FreightCasts Episode Summary: The Regulatory Pressures of the Global Cold Chain - Cold Chain Summit

In this episode of FreightCasts hosted by John Gallagher from FreightWaves, the discussion centers on the regulatory pressures impacting the global cold chain, particularly focusing on the refrigerated supply chain's carriers and shippers. The episode features an insightful conversation with Lowell Randall, Senior Vice President of Government and Legal Affairs for the Global Cold Chain Alliance (GCCA), who provides expert analysis on current regulatory challenges, industry best practices, and future outlooks for the cold chain sector.

1. Introduction to Regulatory Challenges in the Cold Chain

John Gallagher opens the session by introducing Lowell Randall and setting the stage for a deep dive into the regulations affecting the refrigerated supply chain. Randall emphasizes the significance of understanding and navigating these regulations to maintain food safety and supply chain efficiency.

2. FDA Food Safety Modernization Act (FSMA) and Sanitary Transportation Rule

Randall discusses the FDA’s Food Safety Modernization Act (FSMA) rule on Sanitary Transportation and Human Animal Food, which mandates rail and truck carriers to ensure the sanitation of food during transportation.

• Best Practices Guide: Randall explains that the GCCA developed a comprehensive refrigerated transportation best practices guide to help carriers comply with FSMA. This guide addresses sanitation, temperature management, records retention, and pre-cooling processes, encompassing the entire lifecycle of a product within the supply chain.

  “We crafted a refrigerated transportation best practices guide that really takes you all the way through the steps of the life of a product going through the food supply chain.” ([02:08])

• Certified Cold Carrier Program: To further support compliance, GCCA introduced the Certified Cold Carrier program, allowing carriers to demonstrate their adherence to these best practices.

  “If you're interested in taking that next step, you can even look at certification now.” ([04:40])

3. FDA’s Proposed Traceability and Record Keeping Requirements

John Gallagher highlights a proposed FDA rule aimed at enhancing traceability and record-keeping for food manufacturers, which, while not directly applicable to carriers, has significant indirect implications.

• Impact on Carriers: Randall points out that carriers must understand the increased responsibilities of shippers and receivers to maintain traceability throughout the supply chain.

  “Whether it's something FDA requests or not, it may be something that a shipper or a receiver will work with their carrier partners on to ensure that that traceability is solid all the way through the supply chain.” ([05:06])

4. Challenges in the Trucking Industry: Driver Availability

The conversation shifts to the trucking industry's persistent challenge of driver availability, exacerbated by the COVID-19 pandemic.

• Labor Shortages: Randall acknowledges that labor availability, including drivers and warehouse workers, remains a top concern for GCCA members.

  “The pandemic has only exacerbated it. So that is one of the top issues that I hear from members about is labor availability.” ([07:08])

• Policy Solutions: He discusses potential legislative measures, such as the Drive Safe Act, which aims to expand the driver pool by allowing younger individuals to drive across state lines, and creative recruitment strategies like apprenticeships and veteran transitions.

  “We think that that's not a panacea, that's not going to solve the whole problem, but it's another tool in the toolbox.” ([07:08])

5. Maritime and Rail Operational Costs: Demurrage and Detention

Randall addresses the rising operational costs faced by GCCA members due to increased import demand, leading to demurrage and detention fees, service disruptions, and elevated ocean carrier prices.

• Regulatory Mitigation: He emphasizes the need for proactive regulatory measures to mitigate inappropriate applications of demurrage and detention, particularly during container availability shortages at ports.

  “We need to be working together through these challenging times... working with our government partners to try to ease these challenges as much as we can.” ([10:21])

• Federal Involvement: Randall highlights recent regulatory changes by the Surface Transportation Board and urges the Federal Maritime Commission to take a more active role in addressing these issues.

  “We're hoping that the Federal Maritime Commission can become even a little more active... to mitigate some of the damages that we're seeing from a detention and demurrage standpoint there.” ([10:21])

6. Digitization and Technology in the Cold Chain

The discussion moves to the role of digitization in enhancing supply chain efficiency, particularly through improved data transfer and traceability.

• Federal Support: Randall advocates for federal support in technology development, including blockchain and other emerging technologies, to bolster the cold chain's resilience and efficiency.

  “We need to work with the federal government to ensure that that information technology is continuing to be developed...” ([14:40])

• Smarter Food Safety: He references the FDA’s initiative for smarter food safety, which leverages technology to enhance traceability and compliance.

  “Technology can play an important role in the future of the food supply chain.” ([14:40])

7. Cybersecurity in the Food Supply Chain

Randall underscores the increasing vulnerabilities in cybersecurity as the cold chain becomes more digitized, citing recent ransomware attacks on major players like JBS.

• Government Role: He outlines the need for government agencies, such as the Department of Homeland Security, to collaborate with the industry in preventing and mitigating cyber threats.

  “There are a couple of different roles. One is working with agencies like the Department of Homeland Security...” ([16:46])

• Industry Responsibility: Randall stresses that while government support is crucial, the industry must adopt best practices to safeguard their systems against cyberattacks.

  “We all have our own responsibility as folks in industry to use the best practices that are available to lessen the threat of cyber.” ([16:46])

8. Infrastructure Legislation: Opportunities and Concerns

In addressing upcoming infrastructure bills, Randall expresses support for investments in roads, bridges, ports, and rural broadband, which are essential for the cold chain's efficiency.

• Funding Concerns: However, he voices concerns about the methods of financing these investments, particularly the potential for increased tax burdens on the food industry, which is already facing rising operational costs.

  “But at the end of the day, they may have been tremendously busy, but that doesn't mean that they got great economic benefit out of the pandemic. So by placing additional tax burdens on food industry right now... doesn't seem to be the right balance.” ([18:57])

9. Conclusion

John Gallagher wraps up the discussion by thanking Lowell Randall for his valuable insights into the regulatory landscape of the cold chain supply chain. Randall reiterates the importance of collaboration between the private sector and government to navigate the evolving challenges.

“It's my pleasure. Thanks for the invitation and thank you.” ([20:55])

This episode provides a comprehensive overview of the multifaceted regulatory pressures on the global cold chain, highlighting the critical need for industry best practices, technological advancements, and collaborative policy-making to ensure the resilience and efficiency of the refrigerated supply chain.