THE ROLE OF REEFER AND REFRIGERATED TELEMATICS IN MEASURING AND MONITORING THE COLD CHAIN

A WHITEPAPER BY TOM CHICOINE VICE PRESIDENT BUSINESS DEVELOPMENT, COOLTRAX

EXECUTIVE OVERVIEW
For every truck that transports food, your companys reputation is at stake. Can your company guarantee your food remains fresh until delivered to its destination? If reefer units or refrigerated trailers malfunction during transportation and the food aboard spoils, your company could experience widespread image problems, experience decreased product sales, be subject to major fines by regulatory agencies, and face potential lawsuits from victims. The main defense against such occurrences is deploying the right protection which is where telematics monitoring and management technology comes into play. Approximately 500,000 trailer refrigeration units operate across the United States, but only an estimated 15 percent of these vehicles operate with on-board telematics technology. Companies operating trucks without this technology deny their fleet managers the ability to monitor reefer unit and refrigerated box temperatures, or to be alerted to truck locations and open-door durations. Fleet managers also lack the ability to remotely change reefer settings when necessary. Having these capabilities allows transportation firms to react when temperatures fall outside of accepted ranges whether based on government regulations or internal requirements. More importantly, having these capabilities can help companies avoid catastrophic consequences. This white paper examines why food transportation companies need telematics technology and why the majority of transportation companies are unaware of whats happening to their products inside their reefers and refrigerated trailers. The paper also discusses new, stricter regulations on food safety and increased regulatory enforcement. Finally, this paper identifies the attributes to look for when searching for a telematics solution. Such solutions not only help transportation companies take on the temperature management challenge, but also deliver ROI by reducing shrink, preventing rejected deliveries, and enhancing assetmanagement opportunities.

THE DIFFICULTY OF MEASURING TRUE REFRIGERATED UNIT PERFORMANCE

The overwhelming majority of trucks with reefer units do not possess remote monitoring and management capabilities. Without real-time information, fleet managers have to conduct trial and error processes to discover the source of reefer and refrigerated trailer problems rather than identifying issues and applying remediation immediately. Many managers develop driver SOPs to limit reefer unit and refrigerated box malfunctions, but its impossible to validate adherence. Fleet managers can only rely on each drivers integrity. While most drivers can be trusted to keep reefer units running and limit the amount of time doors remain open, theres no way to know for certain if they follow guidelines correctly. Without remote, real-time technology its impossible to identify when reefer units in transit have improper set points or might be beginning to fail. Some companies attempt to address this issue by installing data loggers to accumulate performance information. But, because the data is not transmitted in real time, this approach serves only as a reactive method for determining what caused a delivery to spoil or be rejected at the time of delivery. Other transportation firms purchase reefers with built-in data loggers. If performance problems occur on these units, they typically have to be delivered to a dealer to access the data. Another disadvantage of data loggers is that they only provide temperature measurements. While temperature sensors may provide companies with real time alerts, fleet managers usually dont have the ability to fix problems remotely by applying system changes. By comparison, reefer microprocessors can actually report the performance of all major operating components. The inability of data loggers to collect this additional information in real time makes it difficult to determine the root cause of reefer and refrigerated trailer failures. With the advent of data loggers, the majority of cold transportation companies think they have a grasp on reefer performance. But, advance monitoring and management technology often reveals surprising information. For example, a leading U.S. food and beverage company with a fleet of more than 6,000 trucks thought its trailer temperate performance was acceptable. After installing telematics technology, management

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The Role of Reefer and Refrigerated Telematics in Measuring and Monitoring the Cold Chain | March 2013 | cooltrax.com

discovered truck doors remained open for periods of time far beyond acceptable standards.

TIGHTENING OF COMPLIANCE ENFORCEMENT

In addition to monitoring and managing reefer units and refrigerated trailers while in transit, the packaged products industry will be facing the challenges of meeting the requirements set forth in the 300 page Food Safety Modernization Act (FSMA) implemented by the Food and Drug Administration (FDA) in 2011. Because the language is still vague and not all regulations and definitions have been finalized, cold chain transportation companies are unsure of just how big an impact the FSMA will have on their operations. Without doubt, the FSMA gives the FDA greater autonomy to shut down companies and recall products. One of the primary requirements transportation companies must meet will be product traceabilitytracking product from harvest to table. The FDA may eventually compel transportation firms to deploy tracking technology. The U.S. Department of Agriculture (USDA) is another regulatory body that food transportation firms must contend with. In an effort to enhance the safety and quality of meat, poultry, eggs and fresh produce, the USDA mandates the use of Hazard Analysis Critical Control Points (HACCP) planning. As transportation companies know, HACCP policies can be more stringent than state and local regulations. Even if these companies are meeting local and state regulations, they must adhere to the HACCP plan or risk shut down. Due to the low number of federal inspectors, regulators use the HACCP plans as guides to speed the auditing process. In the coming years, the FDA and USDA will depend upon certified third-party auditors to aid with inspections. All regulatory bodies want the human element taken out of the documentation process and will emphasize the need to validate adherence to HACCP plans using automated tools. The increase in inspections is likely to create problems for the food transportation industry if auditors find a discomforting percentage of food delivery loads violating temperature policies. The FDA and USDA are not acting alone. For example, the Indiana State Police now have the authority to stop trucks, check trailer temperatures, and call in regulatory personnel should obvious violations be discovered. Its likely that other states will follow suit. While these regulation enforcement policies are not yet at the level they will soon rise to, transportation companies should begin preparing for this level of oversight. When forensic work needs to be performed to track spoiled product, regulators will want to view exactly where trucks traveled, the time they spent at each stop, when doors opened and closed, and when product was loaded and unloaded. There has been a steady rise in the number and the severity of food spoiling incidents that have resulted in illness and death. The Center for Disease Control (CDC) estimates that close to 48 million people in the United States are stricken with food-borne illnesses and approximately 3,500 die. There is scientific evidence that people who suffer from food-bourne illness can develop chronic diseases over time. The class-action lawsuits filed for some of these occurrences typically blame every entity in the supply chain. Because the transportation segment of the product lifecycle is the most difficult to monitor, transportation firms may come under the most scrutiny.

THE BENEFITS OF TELEMATICS TECHNOLOGY

To take on the challenge of monitoring and managing reefer units and refrigerated trailers remotely, while preparing for an increase in regulatory enforcement, the transportation industry has started taking a closer look at telematics technology. Telematics solutions have offered monitoring capabilities for many years, but the ability to manage reefer units and trailers remotely is relatively new. Applying telematics to monitor and manage the environment of food in transit fulfills several key benefits: Protecting brand reputation by preventing rejected deliveries and spoiled food Maintaining food safety to avoid potential lawsuits Complying with regulatory measures to prevent penalties Reducing product shrink to increase company profits

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The Role of Reefer and Refrigerated Telematics in Measuring and Monitoring the Cold Chain | March 2013 | cooltrax.com

 Demonstrating accurate product traceability to differentiate from competitors Creating fuel savings and reducing a companys carbon footprint Many transportation executives believe that rejected deliveries of food spoiled in transit is an acceptable cost of doing business that cant be eliminated. Conventional wisdom has been to build in sufficient margin to accommodate these losses. In todays competitive marketplace with margins that continue to dwindleproactive transportation executives know that they need to reduce shrink as much as possible. Reducing the shrink to close to zero will have a positive impact on the companys financial health. Another major benefit of telematics monitoring and management is the ability to react to product and cabin temperatures. One food transportation company discovered that some drivers left the doors open from their arrival until their departure at each delivery locationoften for 20 minutes or more. The company instituted a policy requiring drivers to close trailer doors immediately after removing products. Not only did this new SOP ensure product temperatures remained consistent, with telematics, the company was able to monitor drivers. Companies that hire independent owner/operators to transport their product must contend with another potential liability. With fuel prices remaining high, independents are more subject to turning off reefer units to reduce fuel costs than employees. Telematics monitoring puts the controls back in the companys hands allowing clear visibility into causes for lost loads due to inconsistent temperatures in the units.

THE ROI OF TELEMATICS TECHNOLOGY

In addition to improved food protection and enhanced tools to aid regulatory compliance, telematics allows transportation firms to generate a significant return on their investment by reducing operating costs in several areas. Significant fuel savings are gained by remotely managing pre-cool policies and acknowledging unnecessary reefer run-times by way of alerts. Built-in GPS capabilities allow dispatchers to better understand how trailers are used, which leads to a reduction in the number of required trailer units for deliveries in a particular sector. GPS capabilities can alert the company when trailers or products are stolen. The use of telematics can reduce insurance costs since the technology helps prevent product loss. Alerts indicating when reefers are about to fail allows for repairs sooner to keep food protected and extend reefer life. Alerts indicating reefers are about to run out of fuel prevents reefers from extracting sediment from the bottom of fuel tanks, which eliminates the need to take the reefer offline to flush out fuel lines. In addition to increased profitability, monitoring and managing telematics gives companies a competitive edge due to reduced shrink and fewer rejected loads. Customers are more likely to choose or remain loyal to a transportation firm that has real-time data documenting proper reefer temperatures and a demonstrated ability to deliver safe food to market. Because companies using telematics can provide this information, they will be more appealing than companies that rely solely on SOPs or data loggers.

REAL-TIME MONITORING COMPLEMENTED BY REMOTE MANAGEMENT

Past telematics solutions have enabled temperature monitoring, but the management feature is fairly new to the industrygiving fleet managers the ability to talk back to reefer units on the road and change temperature settings if a set point needs adjustment. Real-time monitoring complemented by remote management of temperatures while food is in transit allows transportation firms to be proactive rather than reactive when reefer units and refrigerated trailers dont keep food at proper temperatures. Fleet managers receive real-time alerts from sensors if a refrigerated truck door is open too long. Through wireless technology that communicates data using cellular connections, managers can literally manage the internal environment of every reefer unit. Leading solutions also offer the option of viewing alerts and reports via Web portals. Cloud computing telematic solutions offers major financial incentives because cloud data storage costs are operating expenses rather than capital expenditures for server hardware and software.

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The Role of Reefer and Refrigerated Telematics in Measuring and Monitoring the Cold Chain | March 2013 | cooltrax.com

To verify accuracy, monitoring and management tools are installed in refrigerated assets to assure temperature readings are valid. The sensors collect all possible data, including outdoor ambient temperature and the temperature of products when leaving the depot as well as the number of door openings and the duration of door openings. Collecting all this data clearly shows if and when temperatures progressively rise. Collection of this data, along with analysis of the progression of readings over time, ensures accurate reporting of internal temperature levels. This type of validation allows transportation companies to communicate to customers and regulators exactly how their food temperate information is confirmed. This information is invaluable to companies in evaluating their SOPs to ensure the correct measures are in place to properly protect food.

KEY TELEMATICS TECHNOLOGY ATTRIBUTES

When considering a telematics solution, its advisable to first conduct a test on a limited number of refrigeration units to assess the value of the technology and forecast potential ROI for your company. The key attributes to look for in a telematic solution are: Advanced Traceability: Over time, the FDA and USDA are expected to add more regulations to the recently released FSMA. Transportation firms need to demonstrate the ability to easily trace trucks and food temperatures with time stamps at all stops as food moves from warehouses onto trucks and into stores. Since food packaging does not offer GPS, telematics technology makes it possible to know where food is while in transit. Seamless Integration: Systems that monitor food in transit should integrate easily with systems that monitor food in warehouses and in retail stores. If your company manages food across the entire food supply chainfrom harvest-to-tableits best to partner with a firm that offers technology that spans food temperature management across all three areas. If you manage just one or two areas, the ability to integrate could still prove beneficial as you collaborate with key business partners that handle the other components. Multi-system integration enables one view as food travels across the entire cold chain and prevents the need to interact with multiple systems or to find ways to move data from one system to another as the food moves. Wireless Access via RFID Sensors: The wireless approach eliminates the need to hard wire sensors onto trucks. Hard wired devices cost more and require drilling work on trailers. In addition to potentially harming the integrity of trailer insulation material, hard wired devices cant easily be moved. Conversely, wireless sensors can be moved around reefer boxes as necessary to collect a range of information. Multi-Function Capability: Sensors that collect multiple types of information allow fleet managers to move sensors to monitor and manage different factors in reefer units and trailers, including temperature and door activity. Support for HACCP and Regulation Compliance: In addition to deploying a technology that enables reefer/trailer monitoring and management, its also critical to work with a solution that generates easy-to-understand reports. Having this capability facilitates regulatory audits when proving compliance with HACCP, FSMA and other regulations. Preventing violations is important, but proving you are doing so is just as critical. Its important to partner with a solution provider that collaborates with customers closely to understand their pain points in an effort to improve the technology. Over time, regulations and requirements for keeping different food groups fresh will change as will reefer and trailer technology. As these changes occur, the monitoring and management technology will need to keep pace. The best way to help your company adapt to these shifts is to build a solid working relationship with your solutions provider.

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The Role of Reefer and Refrigerated Telematics in Measuring and Monitoring the Cold Chain | March 2013 | cooltrax.com

MEETING THE NEEDS OF YOUR MOST IMPORTANT CUSTOMERS

While the main function of telematics technology is to provide proactive monitoring and management tools for food safety, it can also help transportation companies learn about what goes on inside reefer units and refrigerated boxes while trucks are on the road. Analysis of the information can help companies find innovative ways to load products to allow reefer units to perform optimally, and may even lead to the design of more efficient trailers. When researching telematics solutions for your company, look for those that extract as much data as possible through alerts, fault codes, temperature set points, door open/close statuses, and geo-zone tracking. The data can serve as the ultimate proof of your companys ability to properly care for food and adhere to regulations. For more information on how telematics technology can assist your company in monitoring and managing food in transt, we encourage you to vistit our website at http://cooltrax.com.

About Tom Chicoine Tom Chicoine, Vice President Business Development for Cooltrax, has more than 30 years of experience in the perishable goods industry including responsibility for manufacturing, transportation and distribution. Prior to joining Cooltrax, Chicoine held senior positions with TCN, Dairy Mart Convenience Stores, Cumberland Farms, The Lawson Company (Sara Lee), Garelick Farms, and H.P. Hood.

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