Shortcomings of the current system

America’s supermarkets are the tip of an enormous iceberg that represents a complicated logistics network. On a good day, this system works. It may be unsustainable and deliver goods of questionable quality and freshness, but it’s efficient to a fault. However, in our current COVID-19 pandemic scenario, we are seeing a domino effect take place that threatens the efficacy of the whole chain.

These are the three main problems: 

1. Too much demand

2. A pinched supply

3. A crumbling infrastructure

“We do not see a supply shock in the sense of the availability...But there could be a supply shock in terms of logistics, not being able to move it from point A to point B. This is something new and very difficult to predict. It’s that uncertainty that right now is the biggest danger.”

TOO MUCH DEMAND

Not enough, not in time

The whole system operates on an inventory management principle called “just-in-time” shipping. During normal conditions, this ensures that shelves are stocked with a minimum amount of inventory. Instead of back-stocking in the store, the next shipment is scheduled to arrive just as inventory begins to run low.

As COVID-19 spreads to new cities and counties, people living there immediately start thinking in the long term. This translates into a trip to the supermarket to stockpile food in anticipation of restrictions later in the week or month. Across the U.S., supermarkets have been seeing a 62.5 percent increase in overall sales, with some pantry staples like frozen and shelf-stable goods increasing by as much as 207 percent. For a “just enough, just in time” system, a sudden increase in demand of this size has been overwhelming.

Food hoarding & shipping delays

On one end, you have too much demand from consumers. On the other, you have a decreased supply as global imports experience delays and complications. Most of the food we eat is imported to the U.S. from abroad as part of a well-established trade network. Just as COVID-19 has led many shoppers to stockpile their food, many nations are beginning to treat their domestic products the same way. This ‘food nationalism’ is only starting to take shape, but as the ramifications of COVID-19 continue to unfold, we can expect more countries to adopt stricter export policies. 

For countries still interested in participating in food imports and exports, closed borders and mandatory quarantines are creating an unusual shortage of shipping containers (the irony is not lost on us!). In late March, the availability of cargo containers at key ports in Europe and the U.S. was at its lowest, ever. This creates week-long delays, resulting in countless loads lost and even more strain on the global food system.

A CRUMBLING INFRASTRUCTURE

Workforce shortages

Our food system is built on the backs of factory workers, farmers, truck drivers, store clerks, and hundreds of thousands of other humans. In a pandemic situation that has over one-third of the global population on lockdown, workforce shortages will place the greatest strain on our food system.

Labor shortages interconnect with many other factors of life under COVID-19. Many workers have (and will) be quarantined after contracting the virus or coming in contact with someone who is sick. Beyond that, many healthy workers will have to take time off to take care of sick relatives or stay home with kids who are no longer in school. Some could even be prevented from working due to strict “shelter in place” and lockdown protocols. The closing of borders means that essential migrant workers from Mexico will be barred from the U.S, leaving many crops unplanted or unharvested. The bottom line is that without the labor, we will not only see severe decreases in productivity, but we won’t have the necessary people in place to get food from point A to point B.

“There won’t be anyone to harvest the crops...It will be devastating to growers and ultimately to the supply chain and consumers. They won’t have the food.”

Repercussions for the industry

The nature of the pandemic may also affect our relationship with the act of grocery shopping itself. As we mentioned earlier, grocery stores are central to American life. For many, they are a source of comfort–there is familiarity in the well-lit spaces and shelves stocked with your favorite brand, plus five or ten more to choose from. The pandemic has turned grocery shopping from a mundane task into an extreme sport. Suddenly, we have to avoid contact with others, track delivery dates, and worry about who may or may not have touched the item you are holding. 

All this leads to a degradation of trust between shoppers and their favorite store. Although the FDA and EFSA have cited “no evidence” that food can transmit COVID-19, shoppers remain suspicious. Much of the skepticism surrounds fresh foods like dairy, fruit, vegetables and meat products. More than ever before, consumers are conscious that the long, convoluted supply chain offers many opportunities for contamination. Add this to the likelihood of higher prices, growing shortages, and cyclical panic buying in the future, and it's easy to see why we need a better system.

The benefits of a distributed food network

A diverse and distributed network of growers and suppliers is essential to prevent these systemic pitfalls in the future. 

A DISTRIBUTED NETWORK…

Can pivot to meet increased demand

Small businesses are much more flexible. With less infrastructure, they are able to pivot faster and deliver food where it is needed. For example, small businesses are able to quickly convert their supply into ad-hoc CSAs and “drive-through” farmers markets when restaurants are ordered to close. This provides people with food while also ensuring inventory isn’t wasted. A large-scale distributor is less capable of making this shift, meaning that perfectly good food originally destined for restaurants can get “stuck” in the supply chain and cannot easily be repurposed for grocery distribution (which requires completely different packaging, certification, etc.). 

A DISTRIBUTED NETWORK…

Is not dependent on long-distance shipping

By featuring a variety of small local businesses, grocery stores can counteract the effects of a stressed national and international shipping network. Small, local, independent operators depend less on elaborate distribution channels. This means they can stay operational and viable even as shortages and shipping delays pile up elsewhere.

A DISTRIBUTED NETWORK…

Does not rely on a large workforce 

Just as small businesses can operate without large logistic networks, they also need a lot less human capital to produce their wares. The day-to-day life of most local food purveyors–farmers, butchers, bakers, beekeepers, brewers–are independent by default. This makes it easy for them to keep working even during strict social distancing mandates.

A DISTRIBUTED NETWORK…

Can maintain customers’ trust

Small, local businesses do not have the luxury of hiding bad practices behind a long and convoluted system. This kind of forced accountability creates transparency and bolsters trust in the community. Specifically, the ability to drive to the place where your food is produced (in non-quarantine times, of course) and look the maker in the eye essential for building meaningful bonds between suppliers, retailers, and consumers.

Freight Farms’ role in shaping a new food system

Here at Freight Farms, we're proud that our farmers are part of this alternative system. They are doing everything they can to keep their communities well-fed and healthy during the ongoing pandemic. Not only are they selling and donating highly-nutritious vegetables, but customers can trust that the food is safe. The container farm format keeps crops protected in an enclosed environment. Additionally, the Freight Farmers are the only points of contact between harvest and distribution.