DP World: Procuring Resilience for Perishable Supply Chains

Global food loss is a major challenge, with much of the waste resulting from logistics failures and supply-demand imbalances.

A new report from DP World explores how transforming perishable logistics can considerably reduce this waste.

The total value of global food loss is estimated at US$1tn. The UN Food and Agriculture Organisation (FAO) reports that US$400bn of this is lost before products even reach stores.

Much of this spoilage occurs during transit, especially in warmer climates. Key causes include logistics failures, like poor cold-chain solutions, overproduction, demand mismatches and inconsistent grading.

The urgent need to transform perishable supply chains

Improving end-to-end logistics through better data sharing and market access is essential. Food waste creates major economic, social and environmental problems, generating 8-10% of global greenhouse gas emissions, according to the UN Environment Programme.

This highlights the urgent need to transform perishable supply chains. Building more reliable systems requires a deep understanding of cargo owners' needs to transport products more effectively and avoid disruption.

Alfred Whitman, Global Vice President, Perishables & Agriculture at DP World, explained: "Getting the logistics right couldn't be more important especially in the Global South where cold chain infrastructure requires more sustained investment.

"To build more reliable supply chains, we must know the price of disruption. And to improve logistics quickly, we need to know what cargo owners are prioritising."

The impact of logistics disruptions

DP World's report used survey data from cargo owners to examine the frequency and financial impact of logistics disruptions.

Geopolitical instability and climate-related disruption are key variables with 93% of respondents noting the impact of temperature extremes flooding and droughts.

Major events have affected many cargo owners in the last three years. Over 90% are still feeling the strain from Covid-19 while 76% have been impacted by climate-related crop shortages. Global port congestion (71%) shifting tariffs (54%) and waterway crises like the Red Sea disruption (41%) have also been major factors.

The financial and reputational risks from supply chain shocks are substantial. Research from King's College London suggests climate shocks could cause US$25tn in global supply chain losses by 2060.

Companies facing constant shocks report higher costs and lower customer satisfaction. After a disruption, 72% of leaders see more customer complaints and 65% report losing contracts.

Brand image also suffers, with 60% reporting damage and 58% noting reputational harm among partners.

Capability gaps and poor infrastructure put businesses at further risk. In fact, 88% of cargo owners state that technology or systems failure has been a major disruption.

Despite 86% of cargo owners expressing confidence in their logistics partners, 94% identify limited visibility as a problem. This suggests partners are reactive in fixing disruptions but lack the predictive insights to prevent them.

Strengthen resilience

"The scale of spending on resilience infrastructure matters but only if it's targeted on developing reliable capabilities across the chain - and importantly ensuring they actually work together," Alfred adds.

DP World suggests several actions to strengthen resilience.

These include tracking waste and carbon intensity using AI for early issue detection and building regional cold-chain networks to improve freshness.

By balancing cost-saving with protection, major losses can be avoided.

Ultimately, logistics should be measured by product quality, as freshness builds trust. Prioritising capable logistics and investing in cold-chain solutions will decrease waste, lessen emissions and reduce supply chain strain.