Cold Chain Logistics

Have you ever imagined how fruits from other countries reach your house still staying fresh or those emergency drug is made available to critical patients at various hospitals across the globe or remote destinations without compromising their quality or contents?
Ice creams which we all love during a hot summer day or just to cool things down are manufactured at mega factories outside the city, they travel through that scorching heat across many miles yet they reach our supermarkets just as they left the factory and not end up becoming ice cream shake. They are many other examples that we can look at that needs a meticulous logistics planning ensuring our daily dose of milk to chocolates maintain their form or doesn’t get spoiled during the whole supply chain or logistics process they are subjected to.
All these highly perishable products/ commodities need a different kind of logistics which involves temperature control or they need to be carried across the whole logistical chain by an uninterrupted temperature controlled process. Cold chain logistics as it is called is a temperature controlled supply chain. It is used to extend and ensure the shelf life of products such as pharmaceutical drugs, fresh produce, meat, etc. Cold chain logistics is a series of storage and distribution activity that is fully temperature controlled or maintain a particular given temperature range. Maintaining cold chain product integrity across the entire supply chain demands rigorous processes and cold chain expertise. Given the pharmaceutical industry’s strong pipelines for personalized medicines, the demand for a cold supply chain has never been greater.

What has changed or what has given rise to the demand for cold chain logistics? To be honest it is you and I who are driving these changes. The world is getting smaller and in this digital age of information and online services, consumers are traveling further abroad and experiencing new exotic cultures, foods, and ingredients.We are all shopping more for convenience now. Whether that means purchasing online and having the items delivered to our homes, or collecting our order from a local store, we’re ordering more fresh and chilled products in smaller quantities from a larger selection ground. As a result, it’s driving a proliferation of new products, product changes, packaging updates and order requirements. These changes to our shopping habits, along with purchasing innovative products, are causing retailers/ supply chain vendors to adjust how and what they order, which means that producers are changing how, what they produce and how is it shipped to meet the ever changing consumer demands. With the advent of food delivery service wherein deliveries of products such as ice creams are even delivered to your door step without compromising the quality or they being delivered to your household as ice cream shake. Cold chain logistics is revolutionizing our ingenious shopping and all our incessant demands to live a healthy lives by making pensive decisions.Health-conscious consumers have discovered the nutritional advantages of frozen vegetables and fruits to be easy-to-use key components to a healthy family menu. “Waistline watchers have found a friend in the numerous low-fat frozen food offerings,” the Frozen Food Foundation points out, “while the economically conscious continue to value the diversity of frozen food possibilities that tempt the taste buds without breaking the bank.”

The future of cold chain logistics is always in transition: from growth to slow-downs, modified trends to shifted needs from customers. After two considerably slow years for the industry in 2014 and 2015, shipping providers are eager to see a new era for logistics.That new era might be closer than we think: the Council of Supply Chain Logistics released its 27th Annual State of Logistics Report and suggested a shift to a more sound logistics industry. The report documented the positive changes in the logistics market from last year. This showed providers it may be time to accommodate accordingly.Currently, refrigerated containermake up 7% of all total container volumes. Demand has increased annually over the last five years, however.Containers including reefers move about $4 trillion worth of cargo annually, the Wall Street Journal reported. There will be a continued demand for more variety of fresh or chilled products that are convenient, perhaps individually wrapped and at more temperature breaks. Service providers will take on even more value-added services and include aisle ready and friendly product preparation and category breaks (e.g. the non-mixing of SKUs, such as no meat with dairy.) Furthermore, the demand for organic products will continue, and with it, probably category separation and multi-temp trailers.
Indian Cold Chain industry is expected to grow annually at 28% the total value of cold chain industry in India is expected to reach ~USD 13 billion through increased investments, modernization of existing facilities, and establishment of new ventures via private and government partnerships thereby, presenting a great opportunity for foreign companies. Cold stores are the major revenue contributors of the Indian Cold Chain industry and are majorly used for storing Potatoes. However, the market is gradually getting organised and focus towards multipurpose cold storages is rising. According to industry estimates, approximately 104 million metric tons of perishable produce is transported between cities each year and key growth drivers include meat products export, rising demand for confectionary, frozen food etc.
The Government of India recognizes that development of cold chain logistics is an essential next step in upgrading India’s food processing industry and therefore offers many incentives for promoting growth.The Indian market is witnessing a transition from traditional cold storages to fully integrated cold chain projects which would bring about efficiency and increased productivity of cold chain companies; withfavourable government initiative such as subsidy schemes for setting up a cold storage facility and purchasing standalone reefer vehicles and SAMAPADA Scheme will support the development of cold chain infrastructure. Moreover, major dairy companies, retail chains and online grocers have received federal approval to set up 101 cold chains which will bring in an investment of INR 3,100 crore in the sector. Such developments and growing investment from public and private sector is projected to propel the market revenue.

By,
Dr. Ajay Sanker
Director
Laurus Institute

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