Technology and AI the future of cold storage

Technology
and artificial
intelligence are
the future of cold
storage in South Africa.
“Refrigerated
warehousing comes with
very high running costs
which makes it critically
important to automate
as many of the labourintensive
practices in the
country today,” says Dieter
Veening, general manager
of Table Bay Cold Storage.
While this will have a
major impact on labour
and headcount, Veening
says improving distribution
through improved
warehousing practices is
the way of the future.
Because of the high cost
of cold storage, it’s crucial
to reduce overheads and
manage running costs –
critical factors for survival,
especially in the current
economic environment.
“The ability to simplify
the management and
distribution of products
through the supply chain
through IT or AI will
change how we currently do
business,” he says.
South Africa has the
benefit of
working with
first world
countries
who are now
focusing
attention
on staff
reduction
through
automation.
This comes
at a high
initial cost
and has its
limitations,
says Veening, who explains
that in many countries
around the world it has
forced customers into a
narrow funnel that requires
very detailed and exact
information or packaging
formats for products.
Service providers then
tend to lose
some of their
ability to be
f lexible.
He says
South Africa,
however,
has the
opportunity
to balance
the drive for
automation
while holding
onto the
ability to be
f lexible.
“There is a far higher
demand on SA export
customers to provide high
quality packaging than
for first world countries
importing into SA,” he
explains. “The packaging
received into SA cold stores
is of far lower quality and
places undue demands
on the warehouses to
manage damage and
storage challenges. SA
export products are
predominantly exported
on pallets whereas a high
percentage of imports
are still ‘handballed’ into
containers.”
This, says Veening,
means many import
containers have to be
unpacked by hand and onto
pallets.
“This requires manual
labour, increasing the
handling of the individual
product. It reduces the
number of containers
one can handle in a day
and therefore reduces
the warehouse’s ability to
increase revenue.”
According to Veening,
one of the biggest
challenges in the local
cold storage sector is the
high cost of electricity and
water. “The investment is
high with long return on
investment periods. The
focus on reducing costs
within the distribution
chain – and the increasing
agricultural instability
due to weather patterns
changing so drastically
– increases the already
volatile demand for
cold storage,” he says.
“The trend is rather an
increasing peak and trough
scenario which makes it
difficult to manage and
plan ahead at times.”
INSERT & CAPTION
South Africa has
the opportunity to
balance the drive
for automation while
holding onto the ability
to be flexible.
– Dieter Veening