The cold chain (r)evolution
While there have been recent changes in temperature-controlled logistics, known as “cold chain,” there are many of the same players remaining in the sector, but with some new people skills, processes and technologies.
While there have been recent changes in temperature-controlled logistics, known as “cold chain,” there are many of the same players remaining in the sector, but with some new people skills, processes and technologies.
The pandemic has super-charged the cold chain market with consumer demand for refrigerated and frozen foods. The local restaurant industry has seen a demand spike in heated foods, while nearly all supply chain managers overseeing temperature-controlled products have been reviewing back-up plans and alternate sources for critical items.
This is especially true where foods, such as fresh and frozen seafood, have been affected by disruptions in highway capacity. In response, companies who traditionally only dealt with a narrow portion of the cold chain, such as refrigerated warehousing firms, have been expanding services or perhaps joining up with larger service providers to offer end-to-end third-party logistics (3PL) services in cold chain. To determine whether this is a revolution or an evolution, let’s consider the recent trends.
In addition to consumer trends, there are perhaps four other areas to consider. I’ll look first at industries. From salad supplements to dog food, there are many new products appearing in the refrigerated section of your grocers, and many of these are new companies with only a general knowledge of logistics.
These producers have been finding out about logistics and the unique rules and processes for cold chain. As an example, one two-year old company’s CEO told me that they were always waiting for a Florida truckload carrier to schedule their cross-county transfer of several pallets of production to a refrigerated warehouse they use.
“Revolutions foreshadow new possibilities,
and there are many new possibilities coming
to cold chain.”
The average transfer was just 8,000 pounds, and the carrier was charging $1,200. After we researched local firms, we found a local delivery (last-mile) provider who was willing to take two loads for $250, each in a refrigerated delivery van. I tell you this story to help make the case for 3PLs that can provide full-service to small- and medium-sized firms in the cold-chain logistics market.
Another major factor is technology. The ability to monitor flow, temperature and estimated delivery times at the order level is enabling smaller shipments in more markets worldwide. Businesses and consumers have high expectations in the visibility area and the successful companies have this technology.
That brings us to the players. The 3PL industry continues to grow at a double-digit pace because of the needs of small- and mid-sized firms, but also in niches that the big shippers and carriers can’t easily serve. The larger 3PL players are offering dock-to-door services including storage en route and complete visibility.
The last is packaging. The improvements in carrier equipment are complemented by improvements in shipper packaging options. The release of new materials and the ability to four-color print on plastics and on outer packages that include insulation is, in fact, a revolution.
When you consider all of the changes in service providers together with the changes in consumer expectations, it’s perhaps more than just a step-change in temperature-controlled logistics. Revolutions foreshadow new possibilities, and there are many new possibilities coming to cold chain.
