How COVID-19 Pandemic Highlights The Need for Truly Digital Agrifood Supply Chains
COVID-19 is now a global pandemic, as declared by the WHO last week. The widespread infectious virus has set in motion several national lockdowns across the globe lasting from two weeks to indefinitely. New Zealand and India are now in the midst of lockdown as we speak.
Social distancing is now encouraged by governments worldwide, and employees are working from home whenever possible. Many businesses have halted operations, including food services and restaurants that have temporarily closed their doors – leaving suppliers and distributors struggling to redirect their supply, while supermarkets and online groceries struggle to fulfill the spike in demand for fresh produce caused by hoarding behaviour and public panic.
In Australia, produce prices have drastically increased in Woolworths amid the higher demand caused by panic buying. As more people stay at home in light of the pandemic, demand for fresh fruits and vegetables would likely hike, as they now have more time to consume fresh food. The emphasis on keeping one’s immune system healthy, coupled with experts recommending to keep fresh fruit and vegetables in diets, has led to a stronger demand for fresh produce in many countries, including Australia.
Empty Produce Shelves in supermarket [Source: Fruitnet]
Despite the sudden boost in demand at retailers worldwide for fresh produce, there are also farmers and growers that are struggling to redirect their supply. The coronavirus has disrupted trade between China and ASEAN countries such as Myanmar, Thailand and Vietnam, where China is a significant market for Southeast Asian agricultural exports. With contains now rotting at the Chinese borders due to the lockdown, and fruits waiting to be harvested with nowhere to go, the food waste generated would also be considerable.
This “messy middle” of our food supply chain becomes even more of a nightmare to navigate when you consider the logistical nightmare of transporting the food to reach consumers. Container capacity cuts, slowing of international freights, and an overall slowdown in the turnaround speed of containers will definitely affect our global food supply chain, given its interconnectedness.
The difficulty of navigating this messy middle can be felt in places like Queensland, Australia, where the ship lock-out policy has led to criticism that the 14-day COVID-19 bans on cargo vessels entering Australian ports will result in “severe” disruptions to food supplies and other everyday household goods. In the UK, where 40% of food eaten comes from imports, the limitation of border traffic could result in delayed fresh food transit and increased food wastage.
With a huge amount of international trade serving as the backbone of the world’s food supply chain, it is essential to continue operations. However, agrifood players throughout the supply chain are finding it difficult to get a clear view on the entire situation in order to better redirect supply to match demand in the global food supply chain.
This is not a new problem – the agrifood industry has long been plagued by disconnected visibility of the supply chain. This disconnected visibility stems from the reality, or flow of physical agrifood products, being different from the flow of digital information. The inability to concisely trace and track agrifood trade has resulted in many challenges such as food waste, food safety crises and trade disputes that result in whopping annual losses. Think a global 1.6 billion tonnes of fresh food being wasted every year.
Trade disputes are the bane of fresh produce trade. Buyers often end up receiving produce that do not match the order specifications and suppliers face heavy burden of proof when it comes to showing that they packed the produce to order specifications. This has led to a 5-10% loss of each container or order of fresh produce being rampant in the industry, and a resultant lack of trust between buyers and suppliers, particularly for new trades.
Given the atmosphere of distrust, buyers and suppliers typically do businesses with companies that they know. This becomes a problem when agrifood traders are looking to expand into new markets, or in the case of the COVID-19 pandemic, redirect supply to demand. At the same time, given the pressure put on distributors and retailers to supply food to consumers, it is critical that they receive exactly what they order. The current situation can afford no mistakes, meaning there has to be a way to see mistakes and rectify them at the soonest.
This is why, now more than ever, digitalizing produce and the supply chain is critical and essential to solving this disconnected visibility and build trust.
Digitalizing produce simply means creating a digital identity for every single physical agrifood product, thereby allowing agrifood players to obtain data from physical produce itself. At the moment, trade players are only able to share trade documents and one of two photos of the products over channels like emails or social messaging apps, leading to messy communications that are hard to verify and keep track of.
Our DiMuto 4T Suite Solutions helps companies to easily digitalize produce and aggregate their supply chain information all on one single digital platform. Using a combination of blockchain, AI and IoT to run our 4T Suite Solution, we are able to track and trace every single physical product and carton for every single trade order, along with imaging showing visible quality markers as well as relevant trade documentation.
Efficiently sharing immutable trade order information for both documents and products with relevant trade partners brings higher levels of transparency to the supply chain. This creates trust with full traceability and visibility provided by DiMuto.
DiMuto 4T Suite Solutions
As part of the 4T Suite Solutions, our DiMuto DACky devices are able to capture an image of the produce as the items are packed before being shipped out, and buyers are able to see the produce before it’s moved on the DiMuto Platform.
An example of a photo captured by DACky devices at an apple packinghouse
This reduces the risk of receiving produce that does match their purchase order specification after either a month’s wait via sea freight or costly air freight. Buyers would then, conceivably, be more inclined to make the purchase knowing beforehand that they would be able to see the produce before it leaves the packinghouse.
By reducing the uncertainty in such uncertain times through data, we can then carry on with the trade between produce suppliers and buyers and better hedge against any disruption caused by uncertain and unexpected situations.
In light of the current coronavirus crisis, we remain committed to helping agrifood players trade better and build a more transparent food supply chain. If you are interested to find out how DiMuto can help your business, please reach us here or drop us an email at email@example.com.