Hello, and welcome to the coolest community in freight! Here you’ll find the latest information on warehouse news, tech developments and all things reefer madness-related. I’m your controller of the thermostat, Mary O’Connell. Thanks for having me!
All thawed out
Reducing carbon emissions from reefer trucks is catching on south of the border. Mexico City’s air quality is 10 times the World Health Organization’s recommended limit, ranking it sixth worst amongst major cities worldwide. That’s not exactly what the country wants for its people, and given increased demand for manufacturing facilities in Mexico, it may get worse.
But in response to the Mexico City government’s push for adoption of its Climate Change and Environment Program, MegaFlux has stepped up to work with large fleet owners to reduce total cost of ownership of vehicles that reduce carbon emissions. Switching an entire fleet to electric vehicles is tricky, but MegaFlux is meeting carriers where they are.
For example, vehicle chassis are built for 30 years of use, yet most carriers sell them after five to 10 years. MegaFlux has found a way to retrofit vehicles with electric powertrains. This reduces waste and delivers savings of more than 30% compared to buying a new diesel truck without subsidies.
Large U.S. shippers have jumped on this train. According to a Fleet Equipment article, “AB InBev recently unveiled the first all-electric distribution center in the Americas. The [cost of ownership] for MegaFlux’s MF18T truck used with AB InBev is expected to have savings of 10% compared to purchasing new diesel trucks. This groundbreaking initiative and its savings demonstrate the potential for large-scale electrification and sets a precedent for other commercial fleets to follow.”
As more shippers move to Mexico, reefer EVs will become more prevalent.
DHL Global Forwarding has expanded its temperature-controlled offering with a $1.5 million dedicated pharmaceutical transport facility in Indianapolis International Airport. This facility will cover 30,000 square feet and has direct access to the airport ramp. It will have dedicated service to Brussels. This new route has to be a direct result of the campaign that Belgium has conducted to become the hub for European medicines.
Jumping on the new offering are Siemens and Eli Lilly. Both companies can improve sustainability metrics as the volume of packaging and temperature-controlled containers can be reduced. DHL reduces transportation costs and transit times by using thermal blankets that insulate the cargo.
By locating the new facility near the tarmac at the airport in Indiana, DHL can quickly load containers into the temperature-controlled aircraft to keep products in their required temperature range while using less packaging than perishable-goods shippers often use. Once the goods arrive in centrally located Brussels, they’re easier to distribute throughout Europe.
Food and drugs
Meal kits have taken over more than just podcast sponsorships. During the pandemic, consumers nationwide began having complete meals delivered to their homes. However, now that the pandemic is essentially over, meal kit companies are looking for new ways to retain consumers as more people are flocking back to restaurants rather than cooking at home.
In a Food Market article, Bloomberg’s Janine Perri wrote, “After 11 months, customer retention among the January 2022 cohort was 15 percent at Blue Apron, 11 percent at Home Chef, 9 percent at HelloFresh SE, and 5 percent at Marley Spoon Inc and Sunbasket.”
Blue Apron’s Q1 reported revenue dropped 4% year over year for a net loss of $17 million. HelloFresh, on the other hand, saw a new high of $2.2 billion in the first quarter as it focuses on the overall customer experience and the options available to them. Most meal kit companies are struggling to figure out what the profitable post-pandemic future looks like.
Cold chain lanes
This week’s cold market is Spokane, Washington. The market has the highest level of reefer outbound tender rejections in the country. The index is at 14.52%, significantly higher than the average, which is 2.72%. When rejection rates are above 10%, that indicates spot rates are elevated above contracted rates. Rates might not be sky-high in Spokane as they would be in a bigger market due to the fact that outbound tender volumes are lower.
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