We know that the cold chain logistics market is on the rise. The most recent reports estimate a compound annual growth rate of 15 % from here to 2028. The Covid-19 pandemic was the unexpected trigger that caused a spike in consumer demand for perishable goods, and the retail industry has known how to respond. So far, at least.
The prospects are promising; now how do we obtain them? Because we are also aware that sending products at a controlled temperature is increasingly expensive. Given factors like energy costs, changes to environmental policies and especially this increased demand, logistics professionals are spending more and earning less.
To be efficient, sustainable and profitable, at Tempack, we have found several improvement areas in which the whole industry and every member of the chain must apply ourselves if we want to reach this promising future.
In the cold logistics sector, we work with a vast range of perishable goods, such as temperature-sensitive medicine, frozen fish, fresh flowers or freshly made burgers. This means that they need to travel at different temperatures. Large-scale distribution is different to capillary delivery. For example, the distance, time and protection efforts are different, to name a few.
As such, a variety of resources are required, such as refrigerated storage, passive cold delivery vehicles and packaging so that we can respond to the diverse temperature-controlled needs.
Why does a delivery from A to B go through C? Why do we not consider the routes’ weather conditions? Why do we not adapt our packaging to the transportation time? These operational shortcomings in the routes lead to significant risks (and losses) in cold chain distribution.
Technology comes to the rescue in this case with big data solutions and artificial intelligence. When we have the routes’ geographical, weather and visibility data, we can model scenarios and offer better results.
Automatic Storage and Retrieval Systems (ASRS) are great for large-scale distribution, but for small businesses, especially those specialising in last-mile deliveries, the carrier’s performance has much more leverage. What are on-time delivery rates, returned deliveries and claims, etc.? Won’t we be throwing all the work we’ve done away at the last minute?
In this sense, choosing a good distribution partner that responds well to the challenges involved with perishable goods is the best for ensuring that we keep within acceptable margins.
Assessing total landed costs (TLC)
TLCs are the price of a product when it reaches a consumer. It includes manufacturing, packaging and transport costs, taxes and customs and duties, etc. If the price that we offer – taking into account our costs – is outside the market price, then we need to know about it as soon as possible using reliable figures!
It needs to all be very carefully worked out, analysing our different areas and services, also taking into account extra costs due to missed deliveries. That way, we can know if the business is profitable or what we can do to make it work.
Innovation is the future
Throughout the sector, we see innovative solutions that can offer advantages. Our personalised isothermal packaging solutions are already at the forefront of innovation.