GSCM - AA4899 - Tenth Assignment PDF

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Alessandro Ambrosetti

AA4899

JAMK – University of Applied Sciences

GLOBAL SUPPLY CHAIN – TENTH ASSIGNMENT

TRANSPORT - BANANAS

The choice I decided to study the distribution of bananas because I believe that could give interesting insights. Indeed this product is characterized by perishability, huge volume trade and mostly it is grown in Central and South America, involving intercontinental distribution. Moreover in order to have a point of reference I decided to introduce the distribution model for one of the most important bananas distributors, Chiquita.

Production Banana plants take ten months to grow from a sapling to a fruit bearing tree. The fruit is harvested four to five months later, while they are still green, in large bunches that can weigh up to 80 kilograms. They are then taken to a packing site where they are separated, washed, wrapped and boxed.

Chiquita’s distribution Boxed bananas are shipped overseas, they are kept cool (around 13° C) in refrigerated containers or bulk storage until loading on the ship and then during the entire ocean voyage, which lasts around four weeks. Once

they

arrive

in

port

they

are

transported to warehouses or ripening facilities near the location. From there they are transported to Chiquita’s or a retailers distribution centre. Finally they are moved to retail/grocery stores to be consumed.

Figure 1: Chiquita's distribution

Optimizing transportation In order to understand how is it possible to maximize the efficiency of bananas distribution I wanted to consider as reference their travel from South or Central America to Milan in Italy. First of all is fundamental to consider that we are considering an intercontinental trade, therefore it is just possible to choose between air or water transportation as a first mode of transportation. According to the volume of products demanded and the features of the fruit it is considerably convenient to use shipping as mode to reach Europe. Indeed, bananas are traded in huge quantities and are low value density products, so air transportation would result without enough capacity and also too expensive. Moreover bananas can be kept at a certain phase of their ripening process by controlling the temperature and humidity with refrigerated containers. For this reason it is better to use shipping as mode of transportation even if it requires a very long time. Therefore a good way to reach Italy could be to bring the bananas from South America to Genova’s harbour by water. In Genova, once the containers are unloaded from the ship, there are two choices to reach Milan: road or rail transportation. The two cities are not so distant, more or less 150km, therefore both the transportation modes could be fine. However, I personally believe that for reaching Milan could be better to exploit rail transportation, since there are the right infrastructures to do that and also the elevate demand promotes the use of such a mode. The main disadvantage of rail transportation could be the time required for the loading and unloading of containers from the ship on the train and then again after the train delivers them. Road transportation would be faster avoiding these long times, but would involve many trucks increasing costs and pollution. In conclusion, I believe that, since the time is not a critical factor, it is better to exploit the cheapest and less polluting mode, railways. Moreover, my idea is also supported by the fact that bananas need to finish their ripening process before they are distributed. So, if they are moved in huge quantities all together it is possible to centralize the ripening process into a single facility reducing also the costs for structures and increasing the exploitation of economies of scale. Once the ripening process is finished and bananas are mature, it is necessary to proceed with the last step of distribution, moving the products to retailers. For this last step the best mode is certainly the road transportation, indeed there are many retailers in the area and the requested quantity of each retailer can be easily managed by one truck. Therefore, it is better to exploit a mode that enables to reach easily each location, quickly (since now the fruit is mature) and without huge quantities.

Figure 2: multimodal solution for transportation

Conclusion In conclusion, the best way to supply Milan with bananas is to use intermodal transportation mixing shipping, rail and road transportation. This mix allow to leverage critical factors, as well as non-critical factors. Indeed the modes chosen for almost the entire travel are water and rail, that allow to maintain a low cost, which is critical for low value density goods , and also low emissions’ levels. At the same time, the time disadvantage related to the length of travel is compensated by the features of the product. Then road transportation is used only when the fruit is mature and time is critical, just for short distances. The final result is a system of multimodal transportation that makes distribution efficient, keeping the product profitable and maintaining the emissions low.

References https://www.chiquita.it/ https://ilfattoalimentare.it/banane-segreti-viaggio-maturazione.html https://www.arcgis.com/apps/MapJournal/index.html? appid=f4f7fb9e0e964ea1aad4f0550ccfe008#:~:text=The%20bananas%20continue%20to %20be,or%20a%20retailers%20distribution%20center....