Cold Chain

How Global Cold Chain Logistics functions across the globe

Post By : Koyel Ghosh
Post Date : June 21, 2021
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Reading Time: 3 minutes

Global cold chain logistics management is extremely important for worldwide commerce. A supply chain is a system of multiple networks which involves organisations, people, activities, information and resources in order to deliver a product or service from the respective supplier to the end customer. A cold chain is concerned with a temperature-controlled supply chain to transfer sensitive products of pharmaceutical drugs, biological products and commodities of food industry which require a continuous series of refrigerated production, proper storage and equipment related to distribution activities to maintain low-temperature range.

Even though every shipment is different because of different circumstances, an efficient cold chain ensures lesser chances of compromising any shipment. Cold chain logistics gather all the insights, visualize the shipping networks and calculate specific risks even before the product is shipped. Thus, logistics in the cold chain plays a vital role in decision making with greater accuracy, resulting in better outcomes.

To ensure high quality of goods, the foundation of cold chains should be built on certain parameters such as safety, quality of global standards, enhanced efficiency, and investments. A slight rise or fall of temperature during any supply chain phase can lead to microbial growth and textural degradation and the logistics keep a daily record of temperature reading in the cold chain, especially for the perishable goods as they are very sensitive. The cold chain logistics is a bit expensive system as it requires special packaging and storage infrastructure.

Product categories in the global cold chain logistics market

There are three types of food products in global cold chain logistics market such as perishable goods, semi perishable goods, and non-perishable goods.

  • Perishable goods represent foods like fruits and vegetables, dairy products, eggs, meats, fishes etc. which have high moisture and get to deteriorate easily within a short span of time if kept at room temperature. So, they need immediate storage at a specific temperature to avoid spoilage, such as, for chilled storage the temperature is maintained between -1 to 12°C whereas frozen storage maintains a temperature below -18°C.
  • Semi perishable goods include things like cereal and pulse products, onions, potatoes, bread etc. which do not require instant refrigeration but still have a limited shelf life.
  • Non-perishable goods, on the other hand, are dried fruits that have no moisture at all, require no refrigeration and yet have a long shelf life.

Apart from food purposes, the cold chain logistics are also used in transferring pharmaceutical medicines and biological products like drugs, vaccines, antibiotics, hormones, blood and blood components etc. These products are extremely temperature sensitive and require precise temperature standardization to ensure efficiency.

Scope and Challenges:

At the same time, the world’s population is increasing rapidly due to medical advancements and agricultural productivity. This in turn, has raised the demand for perishable goods among consumers across the globe. Thus, the increasing need for the perishable goods has led to the growth of international trade owing to trade liberalization. Accordingly, there’s been a steep hike in the need for temperature control to prevent food losses through the cold chain logistics.  

However, in many countries throughout the world, inadequate cold chain logistics has had a direct impact on their international trade.  Similarly, the other factors like lack of awareness about handling temperature sensitive tools by the stakeholders, lack of standardization, poor transport facilities, high operational cost, and lack of adequate enabling infrastructure such as roads, drainage, water supply, power supply, etc. have caused challenges to some extent.

Nevertheless, with numerous strategies followed by the government and other private market players, the market is anticipated to witness an increase in the number of refrigerated warehouses, processed food sectors and growth in the pharmaceutical sector, which sequentially, can gather huge prospects and exponential growth of the cold chain logistics trend in the near future. According to a report published by Allied Market Research, the global cold chain logistics market size is projected to register a significant CAGR from 2019-2026.

COVID-19 impact on the global cold chain logistics market

The outbreak of the pandemic has led to the implementation of lockdown, which gave way to several trade restrictions. This in turn, has significantly hampered the supply chain management of every industry across the globe. In the food industry, however, restricted trade has resulted in food manufacturers emphasizing not only on food products but also on their storage to increase their shelf life. This has, eventually, given a promising rise to the adoption rate of packaged food & beverage products among consumers, which successfully, has encouraged the demand for cold chain warehousing in many countries. This way, the pandemic situation has had a mixed impact on the cold chain logistic market and can further propel the demand for cold chains in the near future.

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