Complete Guide to Cold Chain Logistics: Processes, Solutions & Best Practices 2024

The cold chain logistic market has seen significant growth in the last decade, especially since the pandemic. This is because of the increasing demand for safely receiving cold chain products such as pharmaceuticals, vaccines, lab samples, food, beverages, dairy products etc., among consumers worldwide. 

In fact, The global cold chain logistics market is projected to grow from $242.39 billion in 2021 to $647.47 billion by 2028, exhibiting a CAGR of 15.1% in the forecast period. 

Clearly, the market for temperature-controlled transportation and storage of perishable products is steadily growing. And now is the golden time to enter the cold chain logistics industry.

This article will serve as your go-to guide if you’re looking to enter cold chain logistics. 

Understanding Cold Chain Logistics

Cold chain logistics is a technology and process that facilitates the safe transportation of temperature-sensitive items via thermal and refrigerated packing methods. The process keeps such products from spoiling, impacting every supply chain stage. 

For example, you need to store products like vaccines in a limited temperature range—from manufacturing to the final moment of vaccination. Or, you want to transpot biological cargo from one place to another quickly and safely.

The process further involves the utilization of temperature-controlled warehouses and distribution centers for storage and cold-insulated transport vehicles for product distribution. 

Significance of Cold Chain Logistics

The cold chain technology is critical in improving global food industry security and supplying better quality nutrition and medical supplies to the remotest regions worldwide.

Effective cold chain shipping directly impact modern enterprises (especially food and beverage industry and pharmaceutical industry) in the following ways- 

• There’s less likelihood of products getting spoilt, leading to lower inventory replacement costs and higher revenue per shipment.
• Customers face fewer chances of receiving damaged products, and better product quality leads to enhanced customer satisfaction.
• Such transportation boosts newer market opportunities, and the range of transportation is greater.
• Better compliance with regulatory norms (of bodies like Transportation Security Administration) around food and medical products transportation. 

Essential Components and Processes

Here are the vital elements for effective cold chain distribution – 

1. Cooling systems

These systems are used to reduce the temperature of the goods. Once the appropriate temperature minimums is achieved, the commodities are taken for further processing.

2. Temperature-Controlled Storage Systems

Cold storage becomes extremely important for shipping goods to a distant market. The cooled commodities are exposed to freezing temperatures using substances like liquid nitrogen to reduce their perishable nature. These storage systems ensure that the perishable goods are fresh and safe for usage and consumption.

It has various elements as below. 

1. Warehouse design requirements

Temperature-controlled warehouses have different refrigeration equipment, including: 

• Compressors
• Condensers
• Expansion valves
• Evaporators

These parts are placed strategically depending on the square footage, the difference in internal and external temperature, and the time of storage. These warehouses are also fitted with sandwich panels to prevent cold air leakage. 

High-density pallet rack systems, secure airlock systems, and automated storage and retrieval systems (AS/RS) together help reduce human intervention in temperature control, prevent cold air leakage, and prevent sudden temperature fluctuations. 

There are four ranges of temperatures maintained in warehouses:

• Ambient: 59 °F to 86 °F
• Cool: 50 °F to 59 °F
• Refrigerated: 32 °F to 50 °F 
• Frozen: -22 °F to 32 °F

2. Temperature Mapping Procedures

Temperature mapping involves testing the performance of your temperature-controlled equipment or facility and aims to ensure whether your storage systems can maintain the desired range of temperature or not through stress tests, including: 

• OQ/PQ stability tests
• Door opening tests
• Power failure tests 

Here, it involves steps, such as:

• Create an overview of the overall temperature distribution that you need to map.
• Determine cold and hot spots and the zones where you cannot store products.
• Find the time it takes for temperatures to exceed the threshold in the incidents of power failure or door openings. 
• Conduct temperature mapping regularly to ensure consistent compliance.
• Create a mapping report and implement suggestions there. 

3. Emergency Response Protocols

Keep a contingency plan ready to minimize the impact of temperature excursions. It can include procedures, including notifications and established corrective actions to prevent and mitigate them. 

4. Maintenance Guidelines

During your inventory management, implementing the First-In, First-Out (FIFO) method is a great way to maintain the desired temperature range. This system ensures your old products are sold first before newer ones, reducing waste and spoilage. 

Moreover, you should label your items correctly with expiry and receiving dates, so you can stock them accordingly. Ensuring your shelving units facilitate adequate airflow is also important to maintain consistent temperatures throughout the facility.

3. Monitoring and control systems

The items transported in cold chain distribution are temperature-sensitive. In the case of life-saving products like vaccines and other pharmaceutical items, it becomes vital to ensure the item’s integrity isn’t compromised. Hence having reliable temperature monitoring systems reduces the chance of spoilage.

4. Transportation Infrastructure

It is another crucial element in the distribution chain that keeps the frozen items intact. It helps move the goods to the destination while maintaining the suitable temperature and the integrity of the commodity.

5. Cold processing and distribution

Cold processing and distribution facilities consolidate loads from multiple suppliers and distribute them to various destinations to meet customer demand. They can also unload from numerous destinations and consolidate them for shipment back to suppliers. These facilities help cold chain logistics companies become more efficient in cold chain management by reducing transportation costs, improving inventory management systems, and increasing productivity.

6. Quality Assurance Protocols

You must take various quality assurance and control measures to ensure the goods transported are safe, as follows. :

• Live temperature monitoring, especially the temperature and humidity levels. 
• Deploy the Hazard Analysis and Critical Control Points (HACCP) systems to determine and mitigate hazards proactively.
• Inspect every stage of the supply chain to ensure incident management.
• Conduct staff training to facilitate effective handling, tracing, and risk management.

Common Challenges and Solutions

Sensitivity to temperature fluctuations makes cold chain shipments challenging to circulate in supply chains.

Here are some of the significant challenges that cold chain logistics providers face during of cold chain shipments.

1. Disrupted temperature control

Temperature-sensitive goods like pharmaceuticals, perishable food like frozen meat or seafood, and even everyday items like frozen vegetables or ice cream become unusable and cause safety hazards if exposed to temperatures outside the recommended range. That’s why stable temperature requirements are non-negotiable.

Solution: Scalable temperature-controlled systems that allow for maintaining a range of optimal temperatures based on the types of products can help avoid temperature excursions.

2. Inadequate packaging or damaged products

Receiving damaged shipments can also significantly hurt your profits. Broken products, inadequate packaging, and products exposed to mismanaged temperatures in the trailer can all add to the challenge. To keep it safe from these mishaps, rely on RFID tracking technology so that alerts and rectifications happen in time.

Solution: Use RFID technology to keep it safe from these mishaps, rely on RFID tracking technology so that alerts and rectifications happen in time.

3. Contamination issues

The cold chain cooling systems are a breeding ground for germs. If freezers and fridges are mismanaged or broken, they can cause microbial growth. To avoid mold, cold chain companies need to monitor their cold storage and freezers constantly.

Solution: Use cold storage to avoid mold, cold chain companies need to monitor their cold storage and freezers constantly.

4. Transport delays and breakdowns

The worst thing that can happen in a cold chain supply chain is a transport breakdown. A transport medium like a truck breakdown means a destroyed load, lost revenue, and wasted time and money. Also, temperature-sensitive goods quickly degrade during such transition delays.

Solution: Keep a backup plan ready to mitigate real-time challenges, such as breakdowns or emergencies like accidents. For instance, you can reassign delivery to another available driver in case of vehicle breakdown. You can also use tracking technology to monitor desired temperature and humidity.

Technology and Innovation in Cold Chain Logistics

1. IoT and Sensor Technology: 

IoT devices and sensors offer real-time tracking of environmental conditions, including temperature and humidity throughout your supply chain. These technologies enable you to find and address issues proactively, minimizing wastage and ensuring products stay in optimal condition.

2. Blockchain Technology: 

Blockchain, an internet-based technology, helps validate and record transactions at all stages of your supply chain. In biopharmaceutical products, a cold chain involves a manufacturer, a logistics provider, cold storage facilities, and final customers. 

A blockchain technology helps: 

• Process payments faster and more easily.
• Resolve disputes and increase administrative efficiency by eliminating manual data entry
• Track orders with real-time payload tracking to ensure high security.

3. AI and Predictive Analytics

AI and predictive analytics allow you to improve your routes, predict demand, and optimize inventory levels more efficiently. By tapping into historical data, you can also forecast major risks and make data-driven decisions to mitigate them. 

Compliance and Regulations

Regulatory compliance forms a vital part of cold chain logistics and ensures product quality and safety. 

People are moving from AIB or ASI certification to more rigorous standards like Safe Quality Food (SQF) and Brand Reputation through Compliance Global Standards. These lay more emphasis on exhaustive food safety, quality control, and traceability and the use of advanced technologies including automated temperature control, and tracking systems. 

If you are shipping products internationally, you must also comply with the International Air Transport Association (IATA) Transport Security Administration regulations. Besides, you must follow USA’s FDA and Department of Transportation regulations when transporting products within your country to avoid legal penalties.

Implementation Guide

The cold chain maintains a limited temperature range throughout the entire supply chain for temperature-sensitive products to remain safe and of high quality.

The cold chain process is divided into the following five steps – 

1. Receiving goods from suppliers.  It includes unloading goods from trucks or trains onto pallets or crates. Then, moving them into storage rooms or freezers to deep freeze them as appropriate for their type or condition. 
2. Storage of goods at an appropriate place with good conditions for long-term storage (a temperature-controlled environment). Depending on shipping needs and logistics agreements between parties involved in a particular shipment, it could be at the supplier’s warehouse or a third-party facility. 
3. Preparing goods for shipping purposes, including labeling and packaging the goods for final delivery.
4. Loading the packaged goods for the final delivery in the designated cold chain fleet. The cold chain fleet will involve temperature-controlled trucks for last-mile delivery.
5. Delivering temperature-sensitive goods to the appropriate recipient.

Additional Tips to Enhance Cold Chain Logistics

Moving on, let’s understand how cold chain logistics companies can maintain optimum standards by following the steps below.

1. Prioritize your delivery order

Time and temperature-sensitive products require efficient and on-time deliveries—without any delays. You ensure that by leveraging a multi-stop route planning and optimization software like Upper for all your last-mile deliveries. 

Upper allows you to mark your orders Low, Medium, or Critical in priority so that your drivers can plan deliveries accordingly. A route planning and route scheduling software will help you get more deliveries done in lesser time. 

This will ensure that the operations of your cold chains are successful and shipments reach customers safely—in proper temperatures while enhancing your productivity and increasing your profits.

2. Choosing the right vehicle and proper transportation equipment

The packaging system is vital in maintaining storage and transit temperature in cold-chain distribution. You can break down packaging systems into two categories: active (actively regulate product’s temperature using blast freezers and temperature-controlled air circulation) and passive (passive regulation via dry ice and gel packs, for example). 

It’s recommended to leverage a hybrid active and passive packaging system. But it largely depends depending on your cold chain process size.

3. Pre-checks

Whether using a truck, or some other form of transportation, it’s essential to ensure that your drivers go through a pre-trip inspection of your products and vehicles.

A few minutes spent going over these items will save you hours of lost product and wasted time, improving cold chain management.

4. Carry out regular inspections of the fleet

Chill chain logistics services must run regular inspections of your cold chain fleet. You must review your transport medium regularly so that it doesn’t suffer an unexpected breakdown.

5. Provide real-time updates to customer

Providing real-time tracking information to your customers regarding ETA and delivery status keeps them in the loop and ensures they are present at the delivery time. Upper helps you send automatic notifications to your customers for the same. It ensures you do not have to try delivering the same package multiple times, which helps maintain the quality of your cold chain shipments. 

Improve Your Cold Chain Logistics Efficiency Using Upper

With Upper’s route planning and optimization software, cold chain providers like you are saving 10 hours per week and getting more deliveries done on time which is excellent for cold chain logistics.

• With Upper’s carefully chosen transportation routes, you’ll consistently deliver your cold shipments on time and eliminate all delays. Route planning and optimization software for cold chain logistics can be integrated with your business systems, like CRM software or warehouse management systems, to extract delivery data. Then, it can help you generate the shortest and fastest routes per specific delivery constraints, such as driving preferences, time windows, and more.
• As a dispatcher, you can mark your shipments as Low, Medium, and High as per priority to keep the safety of cold chain items intact. You can also add multiple stops and details such as service time, priorities, or other notes for your drivers to manage their jobs better. 
• Upper sends automatic notifications regarding ETA and delivery status to your customers to save your drivers from failed deliveries. This helps them complete more deliveries and ensures the cold chain items safely reach the end customers every time. 

It’d best for you to try out Upper’s functionalities with our 7 days free trial.

Conclusion

Efficient last-mile deliveries play a massive role in ensuring that the cold chain is unbroken till the products reach the end customers. It helps provide excellent customer service and saves you costs and time, increasing your revenue. 

Upper’s intelligent route planning and optimization software understands and caters to all cold chain challenges, so your drivers spend less time on the road and get more cold chain deliveries done in less time.