Where are the Cold Chain Logistics Opportunities?

Global demand for cold chain logistics continues to grow as urbanization expands and government regulations tighten.

According to an Air Cargo News article, a spokesperson from Panalpina commented, ““The consumption of more perishables is a macro trend that will continue. It is mixed in with urbanization and more people globally moving into the middle class. They are demanding more from food and other products that require careful temperature control.” In a separate article, the global head of life sciences and healthcare for DHL Global Forwarding noted, “The life sciences and healthcare industry is regulated by increasingly stricter compliance requirements that stretch beyond the historic boundaries of GMP and GSP standards. At the same time, dealing with increasingly sensitive pharmaceutical products, often of high value, that have specific handling and temperature tolerances brings new complexity to the supply chain”.
Indeed, cold chain facilities are growing around the world. According to a Global Cold Chain Alliance survey, global refrigerated warehouse capacity grew to 600 million cubic meters this year. Much of the development occurred in emerging markets such as China, where refrigerated warehouse capacity grew 41%, between 2014 and 2016.
We recently asked social media followers which geographic region had the greatest growth potential for cold chain logistics. It seems that almost everywhere there is potential for growth but Europe just edged out Africa/Middle East and APAC for the greatest potential for cold chain logistics.
growth potential cold chainGovernment trade data further corroborates our survey results. In terms of value of perishable goods transported intra-Europe is the largest market with 38% of the global share followed by intra-APAC with 12.9% and intra-North America with 6.5%. Within the intra-Europe market for perishables, the Netherlands to Germany is the largest country pairing. This could be related to the strong capabilities in and around the surrounding area of Amsterdam’s Schiphol International Airport.
Schiphol’s focus on pharmaceuticals and other perishables dates back several years when the airport and business groups came together to promote and create perishable corridors and trade lanes between the airport and other important markets. Indeed, the airport’s location in relationship to road, rail and water links creates a strong multi-modal hub and has attracted many logistics and transportation providers to this area. Among the providers with specific cold chain capabilities in and near the airport are DHL, Kuehne + Nagel, Panalpina, Yusen Logistics, MNX and UPS.
But don’t be fooled into thinking Europe is the only place with great opportunities. As mentioned previously emerging markets is experiencing growth in cold chain warehousing thanks in part to the growing middle classes and even though survey respondents did not cite North America as a location with opportunity, it does have great opportunity. For example, more and more cold chain warehouses are sprouting up close to ports to help make the domestic North American cold supply chain more efficient.
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