Inefficient distribution puts product quality at risk
October 17, 2013 Category Logistics, Logistics industry
Container manufacturers, ports and logistics firms have been pouring millions of dollars into developing cold-chain facilities to serve the expected demand for fresh produce and seafood as the global economy recovers. Poor local distribution in China, however, could frustrate shippers’ access to consumers in the world’s second-largest economy, traders said. Singamas Container seeks to double sales of its special containers, including refrigerated ones, over the next two to three years, and port operators and logistics firms strengthen the supply chain to ensure the seamless flow of fresh produce, but problems arise when it leaves the cold warehouses. “Very few trucks on the mainland are equipped with power supply for reefer containers, so most fresh produce is not kept in a regulated atmosphere on its way to the markets,” said Kurt Huang, General Manager of Shanghai Hongshen Freight Forwarding. “Even with those that are equipped, there are unscrupulous drivers who switch off the power during the journey to save fuel, inflicting heavy losses on the cargo owners.” Jiang Zhangjie, an Anhui-based fruit importer, said a growing number of new, inexperienced operators in the business and the lack of a regulated distribution network meant product quality was at risk of being compromised. “Many of these newcomers just want to make quick money,” Jiang said. “They do not invest for the future as that would raise the price of their produce and lower their competitiveness.” While Asian exports of fresh produce fell nearly 6% to USD18.6 billion last year, according to the United Nations, Asian imports jumped 12% to USD28 billion, with China accounting for almost 70% of the increase. Anthony Wong, former President of the Hong Kong Logistics Association, said he wanted to bring the city’s logistics know-how and expertise into the mainland by setting up a cold-chain zone in each of the major provinces, but he said the shortage of land was as much a problem there as in Hong Kong. “The municipal governments all reserve their land to projects like residential developments, shopping malls and hotels as they are the money-spinners that generate quick income for them. We have low priority,” Wong said, as reported by the South China Morning Post.
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