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Cold chain logistics: Toward a foolproof and sustainable storage system

Investment is expanding to meet the complex need for temperature-stable transport and storage.

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Quantumrun Foresight
January 25, 2023

From transporting vaccines to frozen food, the cold chain industry proved its worth during the COVID-19 pandemic. But even as the world returned to normal, some companies looked to enhance their cold storage logistics capabilities even further.

Rethinking the cold chain context

Aside from enhancements in cold storage devices, cold chain monitoring is also becoming more necessary than ever. In fact, the global cold chain monitoring market is projected to increase from USD $4.6 billion in 2020 to USD $8.2 billion by 2025, according to research firm Markets and Markets. The sector is anticipated to have a compound annual growth rate of 12.5 percent due to increasing worldwide demand for temperature-sensitive pharmaceuticals and generic medicines, not to mention higher food quality.

Real-time monitoring software solutions, such as reporting, data analytics, and tracking, have experienced a significant surge in demand, particularly during the pandemic. These solutions offer the ability to remotely monitor the cold chain performance and adhere to guidelines by regulatory agencies, such as the US Food and Drug Administration (FDA) and World Health Organization (WHO).

Additionally, the cold chain transportation monitoring market is expected to grow even more rapidly by 2025. The high demand is due to the many devices needed to track any variation in temperature throughout the transport. Moving significant temperature-sensitive cargo over long distances can be difficult because they are subjected to various environmental disruptions like storms and heavy snow. As a result, freight must be maintained at a specific temperature or within an acceptable degree of fluctuation. This requirement is specifically crucial for vaccines and other medicines.

Disruptive impact

According to the 2020 Biopharma Cold Chain Sourcebook, global investment in biopharmaceutical cold-chain logistics is anticipated to reach USD $21.3 billion by 2024. American Airlines Cargo has doubled its cold-chain capacity, while UPS launched a permanent service offering and expanded its global cold chain network. Meanwhile, DHL plans to invest USD $400 million in 2022 to expand US pharmaceutical and medical supply capabilities.

Findings from the 2022 Third-Party Logistics Study showed that shippers and third-party logistics companies aim to grow their businesses through cold chain capacity expansion. This development may involve automating processes like pallet storage and retrieval, as well as order picking to boost efficiency and avoid harsh working environments. Other areas of research that can potentially lower costs while improving performance and sustainability include reusable thermal and passive packaging.

Packaging spending has increased due to the vital role that cold chain solutions play in keeping products fresh and intact while they are being delivered globally. Passive packaging solutions offer extended temperature control, allowing for safe deliveries to secluded areas. In addition, product integrity is protected during airport customs delays or extreme climate changes. For example, Cocoon 3 by international shipping firm World Courier uses a blend of honeycomb, vacuum-insulated panels to give long-term temperature stability across a wide range of temperatures, including frozen (-15 to -25°C) and refrigerated (2 to 8°C).

Implications of rethinking the cold chain

Wider implications of innovating the cold chain industry may include:

Pharmaceutical and food industries investing heavily in cold chain storage solutions tailored to their products’ needs.

More startups and shipping companies focusing on automation solutions for cold chain monitoring, including advanced sensors and the Internet of Things (IoT).

More businesses offering cloud-based, end-to-end cold chain monitoring and operation services, particularly for smaller companies.

Enhanced cold chain systems resulting in faster and safer deliveries of essential goods, even in remote regions, to deliver vital supplies such as vaccines and produce.