Cold Chain Logistics:Evolving Scenarios

By Group 12

By Group 12

Current State of Affairs

Non Perishabl e 34%

Perishabl e Products 66%

Perisha ble Goods Wasted 40%

Perisha ble Goods Used 60%

USD 7.40 Billion (2015) USD 4.68 Billion (2013 )

USD 3 Billion (2011)

Projected Growth rate: 2025%

Industry estimated at Rs 130-140 billion, with the share of the TCW and TCT segments constituting Rs 90-92 billion and Rs 22-20 billion, respectively -CRISIL India has 5,400 cold storage facilities, with a combined capacity of 23.66 million metric tons that can store less than 11% of what is Produced Govt to roll out Investments to the tune of Rs 12 15 billion towards the establishment of cold chain infrastructure between 20011-12 and 2015-16

What is Cold Chain Logistics

A Cold Chain is a physical process that dominates the supply chain of perishable products. It includes a series of equipment and process used to protect the perishables by keeping them chilled and frozen starting from source to destination The key value proposition of cold chains is the storage and uninterrupted distribution of products maintained at controlled temperatures that helps reduce wastage and spoilage, thereby maintaining quality.

TRACING
FARM
Pre Cooling Facilities Cold Storages Post Harvest Handling

PLANT
Processing Packaging Quality and Safety

DISTRIBUTION
Market Development Inventory Control Retailers Practises

CONSUMER Behaviour Awareness Refrigeration Practises

REFRIGERATED TRANSPORTATION

TRACKING

Why Cold Chain so Complex?

As the Cold chain on an avg takes about 39 or more steps from manufacturer to reach consumer Its become imperative that the perishable goods are maintained in suitable temp. The major issues involved with Cold Chain are:Pre Cooling Facilities at farm Quality and Safety Choosing suitable TPL

Awareness among farmers about cold chain facilities

Dynamic Pricing

Refrigerated Logistics and IT Enabled Network

Packaging

Inventory Control

Effective Cold Chain

Cold Chain Performance Evaluation

Several Key factors
Return on Investments(ROI)

Quality Certifications

COST

QUALITY

RELATIONSHIP

SERVICE LEVEL

Customer Satisfaction

Traceability

Factors crucial in success of a Perishable supply chain

Time Lost in trans -shipment Temperature Logging Devices Integrating Warehousing and Transportation services Effective Cold Storage facilities Refer Vans and Trucks used for Transportation of goods.

Evolving Scenarios
Given the premium placed on location, flexibility and unique storage and handling requirements, perishable companies are Inevitably driven to outsourcing logistics services .
LTL Freight

Variable Temp Storage

Effective Cold Chain

Data Loggers

TPL Solution

Impact of Cold Chain Failures

Impact on Commercial advantage :-Commercial advantage is often lost in cases of poor logistics service reliability due to last minute changes to schedules, Schedule slippage ,service cancellation ,missed trans-shipment connections ,industrial disputes and /or inaccurate arrival information. Impact on Product throughput:- Failures in the Cold Chain caused by inadequate package at the point of shipment ,damaged goods ,lack of cold storage prior to shipment during transshipment ,failure to maintain refer temperature control can impact the overall supply chain throughput. Inventory Control:-Inventory management can be compromised by inaccurate cargo details resulting from late or incorrect documentation incorrect labeling, and ignorance of clearance requirements.

Cold Chain: Business Perspective

How can we Cash on Growing Cold Chain Market?? Further sections were useful for the companies entering into cold chain market.

Existing Solution Provided by Third Party Logistics

Currently Producers of Perishable goods like Mother Diary,Cadbury,Bharti Wallmart, Amul,Safal etc are engaging Third Party Logistics for transporting theses goods. The Producers of Perishable goods themselves dont own fleet of Refrigerated Trucks which are used to transport these products. None of the perishable goods producing companies have their own fleet of refer trucks /Vans. Two Parties which are essential components of Cold chain : Cold Storage parties Third party logistics Here We would focus on TPL and their needs for a future business scope in Cold Chain.

Third Party Logistics and their Needs

Currently No Original Equipment Manufacturers (OEMs ) are Selling complete Assembled Refer Trucks which TPL parties own for transporting the perishable Prod cuts. TPL usually seek assistance of three parties for making a complete refer truck. Chasis Suppliers Body Builders( Insulated Containers used to carry the goods) Refer unit

Business Solution to TPL

Instead of supplying only Insulated Containers, Refer Kits .Manufacturers of these can do the following: Manufacturing a complete insulation package ( Insulated Container with installed Refer Kit) It will eventually save the cost of TPL and manufacturer would get first mover advantage. Tie Ups with OEMs for Installing the combined insulated package to the Chases would give larger amount of business. As per Our Research we would go ahead with the first and try to look who the potential clients and what are the technical as well as service need.

Source ::The data has been collected by Primary methods of Research Interviewing the Potential Clients

Existing Third Party Logistics (TPL) in India

At Present there are Total of 26 TPL which are providing Cold chain logistics Distribution by Region 50% of Companies are in Delhi, NCR, Punjab Approx 70 % of these companies belong to Unorganized sector.

4%
31% 50%

North
South West East 15%

Main Potential TPLs

Major Companies Kausar,India Snowman Frozen Foods Pvt ltd Coldex Coldstar Guppa Cold Storage Evergreen Pvt Ltd RadhaKrishna Food Land AA Lloyds Line Prasad Motors CTC Freight Anand Frozen Foods Navjot Frozen Food Carrier Fleet Size 170 1000 800 55 69 155 170 135 165 92 100 135

Technical Requirements of TPLs

The Containers standard size 32* 8.5 * 7.9 26 * 7.94 * 7.90 24 *7.94*7.84 21* 7.5 * 7.80 19 * 7.50 * 7.84 Main Chasis Used by TPLs
Tata 407,3516,4018,31-18,25-15,25-18 Ashok Leyland 35-18 ,35-16, 22-14 , 25-16 EICHER VE 20.16 ,11.10

Temperature Range Generally Required

25 to +20

Multi Temperature Requirements trucks :-Only Big companies like Coldex,Snowman have these but only in 10% of their trucks.

Preferred Kit supplier Carrier Hwasung Thermoking Preferred Body Builder Suraksha Jindal Macdet Data Loggers Requirement to check the temperature range during the Journey. Tonnage Capacity 8 to 31 Tonne

Challenges in Cold Chain Industry

The Complex distribution scenario involves refrigerated trailers ,trains and carriers with multiple hand off points. Mishandling in common place while transporting fresh produce from the farm to the warehouse and thereon to the distribution center to be forwarded to retail outlets. Perishable are susceptible to temperature abuse at every point in transit whether it is an open air loading dock at a distribution center or retail store A Higher than acceptable control temperature setting at Customs Simply placement in the wrong section of a multi refrigerated trailer. External drivers such as regulatory and industry demands for quality improvements in cold chain logistics solutions are exerting greater pressure on Logistics providers ,particularly in the transport of Temp Sensitive pharmaceuticals . Internal quality assurance departments are placing even more stringent structures on logistics

Demand Drivers for cold Chain Infrastructure

Fully leverage strengths Rapid Growth of Modern format organized retailing Obsolete or defunct existing installations

Bottle Necks
High Capital Costs Limited Power Supply High Power costs: Energy intensive industry High exise/custom duty on cold chain materials Poor awareness of benefits of pre-cooling among farmers Prohibitive lead time from adoption to benefits

Limited Knowledge Base

Lack of Domain Skills No access to trained technical skills: Sustaining specific cold chain links No specialized institutions for cold chain technicians No central body of knowledge on Best practices

Government Initiatives : Budget 2012

Infrastructure status was granted to cold chain sector in 2011. More so, Viability Gap funding was announced for the cold chain. External Commercial Borrowings was opened for this sector also last year. Customs duty to set up cold storages, reduced to 2.5% - this translates into cost reduction for imported technology. Truck Refrigeration units were already exempted from basic customs. Excise duty exempted to cold chain equipment. Exemption from service tax to installation of cold storages was declared last year.

Infrastructure spending to be increased with special focus on agriculture based infrastructure. 150% weighted deduction on capital investments in this sector. Food storage capacity to be augmented.
To provide an added Rs 300cr to develop initiatives for horticulture marketing (initiatives). Corpus on rural infrastructure development was also increased to Rs180bn. Comprehensive policy to further develop PPP models in this sector underway.

There is no roll back to investment linked tax incentive announced last year and to ongoing grants and subsidy schemes. NCCD (national cold chain development) as an autonomous body to steer development with prime focus on agri-based cold chain.

Thanks !!!!!!!