Looking back pre-pandemic, it’s safe to say that the e-commerce food and retail delivery industry was growing at an impressive rate, with consumers ordering meals and groceries online for the sake of comfort and convenience through apps such as GrubHub, Uber Eats, and others. However, with consumers sheltering in place as a result of COVID-19 and generally spending more time at home amidst varying levels of lockdown restrictions around the world, it’s no surprise that the resulting effects on consumer buying habits have increased e-commerce by an incredible 44% in 2020, as highlighted in a recent report by Digital Commerce 360. It’s also no surprise that this placed a significant demand on the food and retail supply chain to keep up with the spike in consumer demand.
The numbers are quite telling from a commercial performance perspective, considering that in-store retail sales grew from $3.7 billion in 2019 to $4.04 billion in 2020, representing a 6.9% increase. At the same time, e-commerce sales jumped from $598 billion in 2019 to $861 billion in 2020, a staggering 44% increase that Digital Commerce 360’s report attributes directly to the pandemic.
Growth is a positive thing for the food and retail industry. The e-commerce effect of the pandemic has given organizations the ideal situation to embrace new and innovative ways of fulfilling the growing demand for online orders from more discerning consumers who expect high quality and safe goods in shorter times. However, this dramatic increase in the demand for e-commerce, specifically for food and groceries, has presented the food industry with specific and important challenges, from the health, safety, and well-being of essential workers in distribution centers and behind the wheel of the delivery vehicles delivering parcels and packages every minute of every day worldwide to the safe and sanitary transportation of temperature-sensitive grocery items and prepared meals.
The Last Mile
What does this increase in consumer demand for e-commerce food and groceries mean for the “last mile” industry? First, we need to define the “last mile” industry. It is those essential organizations that operate throughout the supply chain process—everything from the ordering of the goods online to resource planning, warehouse staff, fulfillment centers, packaging, and transportation partners, from trucks to drones, on down to the “last mile” of each product’s final destination.
We know that the logistics of transporting and storing refrigerated groceries involves an intricate process to confirm that precise hygiene and safety conditions are met throughout every step of the supply chain, from receipt to delivery at the designated destination.
To highlight the importance of food safety in the last mile industry, Frank Yiannas, FDA’s deputy commissioner for food policy and response, conducted an insightful interview last year on the impact of the pandemic on consumer buying habits. Yiannas said that part of the work involved with FDA’s “New Era of Smarter Food Safety,” an initiative designed to create a more digital, more traceable, and safer food system, involves dealing with the reality of e-commerce as more and more consumers order foods online that are delivered right to their door. “We have been considering what steps we need to take to ensure the safety of those foods in how they are produced, packaged, and transported,” he added. “When we first started talking about this, we were anticipating that 20% of groceries would be ordered online by 2023. That benchmark may have been blown out of the water by consumers sheltering in place. I don’t see that trend reversing when the crisis has passed.”
The Importance of Standards
This insight highlights the need for more to be done to support organizations operating throughout this last mile industry, especially for refrigerated delivery service providers. These providers have a clearly defined business risk management framework that specifies the provisions and operations for all stages, from acceptance of a chilled or frozen parcel to its delivery at the final destination.
The industry highlighted the need for this best practice framework in 2017 with the publication of the publicly available specification PAS 1018:2017—“Specification for indirect, temperature-controlled refrigerated delivery services. Land transport of refrigerated parcels with intermediate transfer.” Since its publication, the standard has been adopted by the International Organization for Standardization (ISO) and incorporated into a new standard published last year, ISO 23412:2020 : Indirect, temperature-controlled refrigerated delivery services — Land transport of parcels with intermediate transfer.
This standard provides organizations within the global last mile industry an internationally recognized and harmonized framework that demonstrates industry best practices to ensure that temperature-sensitive products are stored and distributed safely in order to protect the end consumer. The standard provides a practical breakdown of the essential elements of process management and risk control of temperature-sensitive products for last mile businesses by clearly articulating terms and definitions, refrigerated delivery attributes, acceptable conditions for operating sites, refrigerated enclosures, cold stores and cooling materials, transportation networks, geographical routing systems through to information exchange, the acceptance and transfer of chilled or frozen parcels, up to the final delivery of the parcel to its final destination.
An example of how industry sectors have leveraged and benefited from the use of ISO standards in the past would be cargo or freight containers that industries rely on to transport their goods around the globe. When containers were initially adopted as a means for shipping, there were many different sizes, types, and corner fittings used. This presented a variety of risks and challenges to the transport industry; the various types of containers, all with different dimensions and design specifications, being loaded onto cargo ships, railcars, and truck beds, caused a high number of cargo containers to become loose and fall off.
As a result, in August 1989, British Standards Institution (BSI) published BS (British Standard) 3951-1-1: Freight containers, General, specification for Series 1 freight containers: Classification, dimensions and ratings, which was adopted by ISO in April 1996 as ISO 668: “Series 1 freight containers—Classification, dimensions, and ratings.” This standard has been updated over the years and is still used to ensure that all cargo and freight containers meet the internationally adopted classification, dimensions, and ratings, so now the various types of containers are all manufactured to the same specifications and fit on cargo ships, railcars, and truck beds like Lego pieces.
The e-commerce and last mile industries are growing at an exciting pace. And, throughout the last mile industry, those risks that are present today related to the safe and hygienic distribution of temperature-sensitive groceries can be managed through the use of standards to better protect the products and consumers for tomorrow. Consider standards as a method that describes the best way of doing something, such as manufacturing a product, supplying materials, and managing a process or behavior. Voluntary and consensus-based standards are the distilled wisdom of people with expertise in their subject matter, experts who know the needs of the industries and organizations they represent.
Coole is director of food and retail supply chain at BSI Americas. Reach him at email@example.com.