Being well into the summer, we thought we’d take a moment to look at the challenges faced by an often under-appreciated branch of our industry: cold chain logistics. We might find it difficult to stay comfortable in the hot summer months, but it is the job of those involved in cold chains to ensure that the temperature sensitive cargo of their clients not only arrives safely but also fresh (if food or drink), or viable (if pharmaceuticals).
Cold Logistics turning into Gold Chains
A recently published report, titled “Global Food and Beverage Cold Chain Logistics Market 2016-2020” by Technavio defines a cold chain as “a temperature-controlled supply chain process used to maintain ideal storage conditions for different products and commodities.” The report details that cold chains,
…provide temperature-controlled warehouses for surface storage and refrigerated transport vehicles for physical distribution of products at optimal temperatures. It is used widely to store and transport fruits, vegetables, drugs and medicines without spoilage. Cold storage increases shelf life and maintains product quality.
As you can imagine, there are a lot of items that require a cold chain for it to arrive in a satisfactory/sellable state. This is why the global food and beverage cold chain logistics market is estimated to grow at a CAGR of 11.18% in revenue between 2016 and 2020, according to the report.
Cold Chains Turnaround for Emerging Economies
A researcher for the report noted that much of this growth is coming from emerging economies such as those of India and China, despite the industry still being in its developmental phase. This is the result of the high populations in each country. India’s tropical temperature also makes it one of the leading producers of food grains and food products worldwide.
Given the climate of some emerging economies, lack of proper infrastructure, the presence of minimal logistic support and lack of proper warehousing facilities, a substantial wastage of food products in these countries means that proper storage and cold chain logistics would greatly benefit these economies. Other factors affecting the need for proper storage and cold chain logistics include limited presence of service providers and lack of skilled workers.
The Technavio report goes on to state that:
According to the United Nations Environment Programme (UNEP) and World Resources Institute (WRI), about one-third of the food produced every year is wasted. Fruits and vegetables are products that are wasted the most; about 25% of them are wasted at the production level. In addition, perishable food products are often exposed to fluctuating temperatures during transit and handling, which adds to the wastage. The global population is expected to increase at a rapid pace in the future, which is expected to increase the demand for food products.
Although the cold chain market continues to grow, it isn’t without its hurdles. Lisa Terry highlights in her article of ten trends that are putting a damper on the growth of cold chain logistics.
Cold Supply Chains still shackled
Among the issues highlighted are that cold chains are becoming more global, there’s an increasing focus on quality and product sensitivity and the rising regulations in places like the EU. Other trends she notes are driver shortages and capacity restraints, fluctuating fuel pricing and subsequent mode shifting, and the industry drive to adopt better and upgraded technology
So while you’re busy trying to find some shade, or a place with the right level of air conditioning, remember the people whose job it is to keep things cool whether it’s ensuring that a bag of ice arrives intact to your local super market or life-saving medicine arrives where it is needed most. The world is a better place because of cold chain logistics.
That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.