It’s 3:00 a.m. Do you know where your trailer of strawberries is?

While knowing its location may not be crucial, you would undoubtedly feel better if you were assured that after eight hours in transit, it’s refrigerated to the right temperature and on schedule for delivery. Of course, you rarely give these things a thought, unless something goes wrong. Then, you want to know everything about your shipment and who’s to blame.

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Today, equipment and software are available to provide complete environmental monitoring, tracking and route information on a shipment, more than what the FSMA Proposed Rule on Sanitary Transportation of Human and Animal Food requires.

With the new FSMA regulations, such as this rule (which becomes final by the end of March 2016), and evolving technology, questions arise. Who is responsible for tracking your shipment once you hand it off to the freight carrier? What if it’s handed off to more than one carrier or distributor? What are the legal ramifications of liability and risk to each party in the supply chain, and how does the existence of tracking equipment potentially affect liabilities and risks? Should you be tracking the load to its final destination?

Food & beverage cargo: Big market and big theft opportunities

According to a recent MarketsandMarkets study, the global refrigerated transport market is projected to reach $93.66 billion by 2019, reflecting a compound annual growth rate of 15.2 percent from 2014. In 2013, the North American region was the largest refrigerated transport market, though Asia-Pacific was identified as the fastest-growing market. FreightWatch International reports that, in the second quarter of 2015, food and drinks continues to be the most stolen product type (16 percent of total cargo thefts in the US); just-released third quarter stats report the figure has grown to 22 percent, plus another 3 percent for alcoholic beverages. In some years, food and beverage has represented as much as 30 percent of all cargo thefts.

Keeping food safe to eat

Everyone in the supply chain is responsible for safe food—from the farm and/or ingredient supplier to the food or beverage processor through carriers and distribution centers and to the retail outlet where a consumer makes the final purchase. “But, the brand owner has the most at stake, if the quality of the food is compromised,” says Don Hsieh, director of commercial industrial marketing, Tyco Integrated Security. “The Food Safety Modernization Act requires all domestic and foreign facilities that manufacture, process, pack or hold food for human or animal consumption in the US to implement preventive controls to protect against both intentional and unintentional adulteration of food—across the supply chain—including imports, processing and transportation.”

“This is a chain-of-custody issue,” says Pradeep Bhanot, PINC Solutions director of marketing. “The brand risks its reputation on the quality of its product, but as goods navigate the supply chain, different trading partners, including 3PLs [third-party logistics] and carriers, share that responsibility.”

Today’s software tools can make it easier to dispense vital information. “Supply chain visibility solutions should provide access to all stakeholders to deliver transparency and foster communication,” adds Bhanot.

“Depending on the products and the nature of the supply chain, the tracking may be done by any of the parties involved,” offers Robert Taylor, CEO and founder of RLT & Associates. “The issues of tracking include: who is responsible for it; who has access to the information; and how to resolve conflicts and inconsistencies in the information.”

Unfortunately, FSMA rules don’t paint a clear picture of who’s ultimately responsible for food safety, should careless handling/transporting or theft occur. But, they do clearly state that records must be kept, and freight carriers must be notified in writing of a food processor’s requirements for handling its product. “Although the new FSMA rules are very important, and compliance with them is necessary, they’re not the only thing to think about,” says Brandon W. Neuschafer, partner and food safety attorney at Bryan Cave, St. Louis. “Manufacturers are always concerned about what happens with product after it leaves their possession. They certainly have to know to whom they’re distributing the product—the next person in the chain.” To the extent a processor can, it should understand the entire supply chain to know where there might be risks. “That’s not always possible, and it requires a whole lot of information and tracking, particularly when you get into the multiple steps of the distribution process,” concludes Neuschafer.

“In our experience, no one has really taken responsibility for tracking this data or recording it,” says Joseph Moore, national sales director, National Fleet Tracking, which provides a standalone, web-based tracking system. “We have a wide customer base of shippers, processors, wholesalers and retailers that all want the information for themselves, but put the blame or responsibility on other parties.”

National’s solutions and real-time information are intended to strengthen the supply chain and guarantee customers freshness, traceability and peace of mind. “We are in this business to help protect brands and find solutions or accountability when necessary,” adds Moore.

This is a chicken-and-egg scenario, says Mike Maris, Zebra Technologies senior director, transportation and logistics. “From an insurance standpoint, the manufacturer/shipper is responsible for getting the product to the assigned point of delivery in the proper condition. The shipper must ensure the load is transported according to the manufacturer’s specifications.”

In fact, “the manufacturer’s specifications” must be in writing and presented to the shipper, according to the FSMA’s Sanitary Transportation rule. “To some extent, the liability issues may change because of the introduction of FSMA, which changes legal standards,” says Bryan Cave’s Neuschafer. “But, any company in the chain of manufacturing/distribution really needs to consider several factors: What are other companies doing? Have I done my due diligence? Do I have the right contracts in place to protect me? Am I passing along the right instructions and directions and all the information to ensure this food remains safe throughout the process?”

“FSMA focuses more on preventing food safety problems, rather than relying primarily on reacting to problems after they occur,” explains Randy Fields, CEO of Park City Group/ReposiTrak. “It will have a direct impact on manufacturing facilities, central kitchens, distribution centers, food imports and even transportation, requiring all segments of the supply chain to know where product is coming from and going to. So, food safety is everyone’s responsibility.”

The CHEP-TRAC system provides monitoring solutions for supply chain members. “We currently work with three models for the product: processor only, end-user only and complete/full supply chain responsibility,” says Keith Schall, CHEP director, IT. The CHEP-TRAC system is designed to allow single or multiple tracking points for shipping or receiving full or empty assets. If at any point in the supply chain a quality issue related to the product expiration date, temperature or PO number is identified, the system immediately notifies the appropriate contacts and implements the proper recall or rejection processes. With regard to food safety, this same information can be used to identify historical records for every place the product has been sent and used.

Start at the processor’s dock

While the theft of an entire load can happen (via a fictitious pickup) at the loading dock, disappearing product is often more a case of human error. For example, a processor’s employee accidentally loads the wrong pallet onto a truck, or a driver mistakenly loads the wrong pallet, because the processor’s shipping personnel are simply too busy.

In these situations, establishing liability can be tricky, says Neuschafer. Sometimes, it might be necessary to recreate the scene or do forensic work to understand where the error occurred. Inventory losses at the loading dock can be minimized with software that assigns responsibility at each segment of a transfer, according to RLT’s Taylor. “To prevent theft proactively, we suggest logging shipments in and out. This will indicate who is loading the products and who is signing in when they arrive at the destination. Further, the carrier’s records must be checked and double-checked, and the names of whoever had a role in the entire process must be logged in and accounted for.”

Technology certainly offers many solutions to prevent problems. “Years ago, we didn’t have this technology available, or if we did, it was incredibly expensive,” says Neuschafer. “So, it was not considered the proper standard of care or a baseline standard of care. But now, relatively cheap devices are available to provide real-time data you can track with software, and the legal question is: Does that become the new standard of care? The answer is not clear. The courts are sorting through issues like this right now.”

Critical tracking events and key data elements

“One of the primary challenges organizations will face is having the ability to compare and contrast their actual levels of product quality with mandated, regulatory minimum levels of safety and corporately defined product excellence objectives,” predicts Jason Dea, Intelex director of product marketing. “With the ever-changing and increasingly complex regulatory environment, it’s critical for manufacturers and processors to leverage purpose-built databases and data management systems to track all the elements that contribute to product quality. Comprehensive, easily accessible data can help not only with regulatory compliance reporting, it also can provide a level of ongoing visibility to help ensure food safety.”

FSMA’s Sanitary Transportation Rule

The FSMA Sanitary Transportation of Human and Animal Food Rule will become final on or before March 31, 2016. The proposed rule requires shippers, motor or rail vehicle carriers and other persons engaged in the transportation of food to use sanitary transportation practices to ensure the food is not transported under conditions that may render it adulterated.

It’s important to note that food can be potentially adulterated as a result of cargo theft which, in this case, would be covered by the FSMA Proposed Rule for Focused Mitigation Strategies to Protect Food Against Intentional Adulteration.

Regardless of which rule applies, it’s incumbent on processors, their carriers and distribution networks to know where shipments are at all times; that susceptible food is being handled, transported and stored under correct conditions; and that it has not fallen into the hands of individuals unconcerned about food safety.

Although instances of food contamination during transit are rare, the sanitary transportation rule attempts to ensure transportation practices do not create food safety risks. The rule builds on current safe food transport practices and is focused on ensuring food at the greatest risk during transportation (e.g., produce and fruit) is handled appropriately.

The rule applies to and establishes requirements for vehicles and transportation equipment, transportation operations, training, records and waivers. It allows the transportation industry to continue using best practices concerning the cleaning, inspection, maintenance, loading and unloading, and operation of vehicles and transportation equipment.

The rule includes the following:

  • Shippers must inspect a vehicle for cleanliness prior to loading food that is not entirely enclosed by its container.
  • Time/temperature control, including precooling of vehicles prior to loading, must be used for sensitive foods requiring refrigeration.
  • Shippers must specify in writing the sanitary requirements for transporting food under controlled conditions; shippers must maintain records to demonstrate carriers were informed of these requirements.
  • Carriers must be able to demonstrate to shippers and, upon request, receivers that temperature control was maintained during transportation.
  • Carriers must convey information regarding previous use of their vehicles and the intervening cleaning of these vehicles.
  • Carriers must keep records specifying practices for cleaning, sanitizing and inspecting vehicles and transportation equipment.
  • Carriers must establish training for personnel responsible for any aspect of food transportation.
  • Shippers, receivers and carriers engaged in transportation operations with less than $500,000 in sales are exempt from this rule.

Tracking information that should go into a database consists of critical tracking events (CTEs) and key data elements (KDEs). All data should be stored in a transportation management system (TMS), which typically ties into an ERP system. Usually, each CTE contains one or more KDEs. For example, a CTE may be the recording of all KDEs as a product leaves a shipper’s dock. According to RLT’s Rob Taylor, KDEs can include any or all of the following data: the product pack date, shipping date, destination, name(s) of employee(s) processing the shipment, arrival date/time at location, freight company/truck number and temperature data.

CHEP’s Schall lists more KDEs: daily container activity; dwell time (cycle); inventory summary and details; item history; theft, loss, damages and repairs; product data; production data; temperature; weight; user/operator; and PO/batch number.

The technology to monitor KDEs en route

A cloud-based, critical condition monitoring service with wireless sensors can remotely monitor temperature and humidity in facilities, while automatically logging data and providing alerts, says Tyco’s Hsieh. “Plus, cellular-based wireless sensors can extend the cold chain monitoring into the supply chain. Ultimately, a critical condition monitoring solution minimizes the risk of lost or damaged perishable inventory and provides real-time data and alarm notification anytime, anywhere.”

“Our standalone, cloud-based, reusable assets tracking and management system integrates with an enterprise’s MES or ERP systems,” says RLT’s Taylor. “The software tracks the location and liability of containers, allowing our clients to readily locate their assets using our map-based dashboard. The shipment module clearly records the transaction parties involved, including product producers, retail stores, transport companies, 3PLs, depots, etc.”

A supplier of data collection hardware (mobile computers, barcode scanners, RFID and wireless LANs), Zebra Technologies offers a basic infrastructure that provides a conduit for food safety in the supply chain, says Maris. “Zatar is a tool set that provides Internet of Things [IoT] capabilities and works in conjunction with mobile computers, printers and other sensory devices used by food and beverage companies. In addition, Zebra works with various suppliers to create what we refer to as a ‘Smart Trailer’ or ‘Smart Supply Chain’ that uses a combination of sensors, including passive, semi-active and active RFID tags.”

Processors participating in the CHEP Full Service Trip program can take advantage of its container rental, which provides several food safety measures, including sanitary liners, cleaning and sanitization after each trip. For all processors, whether they use CHEP containers or their own, the CHEP-TRAC asset tracking suite provides beneficial data insights related to food safety tracking, says Schall. As containers move through the supply chain, container identification and event status are captured in the CHEP-TRAC shipping container database. Customers, plants and suppliers can use any computer or mobile device with an Internet connection to access a variety of container tracking tools and reporting, including inventories, activity, histories, dwell time, damages/repairs and content (product information).

“ReposiTrak tracks data from existing documents, where scan data does not exist, such as ASN, delivery receipts, invoices, bills of lading, etc.,” says Park City Group/ReposiTrak’s Randy Fields. “It combines this data with scan label data, where possible, for increased accuracy. Relevant data [such as product name, identifier, from/to locations, date of shipment, quantity shipped and used or sold] is pulled each time a product moves to a new location in the supply chain to provide visibility to its path.”

“Knowing where product is at all times is a must nowadays,” says National Fleet Tracking’s Moore. “We have the technology and ability to track not only location, but routes, weather, traffic, temperature and humidity during transit to ensure product quality. The key question is: Why aren’t more people taking advantage of it now and becoming pioneers leading the way?”

How to reduce cargo theft

Cargo theft occurs in many ways. “I have seen situations where the back doors are disassembled; merchandise is removed; and the doors are replaced,” says Zebra’s Maris. “Holes can be cut in the roof of a trailer, and product is taken out. Sensors on the merchandise that can detect light [opening of doors], vibration [cutting open the trailer], temperature, etc. are the up-and-coming ways to protect and ensure safe delivery.”

“The most common theft occurs when trailers are dropped at locations and left unmonitored,” says National Fleet Tracking’s Moore. “With our technology, you can set a digital perimeter around the asset’s location, and you will be notified of any unplanned activity. We have saved hundreds of thousands of dollars in recovered product and assets in the past year alone.”

A yard management system (YMS) can help curb thefts in yard locations. “The YMS [PINC Solutions offers] can direct drivers to trailers and, using RFID or OCR readers, check which tractor ID pulled which trailer ID when they exited the facility,” says Bhanot. Seal integrity ROM (read-only memory) from dock door to dock door, RFID tagging of goods and video surveillance also provide some measure of security in this open environment, adds Bhanot.

“Cargo tracking should not stop with just temperature monitoring; it should encompass supply chain security, as well,” advises Tyco’s Hsieh. Identity management solutions can help deter fraudulent pickups by authenticating drivers’ licenses.”

In addition, a comprehensive fleet management solution with location sensors and an onboard control system can detect trucks that are off-route and remotely shut them down to prevent cargo theft. An additional layer of security can be applied with trailer-locking solutions that ensure the trailer itself can be locked and secured with a GPS. With these solutions, authorized administrators can lock or unlock a trailer remotely, and event notifications can be automatically sent to designated personnel when its doors are opened and closed.

Theft prevention is an area where data can play a key role, according to Intelex’s Dea. “While data will never stop any theft in progress, it can sometimes help mitigate the risk of thefts occurring.” Data, plus records of shipping companies, transport companies and their employees, can provide a data-driven window into how to mitigate the risk of theft occurring at the planning stage, says Dea.

Today, data can be very specific and easily extends its usefulness via mobile applications. For instance, with the CHEP-TRAC system, each food/beverage asset is individually serialized with a four-in-one tag, and every movement between supply chain points is tracked, says Schall. Also, with the recent addition of the CHEP containers mobile application, processors, suppliers, end-users and freight carriers can simplify day-to-day operations.

The mobile app provides real-time GPS locations of shipments using peer-to-peer technology. Plus, the software allows quick access and insight into container orders and movements, as well order history, shipping and receiving, tracking and online ordering.

Finally, for some yards, inefficiency may be a greater issue than theft. For example, when one chicken and meat producer grew tired of not knowing where specific trailers were at any given time, it realized it needed a real-time status of inventory and sought out a YMS. The producer also wanted to know how efficient its yard drivers were and how it could avoid costly mistakes in the yard. It installed 4SIGHT yard management software from 4SIGHT Logistics Solutions, which solved these problems and eliminated radio chatter to figure out which driver had the next move. The producer realized a 90 percent reduction in yard inventory, a 25 percent decrease in yard tractors needed, and an increase of hooks per hour (HPH)—from 4.5 to 6.5.
 

For more information:

Don Hsieh, Tyco Integrated Security, 800-701-8449,
dhsieh@tyco.com, www.tycois.com

Pradeep Bhanot, PINC Solutions, 510-474-7519,
pbhanot@pincsolutions.com, www.pincsolutions.com

Brandon W. Neuschafer, Bryan Cave, 314-259-2317,
bwneuschafer@bryancave.com, www.bryancave.com

Randy Fields, Park City Group/ReposiTrak, 435-645-2205,
randy@parkcitygroup.com, www.repositrak.com

Keith Schall, CHEP, 888-873-2277,
keith.schall@chep.com, www.chep.com

Joseph Moore, National Fleet Tracking, 855-438-4771,
jmoore@nftgps.com, www.nationalfleettracking.com

Robert Taylor, RLT & Associates, 844-758-7225,
robert.taylor@rltandassociates.com, www.rltandassociates.com

Mike Maris, Zebra Technologies, 847-634-6700,
ccraig@zebra.com, www.zebra.com

Jason Dea, Intelex, 416-599-6009,
jason.dea@intelex.com, www.intelex.com
 

Resources:

“FSMA Proposed Rule on Sanitary Transportation of Human and Animal Food,” http://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm383763.htm.

“Pilot Projects for Improving Product Tracing along the Food Supply System—Final Report,” Institute of Food Technologists, Chicago, IL, August 2012.