Food Crisis: A problem of disjointed logistics, not production

Back in 2019, or shall we say pre COVID time, I have written an article about the Food shortage/crisis are mainly due to logistics and not production. It turns out even more as we have no choice but to live with the Covid fiasco for unknown months/ years. My reasoning for the problem is now more affirmed than before. Beyond 2021, the commodities producer countries will face this problem even more than any other industries. Countries like India, Pakistan, Sri Lanka, Kenya, Indonesia & Malaysia. Now, we are already helping various Governmental bodies in South Asia to overcome such problems and effectively running a pilot for them at present. I wrote...

We are living in times when the food crisis is a concern for all countries. It might seem unbelievable, but the fact is that 45 per cent of all the fresh fruit and vegetables are wasted or lost every year. About 20 per cent of the pulses, dairy products and meat are also wasted globally, along with 30 per cent of cereals. Of course, these numbers are frightening. Thus, the concern is not so much over a shortfall in food production, but over the extent of food loss.

A few days back, I met Altaf Hussain who is a Dubai-based fruit and vegetable trader. He is one of the largest importers of mangoes and oranges to the UAE. Raised on land, lost at sea This year alone, he faced losses to the tune of over $122,000 (15 million Pakistani rupees approximately) because of a consignment delay.

“This is not a one-time incident,” he told me. “I face such situations at least 3-4 times every season,” said the Pakistani trader, who has been importing fruit from Pakistan to the UAE for over 39 years.

Hussain imports at least 1-1.5 million mango cartons to Dubai every year during the summer months. His consignments come from the sea and usually take 50-60 hours to reach their destination. Each carton carries around 7 kg mangoes. Can you imagine, how the loss of fruit affects not only the importer but also the farmer and the consumer?

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So when I ask him the cause of this problem, his one-line response is that it is due to the “unpredictable nexus of logistics”.

Hussain said once his consignment is loaded on ships and he is left to the mercy of shipping companies.

“Once my consignment is loaded on to a ship, I become dependent on the freight company. I have no idea about what route they will take and how many hours they will spend. I cannot trace what is happening to my million-dollar consignment during the journey. This year, 12 of my containers got delayed for 12 days. You can only imagine how much damage it would have caused my business,” said Hussain.

Small feeder lines do not like sharing their routes with us, he said.

“We don’t know whether they are coming to Dubai directly or are having stopovers. Sometimes, they change their routes without informing the clients, which is very frustrating and leads to immense losses,” said Hussain who pays large sums to freight and cargo companies for transporting fresh fruit.

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Hussain said he has no means for tracing, tracking and following up on these consignments when they are at sea. “In addition, there is no insurance. All damage to my goods because of travel delays is borne by me,” he says.

Hussain is not alone. Hundreds of fresh fruit importers across the world face the same challenge. “No one can understand the anxiety of traders whose consignments coming through ships and who have no idea what is taking place during the journey.”

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Today, the global logistic market is worth $7.85 trillion, which has the potential to grow to $11.12 trillion by 2020. The Gulf market is expected to expand to $73 billion by 2021. Despite involving such huge numbers there is no unified marketplace that may connect demand and supply under one roof.

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What is the solution? My answer is technology, in simple word the platforms like HashMove. No logistics company can expect to employ outdated standards of service for the shipments of today. There is a need to take a holistic and integrated perspective of one’s supply chain. This has always been important, but it’s even more critical today as customer expectations on cost, quality and service have increased dramatically.

The global logistics industry needs a one-stop-shop for all such challenges. Like other industries, logistics in the supply chain has to find a solution in technology. Developing an IT strategy is critical to any business strategy, and logistics providers can no longer be an exception to this new rule.

When Ubers and Airbnbs of this world bring services to the palm of our hands, logistics can no longer work on ledgers tucked away in dusty drawers. Time has come to revolutionize the logistics industry.

Seeing the catastrophic & absolutely manual run situation of the logistics industry vastly around the globe, the need for building a platform like HashMove was first discussed between me, Noman and Abdur (my close friends and Co-Founders) in Silicon Valley California.

Unlike other platforms, which were providing basic applications like optimizing the loads for the trucking industry, a request base cargo quotes services for ocean movement, we realized that unless we provide an end to end digitization to this industry the state of its affairs will remain unchanged. Hence we had decided to build a platform that must make all the verticals of the logistics industry ‘digital’.

These verticals are but not limited to; Trucking, Freight Forwarders, Clearing Agents, Shipping methods (ocean air and land), Insurance & Trade Finance companies etc. Our vision was to seamlessly connect them with each other to provide an experience to the businesses/individuals where they search the quotes of the Freight and providing an ability to instantly book consignments without a need of a middle man. Through the same platform, they can track their booked cargo in real-time.

This multi-modal logistics platform is now a reality and companies started to book their shipments with virtually no-pain experiences. In the past, it used to take them between 48- 96 Hours to book a consignment (time from asking the quote from Freight Forwarders till actually dispatching the goods from their warehouses) told me by the Group Head of Procurement & Logistics of a global FMCG company who is using HashMove platform now. This timeline has now reduced to 15 minutes, thanks to the power of the platform.

To me, the biggest satisfaction is to see & feel that the end-user of this logistics movement (which are essentially importer or exporter) is now going to be in full control and knowledge of their consignment and its entire journey.

This is just the beginning of a descriptiveness to this industry and its just a matter of time when the power of digitization will bring the maximum food and cargo safety into this world.

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Image Courtesy: equinoxlab, Tashiqa