ANALYSIS: Food logistics in the Middle East
Of the more than ten million tonnes of food mobilised within the UAE each year, including imports and local production, it is thought about 3.27 million tonnes is wasted. This is enough food to fill 136,250 trucks.
And if a truck load of food could be worth, on average, AED 100,000 ($27,225), the annual cost of food waste in the UAE is a staggering AED 13.6 billion ($3.7bn).
“The figures speak for themselves and highlight the need for the industry to look at responsibly reducing food waste throughout the supply chain process,” says Brent Melvin, general manager of supply chain solutions, Massar Solutions, the company that crunched the numbers to highlight the need to eliminate chinks in the supply chain.
“Although some element of waste cannot be prevented, reducing its scale will deliver significant economic, social and environmental benefits. F&B fleet operators play a critical role here, just as much as production and distribution companies,” he continues, adding that there is an urgent need to increase the level of efficiency of F&B fleets and logistics operations.
Using technology to ensure the quality of food is maintained throughout the supply chain would help and Melvin says about 5% of food loss can be reduced through intelligent logistics, which covers real-time checks and driver training.
Massar Solutions, a vehicle rental, fleet management and supply chain services provider based in Abu Dhabi, works with clients operating in the UAE’s industrial and commercial sectors. Melvin, who joined Massar in October 2014 and is a veteran of the logistics industry having worked in transport for some 26 years, is clearly passionate about efficient supply chain management.
“Every aspect of logistics is different; it’s like having a huge jigsaw puzzle where all the pieces are the same but how they fit together is always different, which is what I like about it,” he shares.
“One customer’s needs will be different to another customer’s and you have to look at all the different subtle aspects involved. I enjoy fact finding, building up the solution, presenting the options and optimisation; we are able to highlight opportunities for improvements to companies. And supply chain being so vast is what makes it exciting,” he adds.
Massar Solutions moved into supply chain after securing an account that was operating in excess of 200 trucks and streamlining its set-up so that now Massar operates about 130 trucks for the client yet gets 20% more product onto shelves.
“Logistics is always about maximising your asset utilisation so you minimise your cost,” Melvin says.
“That is done through a process of control, planning, correct routing, and management of drivers. For the customer, there is a massive financial gain,” he adds.
Massar owns almost 10,000 vehicles and manages nearly 7,000 more, belonging to customers across the UAE.
“We are more into the food side of the business for distribution and supply chain than anywhere else right now and we also offer warehousing space for +18 degrees and +5 degrees (ambient and chilled). Right now, we are following customer requirement,” Melvin reports.
Elaborating, he tells Logistics Middle East there is a shift happening in the food logistics market at present.
“What we have seen in the past was very little consistent cold chain integrity because manufacturers of food stuffs would tend to buy their own vehicles, and you have to ask, are you a transporter or a food producer?
“Increasingly now we’re seeing customers wanting to move their fleets off their balance sheets to focus on their core business of producing food.
“That means there is an opportunity; however to fulfil that opportunity you have to have capital because vehicles are not inexpensive. A reefer truck, which is refrigerated to carry freight at specific temperatures, is a massive investment.”
Owing to this shift in customer needs, Massar has been able to step in and support the regional cold chain.
Melvin explains: “We come along and say we will buy your existing fleet, replace it with new trucks, manage those new trucks for you and make sure your cold chain integrity is maintained.
“We are seeing a paradigm shift towards this thinking, so from that perspective we foresee a more requirements in the near future.”
Based on customer demand, Massar is beginning cross border operations but Melvin notes it is “competing in a difficult space” because its offering is slightly more expensive than the market offering.
Explaing what he means by this, he comments: “You can go to the fruit and vegetable market in Dubai, find half a dozen empty trucks waiting to drive a truck load of stuff across the GCC, and negotiate with a driver one-on-one. This is all good and well if you’re willing to trust the driver to, first of all, actually deliver your product and, second, not to switch off his reefer engine.
“The cost of diesel here is not that cheap when you consider what these trucks consume and some drivers have the behaviour quite often of switching off the reefer [to save money].”
The outcome of this does not sound conducive to getting high-quality product onto shelves for people to cook at home or for getting safe produce to the region’s restaurants.
Melvin walks us through a common scenario: “The product is loaded at -18 degrees because when the driver arrives, the truck is cold and ready for loading. He then leaves the customer’s loading site and switches off the reefer engine, and drives for a number of hours.
“It’s an insulated trailer, so what happens is the -18 degrees gradually becomes -15, -14 or -13 before he switches on the reefer engine again; this is common practice and a known circumstance. He will then draw that temperature back down to -18 before switching the reefer off again, and so it goes on – this is the behaviour.
“Now, if you’re crossing into the GCC [starting in the UAE], you can expect a clearance period seldom shorter than 48 hours and, to get into Saudi, perhaps five days. And then you have to drive across Saudi if you’re going onto Kuwait, Qatar or Bahrain.
“So, let’s say it’s a five or six day journey to get to Dammam in Saudi – can you imagine your product going through the cycle of frozen, not so frozen, frozen again for five or six days? It could very well be compromised.
Continuing, he highlights why the integrity of the cold chain can also be jeopardised by the condition of the truck itself.
“Most of these vehicles are second hand, out of Europe, so the trailers are European spec, operating in this climate and the reefer engine has probably run its useful life – or fairly close to its useful life. The actual asset is compromised before you’ve even put cargo in it,” he asserts.
The challenge for the industry is making sure those trailers meet specification but, once again, there is reportedly some worrying behaviour regarding the management of these trailers.
Indeed, Melvin paints a concerning picture when some drivers take their trailers for registration in the UAE, which involved getting the quality of the reefer engine and the tyres checked.
“They open up the backdoor, check the reading, determine it is -18 or whatever it should be, and approve it – but you will notice that most of the trucks out of Europe registered here are registered in winter and as early as possible in the morning,” he reveals.
Melvin says it is typical for the reefer engine to be switched on overnight prior to registration, ready for arrival at 8am when the ambient external temperature is in the driver’s favour. It is at this stage that a vehicle receives its certification valid for the whole year.
“And if you need tyres, you can rent them for the day, so you put on some high quality tyres for testing and then afterwards you have your old tyres put back on,” he adds.
Clearly there is a need for more adequate regulation and monitoring, as if the produce being transported does end up being compromised, it puts the consumer at the end of the supply chain at risk.
“In the UAE, municipalities and government are very good at looking at restaurants, warehouses and handlers of food, but the actual transport section can be forgotten.
“For example, you’ll get a chilled container coming into port, moved to a warehouse, which has municipality approvals and gets audited on a regular basis to ensure it meets the prescribed conditions, then moved to a manufacturing site, which also has municipality approvals and is audited.
“From there the product is taken to stores or restaurants, which are all checked and audited too. But the transport is missed.
“We know from experience there are always food poisoning cases, often in summer, and the restauranteur is invariably in trouble because it happens to be the last link handling the product. I’m not saying there is no responsibility on his shoulders, but if there is no control throughout the supply chain then the investigation can only start and stop with the end user.”
Melvin believes it should be possible to track a product right the way along the cold chain to determine if a breach occurred at any point.
“Transport is an important link because these trucks operate with high external temperatures and -18 alleged temperature inside, with doors opening and closing during the journey. If you have no means of controlling that or no visibility, how do you know that product didn’t defrost at any point before delivery? How do you know it didn’t semi-defrost and was refrozen?” he reasons.
Massar Solutions is lobbying the authorities to bring about more control and Melvin says it is happy to participate from an industry perspective.
Addressing the level of awareness surrounding the potentially dangerous gaps discussed, Melvin identifies a need to educate the food logistics industry as a whole on correct protocols.
However, he notes: “Understandably, the industry is loath to change because invariably nobody wants to be regulated if they have been operating in the same way for years, when it also involves adding costs.But when you talk about food safety, is cost an issue? Lives do not have monetary value.”
Melvin also makes the point that there work to be done to improve and regulate the entire transport industry on wider matters than food safety and perishable cargo.
“If you have a driving licence in the UAE you are eligible to drive a light truck but there’s a big difference between a car and a light truck, the first of which is the sheer size of it. It’s wider, longer and your handling of it must be different. Then load it with cargo and the dynamics of your truck changes immensely,” he explains.
A typical four tonne truck could be carrying four tonnes of cargo and when a driver turns a corner, those extra tonnes will affect the vehicle.
“Speed comes into play, as does handling, and if your driver is not trained in how to handle cargo inside a truck, there’s a gap – and that’s before you even factor in the type of cargo, such as perishable, liquid or hazardous. This in itself adds another dimension.”
As yet, there is no mandatory requirement in the UAE for a delivery driver to have any form of education and, to do the job, all a person needs is the ability to drive, so the onus is on companies or the fleet management operators that handle transportation on their behalf, to send drivers for further training.
“We do it in an ongoing cycle as part of our commitment to the industry and long-term we will see the cost benefits; it means less wear and tear on the vehicle and a reduction in accidents,” Melvin reports.
Driver training is a frequently discussed topic in the logistics industry, especially as the region on the whole does not have the best track record when it comes to the number of serious crashes recorded each year, although the various governments are successfully working to reduce these statistics.
There will perhaps be a marked impact once the GCC railway network begins transporting freight.
The effect of the introduction of a regional railway on the road transportation sector also remains to be seen and Melvin says rail will have its place as another piece of the supply chain.
“It won’t remove trucks from the road because rail only operates on the physical railway, so you still have to get product from a site to rail,” he asserts.
In terms of the carriage of food, clearance processes ought to take place at a land border in a customs controlled area where the train can enter and the containers be offloaded for the clearance processes.
“We shouldn’t see any constraint; we should see an improvement in the current circumstance. There is a huge amount of pressure on the border due to the sheer number of trucks, so if rail can reduce the number of trucks at the border, and there’s a dynamic shift from truck to rail, the logistics industry will be streamlined.
"And it makes perfect sense that this should happen,” he concludes.