Cold

Logistics
Chain

Tejaswini Babbepall(12)
Arjun Saluja(22)
Rachna Shah(8)
Nidhi Sarda(7)
Shiva Dhawan(20)

Table of Contents

What is Logistics ?
Logistics is the
management
of the flow of goods
Securit
from
y
origin to destination to
meet
customer
Right
Time, Right
requirements

Place
@ Minimum Cost

Transpo
rtation
Invento
ry

Logist
ics

Packagi
ng

Started as a
business concept

Wareho
using
Informa
tion
Manage
ment

Source: Global Agri System Pvt. Ltd. R

hat is Cold Chain Logistic

LOGISTICS

TEMPERATURE
CONTROL
(REFRIGERATION
)

COLD CHAIN
LOGISTICS

Major Sectors : Food and Beverages, BioPharmaceutical

The Cold chain logistics infrastructure

Global Cold Chain Facts:

Food Sector

Fruits &
Vegetables

Meat

Fish &
Seafood

Dairy
Products

Beverages

In European and American developed

countries, the rate of
refrigerated transport is up to 80-90%,
pre-cooling preservation is up to 80-100%,
and the loss rate is below 5%.
25% of the total food production is processed
foods. A booming industry

Cold chain in Food Sector

Industry Temperature Standards

Banana

Chill

Frozen

Deep Frozen

13C 2C -18C -29C

Temperature
and
Shelf Life
Product

Refrigerated
Shelf Life
(Days)

Optimum
Temperature
(Celcius)

Apple

90-240

Bananas

7-28

13.5

Bell Peppers

21-35

Cabbage

14-20

Eggs

180

1.1

Onions

30-180

Lettuce

12-14

0.6

Fresh Meat
(beef, lamb,
pork, poultry)

14-65

-2

Oranges

21-90

Pears

120-180

-0.6

Potatoes

30-50

10

Seafood (shrimp,
120-360
lobster, crab)

-17.8

Strawberries

5-10

0.6

Tomatoes

7-14

12

bal Cold Chain Facts: Bio-Pharmaceut

bal Bio-Pharma Cold-chain market

0 : $5.1 billion
2011 : $6.6 billion
4 : 7 of the top 10 global pharma products in will require cold
ines growing on average 8% per year for the next five years
Source: www.fiercebiotech.com/press-releases/

source: www.coldchainpharm.com/

Cold chain in
Pharmaceutical Sector

Global Cold ChainBio-pharma logistics spending

Pharmaceutical
Sector
growth

Cold chain logistics

spending
expanded from $5.1
billion in 2008 to $6.6
billion in 2011
Cold chain shipment growth
by region

Sources: http://www.aircargoinsights.com/news/cold-chain-pharmaceuticals-worth-billio
http://www.aircargoinsights.com/more-market/global-biopharma-demand-on-the-rise/

HISTORY &
For the first time in 1797 a
BREAKTHROUGHS
British fishermen used natural
ice to preserve their fish stock
piles
1970, Tropicana orange juice
was shipped in bulk via
insulated boxcars in one
weekly round-trip from
Bradenton, Florida, to Kearny,
New Jersey.
By 1972, they were carrying
around 1,000,000 US
Top icing of
gallons(around 38,00,000
A circa 1870 refrigerator
car design. Hatches in bagged
Litres)
vegetables in a
the roof provided access
Illinois Central Railroad #14713,
refrigerator car
a ventilated fruit car dating from 1893 to the
ice tanks at each end

BREAKTHROUGHS IN
INDIA

In 2004, Safexpress Pvt Ltd became the first

company in the Indian logistics industry to use GPS
Maersk India, had taken steps to facilitate research
in the production, harvesting, warehousing, and
packaging of bananas. The company provided endto-end cold chain logistics support, besides
undertaking training of local banana exporters in
cold chain management.
Sun logistics, FlexiTank in 2010

Global Cold Chain Players

Americold logistics LLC , Canada, USA $ 1.62

billion
VersacoldArgentina, Australia, Canada,
New Zealand $ 900 million
Millard refrigerated services, Canada, USA $
230 million
Nichirei logistics group inc., Japan,
Netherlands, Poland $ 95 million
MUK Logistics GmbH, Germany $ 60 million
Nordic cold storage LLC, USA $ 27 million
Swire cold storage, Australia, Vietnam $7.5

Value Parameters
Network (Geographical coverage)
Temperature Range Availability (Product
Range Covered)
End to End Solutions (Integrated approach)
Temperature & Humidity Control
Tracking Methods
Real time information feedback
Security
Cost
Trust /Reliability of service provider
Flexibility of service provider
Ability to meet Tech Specs
Regulatory Compliances
Carbon Footprint
Transportation Time *

Stakeholders
Infrastructure
Warehouse / Cold Storage
Owners
Refrigeration and Cold
Chain Equipment
Technology suppliers
Refrigeration Solution
Providers
Specialized Equipment
Providers
ICDs (Inland Containers
Depots)
Sea / Air Ports
Transport Vehicles
Security

Stakeholders
Stakeholders

Others
Power / Electricity
Shelf Life
Temperature
Humidity
Distance
Seasonal Changes
Roads Connectivity

Cold Chain: India

In India 30 per cent of the fruits and

vegetables grown in India get
wastedbecause of lack of cold storage
facilities and energy infrastructure.
Only 8% of the produce is processed in India

The total cold chain

market in India is
estimated at $3.2
billion in 2009
Expected to touch $9
Billion by 2015
Growing at 20-25 per
cent CAGR
Cold chain industry
Cold storage 88 %
Cold transport 12 %
Source:
IBEF
100
% FDI allowed

Commodity wise Capacity

Utilization, 2000
Commodity
Cold chain
capacity
(Percentage)
Potato
92.82*
Multi purpose
7.63
Fruit & vegetable
1.07
Fish
0.73
Meat
0.15
Dairy & milk
0.68
Others (Pharma,
0.36
Life sciences)

Source: Global AgriSystem Pvt. Ltd. Repo

Cold Chain: India

Food Sector
User Industry
Food

India

Growth
( CAGR )

Processed Food

$ 17.8 Billion

13.5 %

Agriculture

$ 200 Billion

3.8 %

Branded Frozen Source:$Ministry

212 Million
20-25
% Industries,
of state for Food
Processing
CCI Report
Food

Bio-Pharmaceutical Sector
User Industry

India

Pharmaceutical

$12 Billion

Growth
( CAGR )
10-11 %

Clinical
Research

$ 2.2 Billion

23 %

Generic Drugs

$ 11 Billion

17 %

Healthcare

$ 36 Billion

Sources : AIMA, BCG,

CII 15 %

Current State: Cold

Chain India

State wise Distribution of Cold Chains

Microsoft Excel
97-2003 Worksheet

Commodity wise Distribution Of Cold

Storages

Microsoft Excel
97-2003 Worksheet

Source: http://agmarknet.nic.in/coldstorage.h

Cold Chain: Daily

Consumption in India
9000 trucks of fruit
14000 trucks of vegetables
4000 trucks of potatoes
8000 trucks of onions
13 Lakh Chickens

Source: Ingersol Rand at ICE EXPO 201

Top Players in India

1) Snowman Frozen Foods
A joint venture between Gateway
Distiparks, Mitsubishi Corp &
Nichirei Logistics Group. Nichirei of
Japan is the fourth largest in this
business in the world
Income $10.2 million in 2010
2) Fresh and Healthy Enterprises
A subsidiary of the state-owned
Container Corporation of India
(Concor), which deals in
transporting containers via rail
Indias largest CA store with
capacity of 12,000 MT at Rai in
Sonepat, Haryana.
3) Coldstar Logistics
Incubated by Tuscan Ventures, a $
50 million venture capital fund in
2010.

4) RK Foodland
A 35 year old 3pl company with
pan-India presence.
Clients include Dominos, Abbott,
GSK, Cadbury.
5) GATI RedSun
A leading cold chain company for
perishable goods and frozen items
The Hyderabad-based Gati recently
bought a majority stake in the
company. Gati plans to scale up
operations in cold chain logistics
6) Adani Agrifresh
A logistics venture formed by the
Gujarat-based $ 6 Billion Adani
Group
Has invested $ 40 Millions in setting
up 3 CA stores in HP.
Promotes FARMPIK Brand in North

COLD CHAIN: TRENDS IN

INDIA

Backward Integration by Retail companies

Many Ice factories have converted their factories into
cold storages
FOOD SECTOR
Increase in frozen food consumption, meat, fish, canned,
instant food items
Acceptance of frozen vegetables, changing mindset
Increase in per capita income increases dairy, poultry
consumption
BIO-PHARMA SECTOR
Development of vaccines,
Increase in clinical trials logistics
Increased share of refrigerated drugs
TECHNOLOGICAL TRENDS
Some reefers are equipped with a water cooling system,
which can be used if the reefer is stored below deck on a
vessel without adequate ventilation to remove the heat

Classification of cold chains

Negative
temp.
(Frozen
Material)
Cold Chain

Positive
Temp.
(Chilled
Material)
Cold
Chain

Single
Product
Cold
Chain

Multi
Product
Cold
Chain

Supply
Side Cold
Chain

Distribu
tion Side
Cold
Chain

Cold Chain: Backend

Refrigeration system
Insulated Wall Panels, Metal Roofing system
Material handling equipment's
Pallet racking system
Dock equipment's and special doors
Special cold storage doors
Contractors and Civil Engineers
Vehicle reefer units
Vehicle supply Fresh line Processing equipment
Process Grading and Sorting
Consultants
Food Service Distribution Centre concept design
consultant
Local Indian Architectural & Structural Consultant:
Stup Consultants
Integrated Building Management System : Tata

Backend: Refrigeration
Providers
WAREHOUSES (Static Refrigeration)

Major Compressor Manufacturers:

FREON: Danfoss (Major market share 50%),
Emerson, Bitzer
AMMONIA: Kirloskar Pneumatic Ltd (60% Market
share), Frick (Indian Companies)
TRANSPORT REFRIGERATION (Refrigeration on
the move)
Source: Primary Research Akhil Lutharia, Consultan
Carrier, Thermoking, Blue
Star Total of 70 %

Insulation Experts
Owens corning
Lamiflux
Bayer Material Sciences

Material Handling Equipment

Forklifts
Voltas Limited
Godrej & Boyce

Pallet Racking and shelving

systems

SSI- Schaefer
Godrej & Boyce

Doors and Docks

Metaflex
Dan Foss
Lloyd Insulations (India) Limited
Salco
HiCon
Rite-Hite

Backend: Role of
Consultants
Refrigeration Equipment

Investigate mechanical equipment (evaporators,

compressors, condensers, humidifiers, etc.),
Recommend and implement changes, if
necessary, to improve functionality or reduce
operating costs, or both.
Utility Audits
Review of previous and current configuration,
usage and billings.
Ripening/Precooling Technology
Optimize results with existing equipment, and
also show how investments in new equipment
could improve the bottom line.
Project Design & Management
Needs Analysis, Design, and Construction

Transportation
Reefer trucks

First Mile & Last

Mile Delivery

Sample Cold
Room

Cold Chain Cost breakup

Capital
Expenditure
Construction cost
Cooling Equipment
Power Consumption
Diesel Generator
Forklifts
Pallets
Reefer Trucks

Costs
Rs. 300-350 per sq ft.
Rs. 18,000-20,000 per MT
3.5 KW per MT
Rs. 50-80 lakhs
Rs. 4-7 lakhs
Rs. 500
Rs. 25-30 lakhs for 9-13
tonnes
Source: Anderson Consulting Report on cold chain

Cold Chain Cost breakup

Office + Logistics

Costs

Communication System
(VSAT Links)
Office infrastructure

Rs. 8-10 lakhs

Computing Power

Rs. 5 lakhs

Website Design

Rs. 1-2 Lakh

Working capital

Rs. 3 crores

Blanket Costs
( Excluding civil constr.)

Rs. 50,000-52,000 per

MT + reefer vehicles

Rs. 50-60 lakhs

Source: Anderson Consulting Report on cold chain

Drivers
Growth in organized retail
Reliance, future, bharti- walmart, etc.
Growth in processed food sector
$ 70 bn in 2010. Projected growth to $ 150bn
by 2015
Changing consumption pattern
Increase in consumption levels
22 million MT supply against 31 million MT
demand
Government Initiatives
Mega food parks, Subsidies

Challenges
Lack of Infrastructure:- Roads and Real Estate
Lack of logistical support
Uneven distribution of cold chains:- Geography and
Inter convertibility.
High capital investment
-Rs.80-90/sq.ft.($ 1.6-2.0) against Rs.40/sq.ft. ($
0.6) in west
Power supply
-17-18% power deficit
-30% of total expenses against 10% in west
Management of different temperatures
Awareness and Mindsets
Error Irreversibility
-Highly temperature sensitive cargo

Government Policy &

Initiatives
1. All the relevant
schemes pertaining to the
Cold Chain Industry have been outlined and a
separate compendium has been prepared
containing all these schemes.
2. A Special Purpose Vehicle has been set up
for the Cold Chain Logistics
3. Setting up of National Centre for Cold Chain
Development (NCCD).
NCCD Activities are:
Training and Capacity Building
Research and Development
Building standards through International
benchmarking
Interaction with National / International
bodies for development of cold chain

Government Incentives
Some of these incentives are
The Budget 2011-2012 provided infrastructure status to the
cold chain sector.
The Budget 2010-2011 included duty-free import of
refrigeration units, which is required to make refrigerated
vans or trucks. It also exempted trailers and semi-trailers
used in agriculture from excise duty.
The Budget exempted air-conditioning equipment and
refrigeration panels used in cold chain
infrastructure, including conveyor belts, from excise duty.
It also extended excise duty exemption to conveyor belts.
Budget 2009-2010, Government of India introduced tax
benefits for companies making investments in setting up
cold chain facilities
Other past incentives include access to external commercial
borrowings, 100 per cent FDI and provision of up to 25
per cent project costs involved in setting up cold storage

Need Gaps
Lack of knowhow and trained manpower
Lack of backward & forward linkages to
supplement cold chain:- High Value and
Value Preservation.
High cost of power: Agricultural sector is
offered subsidized power tariffs by the
Government of India,
Cold chain industry is instead subjected to
industrial power tariffs.

Need Gaps
104 million metric tons of Perishable
produce is transported between cities
each year. But Only 4 million metric
tons moves via reefer mode.
Problems of Optimization in reefer
transport: Lack of two-way cargo movement.
Interstate barriers, intercity/state taxes, and bad
roads are some of the issues which increase
operating costs, delay timely deliveries and reduce
the efficient utilization of fleets.

Need Gaps
Infrastructure: Coolers, warehouses,
refrigerated trucks, carriers, shopping malls
and others. Needs to study the potential risks and
the return on investment (RoI)
Third-party logistics:
Manual- handling reduces the product quality and
life.
Lack of end-to-end solutions. One can also
adapt state-of-the-art techniques such as cross
docking that will reduce the transit times and
inventory.

Need Gaps
Reefer location tracking challenges
(Technology effectiveness & penetration
low)
Discontinuous Energy Supply for hours
(Backup power is very expensive)
Lack of 3rd Party solution providers for
small players. Geographical and service
range expanding on project basis from big
players
Education and awareness:- Low
acceptance due to high costs

Thank You