Why to consider natural loss
Natural loss rates are traditionally used by the accounting department to reduce the tax base and are written off after inventory, in accordance with regulations approved by government authorities in the country or region where the company operates.
Knowing the volume of losses due to natural weight reduction is meaningful not only for accountants. This information can help managers, employees responsible for warehousing and logistics better understand the reasons for product shrinkage and find ways to minimise them.
A significant discrepancy between the volume of losses and the natural loss rates indicates the presence of one of two main problems:
- Inappropriate storage conditions. Most vegetables and fruits should be stored at temperatures close to 0°C and a relative humidity of 80%. High temperatures and dry air contribute to the rapid wilting of fruits and vegetables causing significant weight loss. The implementation of Controlled Atmosphere technologies in storage rooms will help reduce product shrinkage to a minimum. FRUTLINE SP. Z O.O. warehouses are equipped with CA enabling to adjust the temperature and humidity parametres.
- Internal and external theft of goods. If fruits and vegetables are appropriately stored in cold storage rooms, but the losses are much higher than the natural loss rate, it is worth thinking about strengthening control over financially responsible persons, employees who have access to the goods and accounting documents, and implementing surveillance systems and access restrictions.
Knowing the established norms of natural loss and comparing them to the actual losses during transportation helps to analyze the efficiency of transportation, select suitable containers, packaging and transport for the delivery of products via 'manufacturer-warehouse-buyer' logistics chain.
The day after harvesting many vegetables (beets, carrots, zucchini, etc.) and fruits (apples, pears, etc.) lose from 3 to 9% of their mass, while fresh strawberries – up to 50% of the original quality, if they are in natural environmental conditions (temperature is higher than 15°C, relative humidity – 30-60%). Fast delivery to cold storage room helps avoid these losses and preserve the original appearance of the product. For example, strawberries should be cooled no more than 1-1.5 hours after they are picked, and cherries and black cherries – 4-5 hours.
The natural loss during transportation is the reason for the discrepancy between the mass stated in the support documentation and the actual weight on arrival. In case the losses are within the established norms, the customer has no legal grounds for making claims to the supplier. A discrepancy that is much higher than the norm is a reason for issuing a claim to a counterparty or carrier. Other reasons for discrepancy of the mass include underweight during shipment, active evaporation of moisture due to high outside temperature, dry air, drafts, excessive shaking during transportation, violations of the transportation conditions.
FRUTLINE SP. Z O. O. cooperates with reliable logistics companies that ensure fast and careful delivery of products to our customers.
How to calculate natural loss
Actual losses are determined by the results of the inventory or during the receipt and transfer of products after shipping. The natural loss is calculated for each product and its varieties individually.
The intensity and volume of loss depends on the evaporation capacity of a particular type of product. For example, berries (strawberries, raspberries, blackberries, blueberries), greens have much higher evaporation capacity than pears, apples or potatoes. As for summer varieties of apples with a delicate, thin skin (Early Geneva, Paula Red) they lose moisture faster than winter ones (Red Velox, Champion, Red Chief, Red Cap) with a visible waxy coating on their surface.
The volume of the natural loss is also affected by the shelf life of products, the climate of the region, the time of year (during the winter months, the intensity of respiration and metabolism processes decreases), and storage conditions.
You can see the natural loss norms under different storage conditions in the relevant acts issued by the Ministry of Agriculture of a particular country. These standards are updated every few years, as new commercial varieties for long-term storage appear and warehouse technologies are being improved.
Which losses do not relate to natural losses
Fruits spoiled due to mechanical damage, wilted, rotten, affected by pests, fungi and diseases, are not considered to be natural losses and are not included in the concept of natural loss. They relate to technical drawbacks, irregular products, and non-recoverable losses.
FRUTLINE SP. Z O. O. analyzes the volume of natural losses in its warehouses on a regular basis to improve storage technologies and logistics operations. Become our partner and get high-quality, fresh fruits and vegetables with timely and careful delivery to your region.