On March 5, an article ran in CNBC titled, ‘Retailers pay more to fly everything from bikes to hot tubs from China as U.S. port backup delays deliveries’. In any other year, that might have sounded like an April Fool’s Day joke headline. But not in 2021.

One quarter into the year and carriers are still mopping up the mess from 2020. Ports are clogged, rates are high, and transit time is way up. Then comes the Suez canal traffic jam. The market is distorted, and one of the ways that’s playing out is an unusual shift towards air freight.

We know how it usually goes. Airfreight is used for high-value, time-sensitive items, like pharmaceuticals. Ocean freight gets tapped for everything else.

But that was before an import surge, spurred by a global shutdown and reopening, coupled with a pandemic caused mayhem at ports around the world. Now, ocean transport times are climbing (some reports put it as high as 75 days, up from one month). Roughly 30 ships have been waiting outside of the San Pedro Bay since the start of the year (though the ports of LA and Long Beach are far from the only ones feeling the crunch.)

That just isn’t feasible for companies who are racing to get their products into consumers’ hands. A well-known example is Peloton - at the end of 2020, a ship carrying 197 containers of bikes spent twelve days waiting to dock. The company lost millions, blaming it on problems with the supply chain. Shipping delays are becoming more costly than some companies can bear.

Meanwhile, air cargo capacity is up while prices are falling. As Capt. Adil Ashiq, executive of MarineTraffic’s U.S. western region told CNBC, ‘The price of a 250-kilogram air shipment traveling from China to the U.S. has dropped from about 60% of the cost of a full container to around 36%.’

The situation puts decision-makers in an interesting position. Between shorter transit time, smaller price differentials, and added capacity, air freight is becoming a viable option for some shippers. Given a choice between waiting up to three months for a delivery or paying some extra, certain shippers are choosing the faster option.

'If you want to ship a hot tub via ocean from Shanghai to New York, that will cost you around $1,000 for the transportation for a lighter hot tub, but it will take a minimum of 35 to 45 days, Seko Logistics Chief Growth Officer Brian Bourke told CNBC. Bourke says that the same shipment via air could cost $2,000 or $3,000, depending on weight. ‘But it will only take you three to four days to get your hot tub,’ he explained. ‘[p]aying two to three times will save you four to seven weeks right now. Ultimately the math makes sense for certain shippers right now.’

This probably won’t last forever. Fuel prices may be rising, and eventually, it will be less profitable to fly. Port congestion will clear, and consumption patterns will return to normal. But until then, for shippers who need it, the math works out. Experts expect a certain portion of goods to keep going by airfreight moving forward as long as the industry can provide competitive rates, speed, and high service levels...

Guess how much food gets wasted in the United States every year. No really. We’ll wait.

80. Billion. Pounds.

That’s how much meat, produce, dairy, and grain gets thrown out each year. An RTS study on food waste in America has even more shocking facts and figures. Like how 219 pounds of food per person are thrown away in a year, totaling $161 billion. Or that food is the largest component of landfills and makes up 22% of municipal solid waste.

That’s a lot of food. And waste.

At the same time, 37 million Americans (including 11 million children) endured food insecurity last year. When more than a third of the food supply gets thrown away, and over ten percent of the population doesn’t have enough to eat, you know you’ve got a problem on your hands.

We hate hunger, so we did something about this. In 2020, Able Freight partnered with Food Finders to get produce to the people who need it. Through their Food Rescue Program, we donated 1,950 pounds of fresh meat and produce, and fed 1,625 people in our community. As a leading provider of perishables logistics, we are intimately involved in the details of storing and shipping food products. We store tons (literally, tons) of meat and fresh produce in our warehouses. So we have a front-row seat to the disconnect that leads to wasted food.

In 2019 the Food and Agricultural Organization of the United Nations found that up to 40% of food waste comes from something other than consumers. That’s right. Carriers and shippers have the power to cut food waste almost in half. What we see every day is boxes that can’t be accepted at grocery stores for reasons that don’t have to do with quality. Whole pallets of fresh produce that won’t make the cut-off, but are still safe to consume. Nothing against expiration standards, but we could not stand to see all of this go to waste. As cold chain providers, we have a responsibility to make sure that food ends up in stomachs, not landfills. It’s not one that we take lightly.

Legislators are doing their part to address the problem. Here in Los Angeles we have a Zero Food Waste Task Force which is tasked with finding opportunities to reduce food waste and increase recyclable resources. Other states have joined California in funding private sector composting.

But there’s a lot that private citizens can do too. We don’t have to just sit around waiting for someone else to handle this problem. Let’s take it on as a team. Some food for thought…

Remember back in December, when Covid vaccine distribution was first getting underway? Competing carriers joined together, like a truck-bound Santa Clause to deliver doses of the new drug to people who needed it desperately. Images of politicians getting inoculated flooded our newsfeeds. It provided a much-needed glimmer of hope at the end of a truly awful year.

Since then, excitement over vaccine delivery has ebbed. The news cycle marches on, and most of the public has long since stopped caring how items make it to their store shelves, front doors, or doctors' offices. It’s not that anyone has stopped relying on the vaccine to fix the bizarre situation we find ourselves in. It’s just that complex and sensitive freight services aren’t at the forefront of most people’s minds. Dry ice can only hold the world’s attention for so long. Vaccine distribution might be out of the spotlight (for now), but there’s an important new development in the works. Until now, one of the biggest obstacles has had to do with temperatures. Freezing temperatures, that is.

As of February, vaccines from Pfizer and Moderna have been approved by the CDC to inoculate against Covid-19. While Moderna’s jab can be stored at -20 degrees Celsius, the Pfizer inoculation originally had to be kept at -70 degrees Celsius. (That’s less than the lowest temperature on record at the Klinck research station in Greenland, for anyone keeping track at home.) Now, Pfizer has submitted new data to the FDA showing that its vaccine can be stored between -25 and -15 degrees Celsius. If approved, the ramifications could be huge.

Storing a shot at -70 degrees Celcius requires either a specialized freezer (one that is so cold that most hospitals don’t have it on hand) or careful packaging in dry ice. In August, a Pfizer scientist told the CDC that freezers containing Covid vaccines should not be opened more than twice per day, and should not stay open for more than a minute at a time. Relaxing these requirements would not only reduce costs but make the vaccine much more easily available in parts of the world that might not otherwise have access.

But why must the vaccines be kept in this frigid state to begin with, you ask? The reason has to do with their ingredients. The primary one is ‘nucleoside modified messenger RNA’ or mRNA. mRNA works by teaching our immune systems to fight off Covid-19 from the inside out. Once injected, it induces human cells to create a coronavirus protein. That protein then triggers an immune response, which we use to make antibodies. The antibodies are what staves off the virus, should we become infected down the road. This is great news, but there’s a catch. In addition to being medically useful, mRNA is also really delicate. Unless it is kept at temperatures that rival an Arctic winter, it will break down before ever reaching a patient’s arm.

This creates some particularly urgent challenges relative to most vaccines. While most pharmaceuticals require chilled freight services, not all need to be kept at a temperature this cold. Regular flu vaccines, for example, can be stored at around 2-8 degrees Celsius and can live in a refrigerator for months at a time. Now, if Covid vaccines can be stored in a more forgiving setting, it could save countless costs, man-hours, and lives around the globe. Amesh Adalja, at the Johns Hopkins Center for Health Security, says it best, telling Reuters that the higher temperatures would ‘greatly expand the ability to use this vaccine in many parts of the world (or even the U.S.) that do not have the capacity for deep freeze storage’.

In the meantime, cold chain logistics continues to save countless lives….

After taking a backseat for years, U.S. trade policy has made its way back into the spotlight. The Trump administration challenged previously held orthodoxy around liberalization, instead using tariffs and trade wars to try to balance trade deficits and expand manufacturing positions in the United States. Now, President Joe Biden will inherit an ‘America first’ policy with both positive and negative consequences. And those of us in the business of importing, exporting and handling the logistics are waiting to see what he’ll do with it.

So, new president, new trade policy? Maybe not. Instead, Team Biden’s actions suggest that his priority will be supporting labor domestically, not liberalizing trade. Less than one month into his first term, President Biden has made a few moves that suggest an approach surprisingly similar to his predecessor. Here are a few of them:

Made in America - One of Biden’s first executive orders following his election was a ‘Buy American’ provision, requiring the federal government to buy more domestically produced goods. The order also strengthens the definitions of American made products and makes it harder to issue waivers to buy certain products overseas.

China - Perhaps one of his more infamous policy decisions, President Trump initiated tariffs on more than $300 billion in Chinese imports in 2018. Despite having signed a ‘phase one’ deal at the beginning of 2020, a trade war between the two countries is still ongoing. As of publication, President Biden has chosen to leave tariffs on Chinese goods in place. Several of his nominees have also voiced support for a ‘tough’ stance on China.

Section 232 Tariffs – Such investigations are administered by the Department of Commerce to determine the impact of particular imports on national security. Historically, they have focused on oil and petroleum. In 2017, the Trump administration initiated Section 232 investigations around steel and aluminum, ultimately determining that imports of those products harm national security. President Biden is letting those investigation results stand, meaning that tariffs on certain aluminum and steel products will remain for the time being.

Nominees - President Biden’s nominees for Secretary of State and Commerce Department head have both vowed to take a tough stance on China (that doesn’t usually translate into trade liberalization!). And incoming US Trade Representative Katherine Tai recently told the National Foreign Trade Council that the Biden Administration aims to have a ‘work-centered trade policy. ‘U.S. trade policy must benefit regular Americans, communities, and workers. And that starts with recognizing that people are not just consumers. They are also workers and wage earners.’

World Trade Organization - This is one area where we probably will see a departure from the 45th administration’s approach. President Trump was openly critical of the WTO, and even brought the NGO’s appeals process to a halt by blocking judges in its Appellate Body. Now the United States will have to decide whether to cooperate with or abandon the WTO altogether. Analysts believe that President Biden will bring the United States back into the fold.

Sympathies are shifting away from free trade and globalization and towards Made in America (at least in the White House). Although a Biden presidency is less likely to antagonize traditional United States allies, the glory days of free trade could be coming to a middle - So stay tuned!

As we learn more about this at Able Freight, you’ll find out too. We are here to support you in navigating through the changes as well as making sure the logistics of your sensitive products is handled professionally and with the highest dedication and in-depth know-how in place!

Your Able Freight Team

sales@ablefreight.com

Follow us on Linkedin: https://www.linkedin.com/company/able-freight/

At the SpaceWaves virtual conference presented by FreightWaves on December 3, 2020, NASA called for the commercial logistics sector to help bring new ideas and innovation to their Artemis program. By 2024, NASA plans to bring the first woman and the next man to the moon and establish the Gateway outpost in the moon's orbit. This program would bring people to the moon to stay and facilitate future deep-space exploration. A manned Mars mission is in NASA's sights for the 2030s.

To reach these goals, NASA recognizes the need for the development of completely autonomous systems. Because of the distance of over 200,000 miles to the moon, any communication from earth would not occur in real-time but have a 2.5-second delay, making remote control operation a challenge. For Mars, the communication delay would be an insurmountable 40 minutes. Automated guidance systems must ensure that unmanned spacecraft can dock itself to the Gateway. Decision-making capabilities and machine-learning are necessary for every robotic system without an in-person operator.

Cargo packaging is another challenge, from basic supplies to large equipment. Rapid temperature changes and radiation are among the extreme conditions cargo faces on the days-long journey to the Gateway. The packaging solutions to these hurdles are limited by weight, volume, as well as the ability for the material to be repurposed or recycled later in the mission.

The uncharted logistics of deep space deliveries has prompted NASA to approach the commercial sector. There are complex questions that still need answers: how to plan given widely-spaced possible delivery windows, how to accommodate changing demand with such a large delivery time, and how to reduce costs and improve efficiency. Mark Wiese, manager of deep space logistics for the Gateway program, discussed how NASA plans to take existing technology used in the logistics sector today and "translate" it to their application of the supply chain in space.

“This is where specialist companies like Able Freight have an opportunity”, says Orlando Wong, CEO of Able Freight. “For 28 years our company manages cold chain air freight logistics for hundreds of business clients”. And continues: “While deep space presents new challenges at much lower temperatures, in our industry we already operate under strict requirements”.

Able Freight can bring ideas and innovation to NASA. Michael Kronenberg, CSO/CTO of Able Freight, confirms: “It's an exciting time to consider the possibilities of where technology and innovation can take us and how to collaborate with NASA bringing Able Freight’s perishable logistics experience into space!"

Unless you’ve been living under a rock, you’re probably aware of environmental waste. You know that it exists, and that it’s a problem. But the gravity of the issue may still come as a shock. According to one World Bank study, pollution accounts for 9 million premature deaths and $5.7 trillion every year (that’s 4.8% of global GDP!).

We all want clean air to breathe and water to drink, both for us and for future generations. The question is, how do we get there? And how should supply chain leaders address waste, while also keeping the world’s economy moving?

We may not have solar-powered airplanes or carbon-neutral trucks yet, but that doesn’t mean sitting on our hands and waiting for someone else to fix the problem for us. One way that executives are tackling pollution is by moving towards a circular economy.

If that phrase sounds unfamiliar, don’t worry. A circular economy simply refers to a system in which materials are kept in use, instead of thrown away. According to the Ellen McArthur Foundation, ‘A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.’ This is contrasted with a ‘linear economy’, the current default of harvesting resources and throwing away products at the end of their life.

Sustainability is not a new concept to us at Able Freight. We started a reusable foil initiative and our temperature tags can be used from the West Coast to Hawaii and back. Our reusable materials cut out physical waste and protect against temperature excursions. Efficiency improves on our end, and we pass those savings right along to our customers.

The shift towards a circular economy is going to create some interesting opportunities for perishables logistics. It will take a lot of new technology - think analytics, reusable devices within the Internet of Things (IoT), and machine learning. An emphasis on extending shelf life for as long as possible is going to require changes throughout the product’s life cycle. And a commitment to collaboration on a level not seen before.

Circularity will take a little while to achieve, no doubt. Even with many advances in place, we can’t overhaul the ‘take, make, waste’ model overnight. But with a little bit of elbow grease and a lot of teamwork, we can together make the planet a more sustainable place to live, maybe even sooner than we think.

There’s no better time than right now to leave a legacy in the cold chain. Let’s do it together.

- Your Able Freight team