Cold Chain – Why Is It Growing So Fast?

The Cold Chain is Booming

Between now and 2020, the cold chain is predicted to grow 15% CAGR according to industry analysts. It is growing much faster than the world’s economy and the rest of the logistics sector.

So what exactly is the cold chain and why is it growing so fast?

Cold Chain – A Brief Overview

A cold chain is a temperature-controlled supply chain for perishable food products, pharmaceuticals, and chemicals in order to maintain their quality and increase their shelf-life.

A cold chain is essential because it:

  • Reduces food loss due to spoilage
  • Enhances food safety and quality
  • Balances and manages the supply and demand of food

Cold chain infrastructure consists of:

Pre-cooling facilities. Pre-cooling is the removal of heat energy from crops, known as field heat, after they are harvested. Pre-cooling is typically done soon after harvest. Pre-cooling reduces spoilage and slows ripening.

Refrigerated storage refers to the storing of goods in a reduced temperature atmosphere. Heat is removed from the storage container or room to help keep goods cold. Refrigerated storage helps prevent spoilage of foods and other items meant for consumption.

Refrigerated transport is a form of climate-controlled transportation which is designed to maintain a cool or frozen temperature, depending on the product being transported. Refrigerated trucks, sometimes called “reefers” are the most commonly used refrigerated transport. Other refrigerated transportation modes include airplanes, ships and railcars.

Packaging is another key component. Cold chain packaging is specifically designed to help maintain a reduced temperature. Cold chain packaging is sometimes insulated and or thermal.

Information management systems are transforming the cold chain by providing route optimization, warehousing and shipping documentation, key performance indicators, scanning equipment phone apps and the ability to turn data into actionable insights. Now, IT systems are capable of providing real time data and alerts when a warehouse or truck rises above a certain temperature.

Why Is Cold Chain Growing So Fast?

Globalization. As international trade grows, perishable foods, drug and chemicals are being traded and transported around the world. The cold chain has grown to support global commerce. Traveling long distances, border delays, customs and extra handling has forced cold chain professionals to get more effective and more efficient.

Innovation. Technological advancements in cold chain storage and transport is making cold chain less expensive, and more accessible. The cold chain is also getting more tech savvy with new developments in sensors, monitoring equipment, scanners, and software.

Consumer demand. Consumers are buying more fresh and frozen food, which has driven the demand for more cold chain capability and capacity. Additionally, drug and chemical companies are also using more of these services for their products. Consumers are also increasingly interested in supply chains. They want a transparent, clean, ethical supply chain, which should also help increase the demand for cold chain services.

Emerging market growth. As emerging markets like India, China, Mexico, Brazil, etc. become wealthier, they are buying more cold chain services. Today, approximately 40% of cold chain services are used in the United States, which has only 5% of the world’s population. This proportion will soon change as the cold chain companies seize new opportunities in Asia, Latin American and Africa.

Federal Regulations. In 2011, the Food Safety Modernization Act (FSMA) was signed into law by President Obama. This law raised the bar on food safety for anyone growing, processing, storing, distributing, transporting or selling food in the USA. This law also applies to the 20% of food consumed in the USA, but imported from outside the USA. As companies in the food supply chain scramble to become FSMA compliant, more cold chain services will be utilized.

Shameless Plug: If you are interested in the FSMA, please consider attending my upcoming webinar: Food Safety Modernization Act (FSMA) for Transportation and Logistics Professionals

What is the Biggest Problem in the Cold Chain?

If you work in the cold chain, please share your biggest problem. I will summarize all the feedback and share my findings with anybody who provides their email address.

By | 2018-03-23T17:42:37+00:00 March 24th, 2016|Uncategorized|Comments Off on Cold Chain – Why Is It Growing So Fast?

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