What are Some of the Cold Food Chains Biggest Threats, and Why?

Cyber Security

Ransomware is considered a major danger to the cold food chain from a digital standpoint. Businesses find it more difficult to transport goods when computer systems are locked down, and waste is more likely. The Department of Homeland Security reports that in the first half of 2023 alone, ransomware criminals extorted at least $449.1 million.

There's a good chance that soon, cybersecurity risk may increase in scope. Several of the mid-market businesses that represent the backbone of the food supply chain are growing their digital footprints for several reasons, some of which are competitive and others of which are in response to regulatory mandates. This implies that the attack surface will increase.

In a recent Food Logistics interview, I shared that utilizing cloud services and keeping comprehensive backups and recovery plans can help reduce cyber risk. In addition, talent in cybersecurity is lacking. Technology schools and universities aren’t producing enough to meet the ever-increasing demand, and what few there are get snapped up by bigger organizations or government entities. Thus, in addition to upgrading to more contemporary and safe software—specifically, their ERP software—organizations should also consider more managed services for cybersecurity.

A lot of supply chain instability occurred in 2023 because of inflation, natural disasters, and geopolitical sanctions. Here's a look at how these variables affect and are influenced by supply chain threat mitigation strategies used by businesses.

The biggest challenge with these sources of instability is that they are difficult to predict. And in the face of unpredictability, companies need to stay flexible and adaptable.

One way to do that is to have visibility across the supply chain. You need to know what’s in your warehouse, what’s coming to your warehouse, and what’s on your truck. If there’s an unexpected event, like a wildfire or a hurricane, how hard is it for you to get that product somewhere else, whether it’s on its way to you or on its way to your customers? For some, this isn’t possible, and that means more waste and spoilage.

Route optimization and backhaul software paired with AI technology allows for immediate rerouting and simultaneously collects data to inform future decision making. As a result, food brands can reduce fuel usage, prevent perishable items from spoilage and deliver products on time.

It’s a mistake to sideline sustainability, even in a challenging economy. Data-driven technologies with AI capabilities can help food and beverage businesses quickly transition to sustainability-focused decision making and practices—and allow them to reap the benefits of long-term efficiency and profitability.

Cloud computing and managed services will be helpful to firms throughout 2024, as they provide additional resiliency and levels of redundancy for business operations throughout the supply chain.

According to multiple sources, the average value of cargo stolen during reported events in 2023 was $214,104, equivalent to an estimated $223 million in cargo across 1,778 reported theft incidents. What can be accredited to the rise in cargo theft?

There can be multiple reasons that factor into increased cargo theft, including shortages that have become commonplace during the pandemic and transportation bottlenecks, leading to a pent-up demand and an easy way for criminals to make a profit.

Labor disruptions are also substantially higher this year, up 136%, according to Resilinc data. This includes company and site-level strikes, national strikes, layoffs, and labor protests, among others. What does this mean for the future of cold food supply chains?

Many of VAI’s customers have faced a two-part challenge on the labor front. They built larger facilities to keep up with pandemic-era demand. But they’ve struggled to hire because of a labor shortage. I think in the future, we’ll see an acceleration of technology automation deployments to cope. We’ll see more AI and IoT automation, such as ERP and analytics applications – in the back office and in the warehouse and supply chain. This helps companies do more with less.

Incidentally, I’ve seen some research that suggests that automation improves retention. Workers really do appreciate a well-run, efficient workplace and the additional skills that they attain from automation. Second, companies are going to lean on mobile devices in the warehouse and in the field because they accelerate onboarding. Everyone has used a smartphone, right?

What are additional key things to know?

In general, small-and medium-sized food businesses will need to expand their digital footprints in response to increased regulation in 2024. In particular, the sector will increasingly adopt blockchain and IoT to comply with regulations that call for end-to-end traceability. This will require having advanced modern ERP software with food industry-specific capabilities necessary to deal with these cutting-edge technologies. 

These and other emerging technologies will generate an enormous amount of data that can be used to train AI models. Beyond 2024, we may see an explosion of AI deployment in small and medium-sized businesses in this sector.

Kevin Beasley

Chief Information Officer