By William DiBenedetto, CBN Features Editor
The cold chain faces many interrelated challenges that span equipment and technology, regulation, rapid expansion, logistics costs and rate pressures in a volatile economic and financial climate.
Recently, Sonoco ThermoSafe, a global provider of temperature assurance packaging, put some perspective on those issues in a survey, “Assessing the Future of the Cold Chain Industry.” The survey was conducted over five months last year and highlights the trends that “significantly impact the cold chain industry – including environmental trends, logistics and products and services.” The survey’s 165 respondents spanned more than 20 countries and five continents.
Russell Grissett, vice president and general manager of Sonoco ThermoSafe, said the survey revealed two key takeaways:
- Due to multiple drivers, including environmental concerns and the need to improve supply chain efficiencies, customers are increasingly reusing passive packaging systems.
- The industry will see a stronger influence of regulations globally, while at the same time pharmaceutical companies continue to outsource non-core activities, both of which will have a dramatic impact over the next five years.
Sonoco found that the current logistics spend for temperature-sensitive healthcare products is approximately $8.4 billion worldwide and increasing, or about 13 percent of the overall pharmaceutical logistics market. Approximately $5.6 billion is spent on transportation, while another $2.8 billion is allocated to specialized packaging and monitoring devices.
Regarding passive packaging, Sonoco’s respondents “overwhelmingly agreed the three most important factors in need of improvement are package efficiency, total cost of ownership for delivery of drugs to their destinations, and price,” according to the survey results. Of the 30 percent of applicable respondents who confirmed they use active systems, price and the availability of active containers in locations when and where they were needed “received the most criticism.”
Speaking of reefer containers and ships, Dynamar’s reefer market report for 2014, issued
late last year, noted a continuing and somewhat disturbing trend for reefer ship operators. The report said that for the first time, ocean transport of fresh produce exceeded 100 million tons in 2014, increasing to an estimated 101.1 million tons in conventional reefer ships and reefer containers. This accounted for 2.7 percent of the total seaborne trade for dry cargo. But nearly 74 percent of total fresh produce volumes were transported in containers, compared to 52 percent 10 years ago and 62 percent in 2009.
The size of the reefer container fleet reached 2.45 million TEUs in 2014—an increase of 6.5 percent year-on-year—while conventional reefer ship capacity will decline by more than 60 percent to about 140 vessels by 2025, according to the Dynamar analysis. The vast majority of the reefer container fleet comprises 40-foot high cube units, for which 1.9 million (up 5 percent since 2013) on-board plugs are available.
The current conventional reefer ship order book has only one unit, an approximately 200,000-cubic-foot vessel for Toei Reefer Line of Japan, scheduled for delivery in August. It will be the first reefer ship delivery since in October 2011.
So it’s not a stretch to say that the box is taking over.
Meanwhile, a report from the International Association of Refrigerated Warehouses, a core partner of the Global Cold Chain Alliance, says the total capacity of refrigerated warehouses was estimated at 552 million cubic meters worldwide in 2014, an increase of 92 million cubic meters (20 percent) over 2012.
Corey Rosenbusch, president and CEO of GCCA, noted that India now surpasses the U.S. in total cold storage capacity, with 131 million cubic meters of space compared to 115 million cubic meters for the U.S. With 76 million cubic meters of capacity, China now ranks third.
Capacity in 13 countries has grown faster than 10 percent annually since the financial crisis of 2008. Countries leading the growth rates since 2008 are Turkey, India, Peru, and China.