The food supply chain is all about delivering food from farm to fork. The estimates are 30% to 40% food wastage of the overall supply. Therefore, cold chain logistics plays a crucial role in the entire supply chain logistics process. Environmental changes and the daily growing food safety regulations create many challenges for the cold supply chain as they meander through this maze. What products does cold chain logistics cover? Products labeled as "perishables" like meat, produce, seafood, medical supplies and pharmaceuticals, beverages, candies, and frozen products are everyday items that will need cold chain transportation. Cold chain logistics is a science. Complex cold chain logistics companies will benefit significantly by partnering with a dedicated 3PL provider who can mitigate many of the challenges associated with this crucial supply chain.
According to Supply Chain 24/7, many transportation providers and system integrators in supply chain solutions are clamoring for the full solution "both software and hardware that provides a complete, end-to-end cold chain management can help retailers ensure food safety."
Cold chain logistics is dynamic, so the systems need to be adaptable. Factors to be considered include
Shippers need centralized cold chain logistics solutions that combine an efficient TMS with Real-time tracking from farm to table so they can focus on their core business. But how does one make that critical decision?
Wandering food does no one any good! Cold chain logistics solutions are adaptable, speed, and real-time tracking. An experienced 3PL provider can help leverage strategies to optimize inventory and deliver top-class service. Most retailers have an E-Commerce presence and hence omnichannel customers. Same-day shipment is becoming standard, and efficient inventory management is the first step in ensuring that. 3PL providers need warehouse and transport tech systems that can integrate seamlessly with the tech systems of other tiers in cold chain logistics. This enables real-time tracking of the shipment, thereby making inventory management optimal. Fresh stock is always preferable in cold chain logistics, and an expert 3PL provider facilitates it.
The pandemic has created a shortage of several supplies, and seeing the grocery aisles empty is not a new thing anymore. The current baby food shortage has forced the U.S. government to import baby food. "Ultimately, we have fragile supply chains," Nada Sanders, professor of supply chain management, told ABC News.
Situations such as these weaken the responsiveness of the supply chain system further. One way to mitigate this challenge is by intermodal transport. Drayage services can reduce the blocks in the supply chain, which is especially crucial when shipping perishables, essential pharmaceuticals, and medical products. Drayage connects different modes of long-haul transport. Warehouse and freight management also come into play. It helps connect all these elements in one system, thereby increasing transparency and cutting transit time.
Transportation costs form a significant component of the overall pricing of products. As highlighted by CNBC, the United Nations Conference on Trade and Development (UNCTAD) 2021 analysis shows that the current surge in container freight rates, if sustained, could increase global import price levels by 11% and consumer price levels. By 1.5% between now and 2023; By country, the U.S. would see consumer prices rise by 1.2%, while China would see a 1.4% increase, the report said. The analysis found that smaller countries dependent on imports would increase consumer prices by a much higher 7.5%."
Other factors that involve in rising transportation costs include
These are some of the other factors involved in rising transportation costs. Adopting a lean methodology helps mitigate many of these challenges. A cold chain logistics solution adopting lean methodology helps eliminate unnecessary activities and improves internal and external responses to customer bases.
According to Logistics Management, "transportation costs typically account for half of an occupier's total logistics spend but can easily rise to 70%, while fixed facility costs (including real estate) account for only 3% to 6%," And Inbound Logistics shared that warehousing transportation can help bring the costs down. Cold chain logistics must include direct store delivery (DSD). This service is particularly advantageous for fast-moving goods that go through the cold supply chain, thus cutting costs and avoiding costly delays. Different retailers have different shipment requirements, and DSD ensures that the products arrive at the store on time.
Even with a top-class cold chain logistics provider, slips can occur. Consistent and honest communication across the supply chain tiers creates trust, which leads to faster resolutions when issues arise. Cold chain logistics companies must have a network of vetted carriers to meet ETAs. Provision for reverse logistics builds consumer trust and creates goodwill for the retailer. Including this provision in the cold chain, transport is crucial, and only an experienced logistics provider will afford such services.
Cold chain logistics depends on the timely delivery of products in pristine condition. As the shipment travels through the chain, including warehousing, the temperature and humidity levels must be remote-controlled according to product specifications. Delays in shipment can happen due to natural and artificial causes. In-built systems to mitigate such challenges are necessary to ensure optimum cold supply chain logistics. Inventory management plays a crucial role in cold supply chain logistics solutions. An expert provider should have vetted carriers who thoroughly understand food safety and compliance requirements. Shipment tracking at a single point through TMS integrated with ERP systems informs all the tiers in the cold supply chain of the whereabouts and the systems condition.
Insurance forms a big chunk of expense for the shippers. As highlighted by SupplyChain247, "third-party insurers cover any damage, loss, or shortages you may experience while shipping with any carrier, worldwide. Their rates can be up to 90% less than standard carrier options, and they provide reimbursement for the total replacement cost of the product and the shipping cost."
Consolidated shipping with other local shippers can reduce costs like insurance and minimize delivery time. These needs mean asking a 3PL provider to take over farm-to-fork delivery tasks.
Shippers cannot assess how much inventory they need without real-time feedback from retailers and wholesalers. This lack of insight becomes a huge problem with cold logistics, as Deborah Catalano Ruriani reiterates in Inbound Logistics. Real-time tracking until its final delivery provides valuable data and feedback to the shippers, optimizing inventory management.
When something gets tracked, it is easier to make changes to it. Real-time tracking is no longer a luxury in the cold chain logistics industry. A centralized tracking system creates transparency in the cold supply chain and helps carriers and drivers prepare themselves for emergencies. A real-time system also provides access to the latest laws and safety regulations that drivers need to be aware of, and hence drivers need to be educated on the newest tech software.
Software Advice pointed out in a 2021 article that "supply chain professionals with at least one APICS certification have a median salary of $90,000, which is 27% higher than those without one." Truckers travel long distances, and cold chain transport can be stressful because of the shipment's sensitive nature and time constraints. Drivers optimum health also plays a vital role in the smooth running of cold logistics. According to Heavy Duty Trucking(HDT), Garmin has released a smartwatch for drivers seeking a healthy on-the-road lifestyle.
Cold chain logistics is a dynamic business. The times we live in are unpredictable. The pandemic is still looming over the horizon, inflation has hit record highs, and fuel costs are seeing heights never seen before. With all this going on, consumer demand for products has only risen. According to the eCommerce guide, in 2022, online retail sales have amounted to 4.9 trillion U.S. dollars worldwide. The forecast is that it will grow by 50% more in the next four years. Omnichannel customers demand a seamless shopping experience. Challenges abound in our ports with delayed ocean freight and a war in progress on the Atlantic Ocean.
The viable solutions available are dedicated logistics providers such as Port Jersey Logistics, a hi-tech/hi-touch partner that can help mitigate the many challenges in cold chain logistics. Delays, wastage and spoilage of cold logistics can be essentially shredded. Shippers and manufacturers can save time and money and pass on the effects of these valuable resources to the customers.
To tap the experience of an industry leader in cold chain logistics solutions, contact Port Jersey Logistics today!