As the civilization is progressing at a rapid pace, the need for transportation of perishable items is also increasing at an equally fast rate. New places are being created for human inhabitation, access roads are being constructed and supply of perishable items is also starting there. Now, to ensure smooth supply of perishable food items, medicinal & clinical products and other temperature-sensitive commodities, the need for creating robust cold (supply) chains is becoming essential.

However, planning a robust, sustainable, and especially environment-friendly cold chain is not so easy, there are multiple challenges involved in setting up and efficiently controlling cold chains. Also, although there are many similarities, a bit customization is needed everywhere depending on the area, time, distance, road condition, type of fleet etc. And as building a sound cold chain needs a good amount of investment, this segment of supply chain is still in need of much greater attention.

Fortunately, in the last few years, vast development in technology has paved the way to address almost all the challenges, and now with the right combination of planning, designing, investment and infusion of technology – it is possible to establish an ideal cold chain.

What is a cold (supply) chain market?

In fact, the term cold chain involves several activities. According to ReportLinker’s (an award-winning market research solution firm) concise statement, the cold chain market consists of sales of cold chains and related services by entities (organizations, sole traders, and partnerships) that provide cold chain storage services. These services are used for the management and transportation of temperature-sensitive products through refrigeration, thermal packaging, and other methods.

This plays a crucial role in temperature control for the perishable goods and assures the quality and health of the perishable goods to the final consumer across the distribution chain.

The main types in the cold chain market are refrigerated warehousing and refrigerated transport. Refrigerated warehousing or cold storage is a place where temperature-controlled goods are cooled or stored to prevent them from decaying or not adhering to laws and regulations that apply to that item.

The various temperatures used in the cold chains include frozen and chilled. Cold chain storage is used in different sectors such as pharmaceutical, healthcare, food & beverages, chemical, other industrial verticals.

Global cold (supply) chain market trend

According to ReportLinker, the global cold chain market is expected to grow from $239.67 billion in 2021 to $269.1 billion in 2022 at a Compound Annual Growth Rate (CAGR) of 12.3%. The market is expected to grow to $376.06 billion in 2026 at a CAGR of 8.7%. North America was the largest region in the cold chain market in 2020. Asia Pacific region is expected to record the fastest growth over the forecast period 2022 to 2026.

Growing consumer demand for perishable foods contributed to the growth of the cold chain market in the historic period. The demand for perishable foods such as dairy products, fruits, vegetables, and meat is growing with the increasing urban population and changes in the eating habits of the populace.

Consumers are shifting towards the purchase of perishable goods that have a long time until expiration owing to the nature of perishability. Developing markets in the Asia Pacific and Latin America are observing high demand for perishable food products.

Examples of a few recent good initiatives

Maersk: Around three months back, Performance Team (a Maersk company) has declared its plan to set up a new cold storage facility for Ridgeville, South Carolina to serve temperature-controlled goods. The facility will be operational by the first quarter of 2023.

As per the available information from the company, the new facility will offer a strong value proposition to customers through supply chain simplification benefits, cold storage solutions, refrigerated inland trucking, blast/quick freezing, USDA meat inspections, boxing/repacking, and other value-added services.

The strong population growth near Charleston (the U.S. Southeast where Charleston is located is the fastest growing region, 25% faster than the second fastest region, the West) provides much needed capacity for shippers. The new site will reach 80 million consumers within one day and 225 million consumers within two days.

The new site will comply with the company’s cold storage building sustainability standards. It will be certified LEED Gold and have rooftop solar, a CO2 cascade refrigeration system, LEDs and smart lighting, low-flow water devices, rainwater recapture, electric car charging, and use a virtual power purchase agreement for clean power to offset any grid power consumption.

Investment will add more capacity to improve cold chain efficiency and enhance supply chain competitiveness…
Photo: Maersk

Thermoking: According to the available information from the company, last month, Thermo King, a leader in transport temperature control solutions and a brand of Trane Technologies, has completed initial testing of its innovative ‘evolve’ electric trailer with retailers Walmart and Loblaws, and Martin Brower, a leading supply chain solutions provider for restaurants around the world. During more than 2,500 hours of operation, the battery-powered refrigerated trailer unit delivered excellent performance, ensuring high quality climate control to keep food and other goods fresh. With zero direct emissions, Thermo King’s electric trailer technology can help in significantly decarbonizing the cold chain.

The company’s all-electric portfolio, branded ‘evolve’, will include electric refrigeration solutions for truck, trailer, rail, air and marine transport in the North America, Latin America and Europe, Middle East and Africa (EMEA) regions. The evolve portfolio aligns with customers’ goals to transition to more sustainable solutions for their fleets, and will help advance Trane Technologies’ 2030 Sustainability Commitments, including its Gigaton Challenge to reduce customer greenhouse gas emissions by 1 billion metric tons.

The company already offers fully electric products such as the E-200 for middle and last-mile delivery, and the TE-18 and Athenia all-electric HVAC units for public bus transit.

During more than 2,500 hours of operation, the battery-powered refrigerated trailer unit delivered excellent performance…
Photo: Business Wire

The Indian scenario

National Centre for Cold-chain Development (NCCD) has been established to promote and develop integrated cold-chain in India for perishable agriculture and horticulture produce including perishable from allied sectors. The main objectives of the centre are to recommend standards and protocols for cold-chain infrastructure, suggest guidelines for human resource development and to recommend appropriate policy frame-work for development of cold-chain.

According to National Centre for Cold-chain Development, India has added about a million tons of cold storage capacity over the last three years and reached a total of 36.7 million tons in 2019. This can be connected to urbanization, changing tastes and decisions, and the rising disposable income of consumers in these countries. Thus, growing consumer demand for perishable foods supported the cold chain market.

According to ResearchAndMarkets, the cold chain market in India was valued at INR 1.54 Trn in 2020 and is expected to reach INR 4.09 Trn by 2026, expanding at a CAGR of ~17.80% during the 2021 – 2026 period.

Also, several initiatives undertaken by the Indian government have helped in developing and improving cold chain systems in India and providing an impetus to the market. In 2020, the Indian government approved 27 integrated cold chain development projects under the Pradhan Mantri Kisan SAMPADA Yojana. However, the high operating costs of cold chains and lack of standardization are some of the factors hindering market growth.

By P. K. Chatterjee (PK)

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