The challenge of managing your own cold storage

The challenge of managing your own cold storage

The global cold storage market size has been growing well in recent years, estimated to reach USD 340.3 billion by 2025 from USD 233.8 billion in 2020 with an annual growth of 7.8% (researchandmarkets.com). The source of the growth in this cold storage sector comes from rising demand for fresh and frozen goods as well as consumer awareness to eliminate food wastes. In addition, the growth of international trade is a catalyst to this rise, generating more demand for cold storage. Nevertheless, managing an efficient and productive cold chain requires high skilled workforces, an initial investment in infrastructure as well as advanced technology to enhance the accuracy of the system and minimize manual operation management.

Check Out the Exciting Logistics Trends in 2020

 

Let’s see common challenges within the cold chain sectors as follows:

 

Skilled workforce and labor expense

In fact, the labor market has become aging in recent years, especially in the warehouse sector, even more in the cold storage sector which requires an even more young skilled workforce to not only do physical jobs but also operate systems accurately. Labor expense also occupies 60% of the total cost of warehouse management, not mentioned to high turnover rate around 15-20% in numbers of distribution centers. This challenge requires warehouse managers to recruit the right people, continue to train employees, and offer rewards to retain them, which is one of the critical factors to success in warehouse management.

 

High investment in infrastructure

Cold storage equipment and facilities need huge investment from the company. Good locations which should be close to an urban area in order to leverage good infrastructure and connections with ports, airports, industrial zones will require more expense to pay for. In addition, investment in warehouse management software to input data, track and trace product shelf life as well as utilize space and manpower is another costly expense for the business.

 

More requirements for food safety

In the frozen industry, it’s critical to keep products in good conditions including the right temperature and humidity precisely. The preservation conditions for frozen products should be controlled closely in the entire food supply chain from manufacturing to end consumers, including transportation. Fresh produce and perishable foods are even harder to handle and control when moving in and moving out of the cold storage. This requires fast fulfillment and accurate move to the right places in the right temperature and humidity levels. Food safety regulations also need accurate data input throughout the warehouse operation process to keep track of product shelf life precisely.

 

Manual operation process

For small and medium enterprises (SMEs), huge investment in automated warehouse management facilities and equipment is challenging. Therefore, the manual operation process is unavoidable with expensive labor costs. However, with the rising demand for frozen categories, it’s fundamental to consider future investment in cold storage or outsource this to 3PL logistics partners to handle products properly and efficiently. Outsourcing warehouse services would minimize risks and enhance productivity and efficiency for the warehouse, business owners would have more time to focus on research and development as well as other management tasks.

By working with quality and experienced partners on door-to-door services, Warehouse Transport Group is pleased to provide innovative supply chain solutions for producers’ sustainable growth and cost-saving. We have a diverse group of vendors from the West coast to the East coast as well as international destinations in the US, Latin America, Europe, and Asia. We handle your stuff like ours and make sure products arrive in the right place at right time, in good quality with a professional working manner.

We are here to help! Let’s set up a no-commitment supply chain call and talk through some new ideas you could benefit from.

Contact me any time:

Your trusted partners

Warehouse Transport Group