According to published estimates, India’s cold chain sector would increase at a CAGR of more than 20 per cent by 2025. “By our personal experience, we could have witnessed 25 per cent growth in this area in the last year,” says Raaj Jobanputra, Director JW, “which might be owing to end customers whose tastes are impacted by urbanisation, health consciousness, greater hygiene, and quality awareness.”
After the pandemic, the quality features of the Fill (food) and the Pill (pharmacy) have become even more crucial, and people are willing to spend that extra rupee to acquire clean and safe food. The government’s severe standards for pharmaceutical product preservation have also made it mandatory that they are stored in organised cold warehouses.
While India’s burgeoning food business requires extensive cold chain infrastructure, including temperature-controlled transportation, storage, and packaging, the medical and pharmaceutical sectors (albeit primarily export markets) have also shown significant growth.
We also anticipate that technology will play a significant role in the cold chain sector. There will be a move from traditional cargo handling to real-time ERP/WMS, allowing freight to be handled considerably more efficiently. This will improve production and efficiency.
As businesses and other organisations undertake digital transformation, they are confronted with an expanding flood of data that is both extremely valuable and increasingly difficult to acquire, handle, and analyse. New tools and procedures are required to manage the massive amounts of data being collected, mine it for insights, and act on those insights once discovered.
The Indian government is one of the driving forces in developing the cold chain industry and supports private participation through various subsidy schemes and grants.
Each cold chain shipping system can be classified as follows:
Active Systems: Active thermal systems use mechanical or electric systems powered by an energy source, combined with thermostatic control, to maintain proper product temperatures.
Passive Systems: Phase change materials (PCM) such as water/ice or dry ice are often used in passive thermal systems. These are the most simple and cost-effective shipping techniques.
Hybrid Systems: Hybrid thermal systems combine PCMs like water/ice or dry ice with thermostatic controls. To maintain correct product temperatures, these systems commonly use PCMs as a source of energy, which is managed via thermostatic control.
Cold-chain packing has advantages and disadvantages. A balanced combination of both options is required for a successful cold chain distribution system. The sensitivity of the product (such as pharmaceuticals, cultures, probiotics, etc.), the distance, the quantities involved, and the number of places to be served are all factors. Within-city delivery via air is another option, as is time-bound delivery, among others.
Challenges
In addition to perishable foods, the pharmaceutical business is a significant industry that relies on a reliable cold supply chain network. A strong and well-managed cold supply chain network is necessary for the storage and transportation of vaccines, life-saving medications, and other pharmaceutical raw materials.
- To create an effective cold chain infrastructure, several components must be developed:
- It is necessary to design transport units such as freezer trucks, freezer containers, reefer vans/trucks, carriers, merchandise carts, and so on. This can also result in greater transportation costs because the necessary equipment and fleet must be purchased.
- Fuel costs in India account for around 45 percent of cold storage operational charges, resulting in significantly higher costs. Operating costs for Indian cold storage enterprises average around Rs 100 per cubic foot each month. It costs half as much in the West, where fuel costs only 10 per cent of the total.
- While the West has integrated technology such as artificial intelligence, machine learning, and the internet of things into its operations, India lags far behind. Lack of technology results in underutilised and broken cold chains, resulting in losses for both operators and food manufacturers.
- Power outages or fluctuations in electricity can cause powered cooling systems to fail.It can also result in a lot of waste because perishable commodities are impacted by extended heat exposure, resulting in a loss of product quality and profitability.
- Cold chain logistics management necessitates highly qualified people who are familiar with all processes and protocols as well as hands-on knowledge of various cold storage and transportation equipment.
- The private sector owns and operates 92 per cent of India’s cold chain facilities. The business is very fragmented and almost nonexistent in several regions; in fact, only four states account for 60 per cent of the country’s cold storage: Uttar Pradesh, Gujarat, West Bengal, and Punjab.
Fortunately, the Indian government is a driving force in the development of the cold chain business, and it encourages private participation through different subsidy programs and incentives. The Ministry of Food Processing Industries (MoFPI) created a program, particularly for cold chain, “a scheme on cold chain, value addition, & preservation infrastructure”.
The Indian cold chain business is still in its infancy, making it one of the most promising fields in the cold chain warehousing and logistics industry. The Indian cold chain logistics market was valued at $16 million in 2021, and it is predicted to grow to $36 million by 2027. India is on track to become the world’s fifth-largest economy by 2027, and as a well-established essential player in the global market, investment in India’s supply chain infrastructure is expected to rise year on year.
Effective management
The world is changing faster than we can comprehend. The cold chain management process will become more complex and difficult as global marketplaces accommodate a growing market for food and medicinal products. As a result, there is a requirement for
- High-quality and dependable infrastructure in terms of warehouses and transportation.
- Reliable systems and methods for handling day-to-day operations
- Skilled and dependable labour.
- Sustainability of Business
- Exploring value addition in operations
An AI (Artificial Intelligence)-based cold chain management system can aid logistics partners in assuring and supplying data-laden information that shipments are not only preserved at the specified temperature but also retained within a suitable temperature range throughout the supply chain.
