Cold Chain process requires temperature-controlled supply chain as transportation of food is always needed. Growth rate and trend of consumer delivery of chilled and frozen products, was rapidly expanding before start of the pandemic, but arrow-shoots now. The spread of the virus caused operational changes across the cold chain. Food quality and safety by preventing spoilage are major concerns to achieve. Hence, it has become all the more necessary for service providers to invest in modern cold storage facilities, digitized vehicles, and system technologies. Now more than ever, the cold chain community feels to evaluate the lessons learned from the pandemic, and also the role that digitalization, automation and other innovations will play in the future.
A report, ‘Preserving the Food Chain’ outlines key protection and preservation technologies to help companies achieve significant reductions in both pre-consumer food loss and post-consumer food waste. Lux Research Analyst and lead author of the report, Harini Venkataraman, Ph.D., noted, “Preservation and shelf life extension technologies are key across the agri-food and health ecosystems, something the pharmaceutical and pesticide industries have long understood. We are now seeing innovation and new solution development across the food supply chain, from pre-harvest preservation technologies to post-retail and in-home storage solutions.”
Further, a recently published survey conducted by Global Cold Chain Alliance (GCCA) finds that demand for data and predictive analytics is expected in the future. GCCA members store over 260 billion pounds of perishable foods each year, with an economic impact of $6.1 billion annually. Jason Troendle, director of market intelligence and research at GCCA and author of the report ‘2020 COVID-19 Cold Chain Business Impact Survey Summary’ says, over 50% of respondents selected supply chain disruptions, keeping up with demand surge, slowdowns in food service, production and manufacturing hurdles – as the biggest challenges in the cold chain.
On a positive note, market disruption provides cold chain shippers, an opportunity for a critical role in the food supply chain. The changes also provided an opportunity to try new processes that, if effective, may remain in place after the pandemic is over. Surprising findings in this research reveal that 55% indicated some revenue loss due to the pandemic. Optimism prevails about the future of industry, with 57% believing the pandemic will increase the expected growth rate of the cold chain. The top priority is workforce protection and access to personal protective equipment and cleaning supplies.
Cold Chain challenge
The most obvious challenge that cold storage owners and third-party logistics providers (3PL) face are adequate temperature-efficient cold storage facilities and processes to ensure product quality and productivity. With the ongoing pandemic crisis, it’s good to learn new strides in supply chain management. Kathy Fulton, executive director of American Logistics Aid Network (ALAN) says, “Climate-controlled units and transportation services are always hugely valuable commodities, but especially at times like these when so many additional families need food.”
Cold chain market is estimated to account for a value of $203 billion in 2018 and is projected to grow at a CAGR of 7.6% from 2018, to reach a value of $293 billion by 2023. The rise in consumer demand for perishable food items, growth of international trade due to trade liberalization, and expansion of the organized food retail industry are some of the factors driving the growth of the market. Government support for infrastructural development in several developing regions also fuels the growth of this industry.
Globalization has increased due to trade liberalization, advancements in transport infrastructure and communication technologies in the food retail sector. It has boosted international trade in perishable foods. Every region or country exports food and agricultural products that it produces and imports food products that it is deficient in. This has resulted in almost any fruit, vegetable, or processed food being available at local supermarkets all the year round. Several forces drive and enhance the trend of perishable commodities trade at the global level.
Andre Patenaude, Director – Solutions Integration, Cold Chain, Emerson Commercial & Residential Solutions remarked, even the most resilient food supply chains are being challenged in ways never imagined before the coronavirus pandemic. At the same time, consumers, retailers and regulators are demanding more visibility and transparency into food’s entire journey — from meat, dairy and produce plants all the way through to dinner tables. The food supply chain is one of the segments hardest hit by the pandemic. Consumers quickly switched their buying behaviors from brick-and-mortar stores to online groceries. Spikes in demand and disruptions throughout the food supply chain led to acute shortages of certain product categories.
Energy costs concerns
High energy costs are a growing concern for cold chain providers. Energy costs are the highest in North America and Europe, followed by labor costs. Due to an increase in the number of refrigerated vehicles in North America and Europe, the main cause of concern for cold chain providers is the rising fuel costs and efficient management of fuel consumption, which depends on the type of product: frozen or chilled and the delivery route. Refrigerated storage capacities are growing in Asia Pacific countries due to the need to reduce wastage of perishable foods.
The new age equipment like wearable robotics can help protect workers. New grip technology allows robots to better grab products. Humans and robotics can work together for a more efficient warehouse. Armed with artificial intelligence, sensors and endless data, warehouses use cutting-edge robotics to close gaps in the supply chain as well as streamline operations and job functions. Robotics’ intervention and usefulness in the cold chain warehouse cannot be denied, especially during the Coronavirus disease (COVID-19) outbreak.
Kristi Martindale, chief customer officer and executive vice president, product strategy, Sarcos Robotics says, “Before COVID-19, the cold chain market experienced consistent growth year-over-year. And the market value in 2017 as $188.42 billion is estimated at $269.61 billion by 2024. As a direct result of COVID-19, U.S. consumers increasingly purchase their groceries online for either D2C delivery or BOPIS (buy online/pick up in-store). Because of this surge in grocery e-commerce, the cold storage market, along with the food industry at large, is facing significant disruption, growth opportunity and unique challenges. Robotics optimizes the hard-freeze process by improving speed, consistency and waste reduction, while automated storage and retrieval systems (AS/RS) enable higher storage density within cold storage warehouses to mitigate the surge in demand”.
Online grocery shopping
Refrigerated vans are always essential. Coronavirus has helped to push refrigerated vehicles to the forefront. As lockdown restrictions lessen, more and more people will naturally be returning to stores and carrying out their purchases in person again. The numbers of people are still remaining in isolation either by necessity or choice. Moving grocery shop online and having delivery drivers make rounds could actually mean that there are fewer cars on the road.
Here, coming across an example while exploring sites, following is worth sharing: “Imagine 10 families each getting in their cars and driving their 10 different routes to get to supermarket, and then loading up the cars and driving back again. Now imagine 1 delivery van making a loop around these 10 houses and returning to their point of origin. In this instance the same amount of food has been transported from store to home, but only 1 vehicle has made the journey, with the weight of only 1 or 2 people inside. There is a good chance that the overall journey was longer than any of the individual journeys, but it will undoubtedly be shorter than the 10 combined.”
The online store would also reduce the amount of wasted energy that goes into lighting, heating, cooling and maintaining oversized stores.
Trends in cold chain management
Cold chain supply sector is constantly evolving. The 2020 figure for buying groceries online is expected to show an uptick. With increased online demand, there is need for longer delivery routes and the need for mobile refrigeration. An online grocery store could also eliminate huge amounts of waste both in packaging, and in the amount of food destroyed, each and every day. Packaging needs to be more focused on efficiency than attraction. When people change their consumption patterns, suppliers of cold chain products have to adapt the changing needs, so must do the cold chain management operations as well. Some other ongoing trends are:
Last mile delivery: Freight companies are adapting to the need of getting consumer orders delivered at their doorstep by offering last mile delivery as an added service. In the context of supply chain management, the term “last mile” is used to
refer to the final step of a product’s journey from the warehouse shelf to the consumer’s doorstep, eliminating the need for retail intermediaries.
Less than truckload transportation: With this solution, companies that sell food and pharma products, no longer have to pay for an entire trailer or full truck to deliver their shipment to the consumer market. All they need to do is to pay for the amount of space they use.
GPS technology: Businesses that deal in cold chain products want to know that everything is going on as planned and that the shipment will reach its destination on time. Even with refrigeration systems in place, temperature-sensitive products don’t last forever. Hence, delays in the delivery of certain food and pharmaceutical products can lead to huge losses.
Essential medical supplies: The cold chain shipment isn’t kept cold at every link of the chain, which is detrimental in the case of shipping vaccines, pharma products, and essential food items. Vaccines, when become defective and unsafe, need to be re-manufactured to protect the population. For cold chain logistics to be successful, qualified staff must be used at every step of the process, including storage, packaging, condition monitoring, and transport.
Origin and handling of food: The impacts of the pandemic increased the urgency – as the consumers want to know more about where their food comes from and how it’s been handled. According to Dan Crossley, executive director for Food Ethics Council, the question businesses should be asking is, “If our customers could see everything about how our food is produced, distributed, stored and sold, would they still want my product?” One way to answer this question is by improving cold chain integrity.
New normal: Verify food in-transit: The supply chain begins at the point of harvest and continues through processing, cold storage and distribution — all before the food ever begins the last-mile delivery to a store, restaurant or consumer. The pandemic exposed areas of the global food supply chain that is susceptible to disruption by rapid changes in consumer behavior as well as food safety concerns. Food must be resupplied faster and kept fresh longer. Building these capabilities along with resiliency into the supply chain will require even more focus amid new normal. Those efforts will begin with the implementation of cold chain technologies that enable businesses to verify the condition of food at any and every step in its journey from producers to consumers.
Online delivery specialism
Every temperature-sensitive product requires specialised handling to maintain its integrity along the cold chain. The control, connect and communicate is the answer to ensure efficient cold chain management. There are regulations and guidelines that industry regulators set for shipping companies to follow throughout the cold chain supply. With lockdown, importance of the online world has been thrown into the spotlight. Working from home becomes the new norm, and businesses like Amazon becoming ever more essential. As the online shopping has proven to be the more efficient way to sell goods to wider audiences, the supermarkets could move large portions of their trade online.
Refrigerated technology is playing a huge role right now. The need for temporary cold storage—whether in refrigerated trailers, containers or available warehouse space has increased during the pandemic. There is need to move to more open and collaborative approach, since the cold chain involves maintaining a desired product within a specified low-temperature range from harvest/production to consumption. Even greater need is to go all-out for energy efficiency strategy, which may make fitting use of artificial intelligence’s latent potential in cold chain. The future demands using renewable energy and recycling waste energy into useful energy. Just to ponder- could the ‘New Normal Future’ will be the start of food shopping moving all online, while adapting to new ways of working into newer strategies.