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Cold Chain

The global cold chain market is rapidly growing due to changing consumer habits and perceptions of frozen food. It is expected to nearly triple to $628 billion by 2028. Cold chain logistics faces increased pressure for accountability and traceability throughout the supply chain. Traceability provides detailed data on products' origins, conditions, and movements which helps address food safety, reduce waste, and build trust with consumers who want transparency in supply chains. Investing in traceability and warehouse management systems that track temperature and location is critical for cold chain logistics providers to gain customer confidence in their services.

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126 views4 pages

Cold Chain

The global cold chain market is rapidly growing due to changing consumer habits and perceptions of frozen food. It is expected to nearly triple to $628 billion by 2028. Cold chain logistics faces increased pressure for accountability and traceability throughout the supply chain. Traceability provides detailed data on products' origins, conditions, and movements which helps address food safety, reduce waste, and build trust with consumers who want transparency in supply chains. Investing in traceability and warehouse management systems that track temperature and location is critical for cold chain logistics providers to gain customer confidence in their services.

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dila
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© © All Rights Reserved
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Home 

 Supply Chain  Cold chain logistics

How Cold Chain Logistic Providers Can Build Trust with


Traceability
July 19, 2021

The global cold chain market is rapidly growing, primarily driven by an evolving
shift in consumer habits and the changing perceptions of frozen food. Valued at
nearly $210.49 billion in 2020, the cold chain market is expected to reach more
than $628 billion in 2028, nearly tripling its growth in less than ten years,
according to a market analysis report by Grand View Research.
At the same time, cold chain logistics, one of the most complex divisions of
supply chain logistics, is also facing increased regulations and pressure for more
accountability throughout the entire supply chain. This leads to the need for
traceability, the ability to track a specific item along every stage of the workflow,
which is increasingly required due to regulatory, ethical and environmental
issues.

Understanding the growth of the global cold chain market starts in Asia, where
e-commerce sales are fast increasing as a result of growing economies and
populations gaining wealth. This has led to a dramatic change in the perception
of frozen and refrigerated foods, as consumers now have access to products
previously unavailable to them. This change in perception, coupled with rapid
urbanization, means more Asian consumers are using the web for food
purchasing and are comfortable buying frozen foods online.

In the Philippines, there is another ongoing shift in food purchasing habits. Local
consumers are turning to supermarkets to buy their fresh and frozen foods,
rather than the traditional wet markets. The growth of online grocery shopping
and an increasing demand for fresh products continues to drive the expansion
of cold storage facilities and logistics.

In the western hemisphere, demand for healthy, convenient meals is also driving
an increase in ready-made meals and prepare-at-home meal kits that are
delivered with fresh ingredients directly to the consumer’s home. The focus on
health is also accelerating the desire for more organic foods, further pushing the
demand for cold storage and a frozen or cooled supply chain.

As more and more consumers rely on the cold chain market for their perishable
goods, the potential for waste increases. In addition, as more consumers use e-
commerce, they become accustomed to the guarantee of fast, free shipping.
They begin to expect all of their online orders arrive quickly and with no fees.
Online grocery orders are no exception from these expectations.

Because of this, retailers are under pressure to deliver faster and for less. To
keep up with the demand, retailers have to place orders more frequently,
meaning their orders are often smaller and made up of more variety, and all
with much shorter lead times. This variety also leads to more SKUs to manage
and more countries of origin entering the supply chain.

Even before the increased consumer pressure for faster deliveries, cold chain
logistics already faced several challenges. Due their short “shelf life,” perishable
products require temperature control at every stage in the supply chain. Many
items, such as meat, poultry, fish, dairy products, fruit and vegetables must be
kept fresh for as long as possible to avoid spoilage and the food going to waste.

In fact, according to the United Nations, globally, around 14% of food produced


is lost between harvest and retail, and for fruits and vegetables, more than 20%
is lost. Plus, any irregular change in temperature during transport, or even in the
warehouse where the product is stored, doesn’t just cause the food to go to
waste, but can cause a food safety issue.
To address the safety issue, improve sustainability and meet the never-ending
pressure to deliver products faster, it is critical for third-party logistic providers
to have traceability built into their digital infrastructure. For food specifically, it is
a critical tool that allows everyone from the growers and manufacturers to the
distributors and retailers to ensure the products arrive on time and in the right
conditions for safe consumption.

The level of detailed data provided through traceability can be incredibly


specific, and as it becomes an increasingly critical part of supply chain
management the data provided will only become more sophisticated. Take
tracking produce, for example. Traceability can identify its exact place of origin, if
pesticides were used, the date it was harvested, where and how it was stored,
how long it was in transit and much more. It also takes the guess work out of the
ideal conditions needed for storage and provides information such as exactly
how much time the product has to safely reach its next destination.

And while traceability is critically important from a safety and sustainability


perspective, it also plays an important role in building trust with consumers. In
the wake of the COVID-19 pandemic, which impacted supply chains all over the
globe, more consumers than ever before have begun to understand the
significance of the supply chain. This increased understanding has also inspired
new interest and scrutiny, leading to a growing desire from consumers for more
transparency. They want to know more about the supply chains behind the
products they buy, such as who is making them and where they come from,
especially when it comes to food products.

While the phrase “farm to fork,” is not new, it’s becoming more common for
everyday consumers to want to understand each step of the journey their food
went on to get to their plate. And being able to have that information available
for retailers to share with consumers helps not only build confidence and trust
with the end consumer, it also helps build trust with the third-party logistic
providers. As consumers continue to expect access to details about their foods’
supply chain, the more traceability becomes an expected part of the process for
all third-party logistic providers.

Temperature-sensitive products beyond food also rely on traceability. The


pharmaceutical industry, for example, has increased compliance requirements
for the safe and effective transfer of medicine and vaccines, which means
traceability and putting in place track-and-trace software to manage the exact
whereabouts of the product along the entire supply chain.

One essential component of traceability is the warehouse management system


(WMS). While the process of handling products during transit is important, much
of the time those products are in storage. The WMS should make decisions
around quality of goods whenever a traceable event is not within the boundary.
Key attributes, such as expected temperature for a product, should flag
inventory whenever an excursion takes place. This should prevent the WMS
from shipping a compromised product to the customer

As the global cold chain market continues to expand and evolve in response to
consumer trends or shifts in behavior, its reliance on technology will continue to
grow. Cold storage is a very reactive market that requires a level of flexibility and
adaptability, which means it’s the providers that are able to adjust quickly that
will be able to service the ever-changing needs of the market. But providing
those services starts with trust. And investing in traceability is one critical way to
provide confidence and transparency in every step of the supply chain. Retailers
and third-party logistics providers that acknowledge and embrace that
accountability also help customers to trust their processes and have confidence
in their service.

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