly 20% y/y on average between July and September.