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Cold chain is a combination of temperature-controlled surface transport and supply chain. It refers to the freezing solutions planned to maintain the quality and shell life of the products, such as fresh agricultural produce, seafood, frozen food, photographic film, chemicals, and pharmaceutical drugs.
Temperature-controlled transportation covers a broad spectrum of temperature ranges, including controlled room temperature (CRT, which refers to 15°C to 25°C/ 59°F to 77°F), refrigerated (2°C to 8°C/ 35.6°F to 46.4°F) or even cryogenic (below 0°C/ 32°F).
Cold chain logistics plays an important role in reducing the wastages of the perishable products and commodities overall providing remunerative prices to the farmers. For the pharmacy industry, cold chain logistics plays an important role in increasing the efficacy of the drug throughout the supply chain to the end consumers.
In the cold chain logistics market, the major technologies that are used to provide a temperature-controlled environment during transportation involve dry ice, gel packs, Eutectic plates, liquid nitrogen, quilts, and reefers.
Dry ice (solid carbon dioxide) is around -80°C and has the capability to keep the shipments at a low temperature for an extended time. Major share of medicinal and pharmaceutical shipments is classified as chilled products, which are required to be stored in the range of 2° and 8°C.
( Million m3)
Cold chains are essential to sustain the quality and extend the shelf-life of perishable products, such as seafood, chemicals, frozen foods, and medicinal drugs.
Gel pack which consists of phase changing substance that can go from liquid to solid and vice versa is a common method to provide low temperature. Eutectic plates also known as cold plates work on the same principle as gel packs.
Instead, liquid used in these plates can be reused many times. Liquid nitrogen is mainly used for the transportation of biological cargo such as organs and tissues. It is very important that the refrigeration units are designed to maintain the temperature within the preferred range and avoid variation in the temperature. As any deviation would hamper the cold chain logistics market growth.
New therapies, such as gene therapies and regenerative therapies, and the rapid shift toward temperature-managed shipments, are in the spotlight currently. Additionally, many of the most innovative therapeutics, like advanced cell-based therapies and other regenerative medicines, are close to a commercial launch, and the need to be shipped under very exact temperature conditions is created, which shows a huge demand for the cold chain transportation facilities.
As per top industry sources, the growth of temperature-controlled products is more than twice the rate of non-temperature-controlled products. Most of the companies are showing interest in handling the growing needs.
There have been significant merger and acquisition activities between the LSPs and the medical logistics companies to provide integrated solutions to the clients.
For instance, UPS acquired Marken, a global supply chain organization in the life sciences industry. Another example is the acquisition of Unitrans by Quickstat.
In the cold chain logistics market, intermodal transportation of goods requires dedicated storage yards on the transport terminals, namely ports, which accounts for around 1-5% of the total terminal capacity and can be higher in the region with an important reefer trade such as Philadelphia region.
The task is labour dependent as each container should be plugged & unplugged manually and monitor the temperature inside the reefers should be monitored regularly. Reefer stacking areas are usually dependent on the three approaches such as wheeled storage, stacked storage, and rack storage.
Top impacting factors:
Approximately 90% of third-party logistics respondents intend to expand their cold chain capabilities and service offerings. The demand for cold chain services is so great that obtaining suitable, cost-effective services is difficult.
Global population expansion, rising consumer demand for fresh items, strong supermarket e-commerce sales, and a wider variety of perishables are pushing the demand for cold storage space. There is a growing need for more specialised services.
Even if temperature-controlled trailers aren’t required, some shippers are opting for cold chain services to extend product shelf life. Cold chain services that aren’t mandated by regulations are becoming more popular among shippers. The extra cost of cold chain services can be justified by the increased shelf life.
As order quantities fall, centralised pallet and case warehouses upstream will begin to expand their operations to include individual item picking or break packing. The continued change of the retail landscape, as well as manufacturers shift to direct-to-consumer sales, will drive this trend.
SKU expansion and smaller store formats in retail and food are limiting shelf space and driving retailers to carry less inventory per SKU while maintaining or growing overall SKU count. Grocers and merchants will find it difficult to accept cases of slower-moving products at the store level, and will instead have to push for single-item replenishment.
Manufacturers, on the other hand, see the potential of e-commerce and will need to assist their entry. Simultaneously, manufacturers are recognizing the e-commerce possibility and will need to enable their entry into B2C from their centralised warehouses by adding item handling capabilities.
As a result of integrating new procedures and technologies to enable effective item picking, many warehouses will be transformed. In warehouses that previously only supported bulk handling of products, goods-to-person technologies such as cube-based automated storage and retrieval systems and mobile autonomous robots will find a place.
This pattern will hasten the implementation of robotic item picking systems. Newer generation robotic picking solutions are broadening the range of products that can be picked while also providing the best operational reliability, thanks to more advanced grasping and vision technologies.
During the year 2019 the highest market share was with North America; second highest share was with the Asia Pacific region and the least was with the Latin America region. But if we look at the population density, it is quite known that the Asia-Pacific region and the Middle East & Africa has the most population and according to it the market share is not quite justified.
The global cold chain logistics market is estimated at $XX Billion in 2021 growing at –% CAGR till 2026.
The pandemic has created growth opportunities within the cold chain industry, resulting in propelling the demand for cold chain outsourcing, refrigerated transportation, warehousing and many other areas that quickly became amplified immediately following the pandemic lockdowns.
While the restaurant/food delivery services suffered, the accelerated demand for packaged food, fuelled by the shift to the food retail environment more than offset the restaurant segment downturn.
This shift also impacted the supply chain planning process for ensuring that delays in the supply chain could be absorbed by higher demand for cold chain storage and longer dwell times for source to shelf cycle times.
Large food retailers experienced a surge in sales by upwards of 20-30% during the peak of the pandemic lockdown periods. Some of this was due to the run on key cold commodities, food purchase stockpiling and the increased demand for food because of the stay at homework environment.
International movement of refrigerated products continues to be delayed as a result of the pandemic. With the advent of new foreign food inspection regulations, port congestion, reefer container shortages and port congestion being the nemesis of expedited food delivery, cold chain storage has been a hot growth area.
Investment in cold chain storage and refrigerated food conveyance is on the top of the charts for investors with double-digit growth projections for the next few years.
The market is at an all-time high right now due to the demand for food and pharmaceuticals. Because of this, innovations of ways to keep the quality and freshness of products are coming up very frequently. The goal is for the products to reach the consumer’s rising demands.
Food and pharmaceutical products usually have the shortest shelf life. Aside from continuous innovation in prolonging their products shelf life, one of the biggest concerns of manufacturers is logistics. For the products to reach the end consumers in their optimal state, they must be stored within their temperature requirement. To make this possible, the manufacturer must also invest in capital-intensive and energy dependent equipment.
Companies specializing in temperature-controlled packaging use single-use or reusable packaging. There are new refrigerated shipping systems that have no more use of gel coolants. Furthermore, compared to typical cold chain packages, they weigh much less. These systems have the kind of technology that is evaporative and reactive cooling. With this type of technology, it can respond and adjust to fluctuating temperatures.
Traditional packaging is starting to become a thing of the past. This has become more evident due to significant innovations like evaporative cooling technology. Even simple things like adding handles or straps to packaging contributed to this result. Being the most innovative packaging company is the goal of many companies nowadays. It gives them the competitive edge to be the type of packaging company that best fits your cold chain needs.
Stricter regulations on shipped products are another development in the cold chain industry. The number of cases about food safety and pharma counterfeits has been rising. This, along with globalization, has prompted governments to take action regarding regulations. Production and cold chain have been re-evaluated.
The Food and Drug Administration’s Food Safety Modernization Act marks the beginning of these rules. The act’s purpose is that anyone in the food supply chain is required to document the process. This means every step of the process.
To help mitigate their cold chain issues, manufacturers are strengthening their processes in-house. When shipping through a cold chain, safety is a must for the manufacturer.
In the pharmaceutical supply chain, cold chain logistics plays a huge part. The cold chain is needed for manufacturers of these vaccines and medications. It is important to prevent damage to the expensive drugs, and things must run smoothly. It is also imperative that pharmaceuticals must arrive as good as new.
Medicine that has sat in incorrect temperatures for long periods can be ineffective. What is worse is that it can even harm the health of the patient. That is why in a cold chain, the quality of products must not be compromised to satisfy the consumer.
The food industry has a rising demand for fresher and higher-quality products. And this is one of the biggest trends in the cold chain. Peaches must be juicier, and avocados must be riper according to the consumer’s wants.
Quality products don’t just end at fresh food. Taking the pandemic into consideration, people want to ensure that the vaccines being used are safe for them to be put into their bodies. Furthermore, there has been a growth in the number of biological drugs and gene therapies. Due to this, as an effort to meet the demand, companies are also widening their capacity for temperature-controlled transportation.
