Increased demand for generic pharmaceutical products and consumption of perishable foods in developing economies is going to drive significant growth in the cold chain logistics market in the next few years. With this demand for better visibility of products in the logistics networks, to minimize wastage, and to ensure product integrity, technology that enables better monitoring and analytics in real time will play a major part in many cold chain logistics networks.
It is not just developing markets that are seeing growth in the cold chain. North America is the largest market for the cold chain, according to Persistence Market Research. It says that increasing demand of daily products, vegetables and fruits, along with more exports of these products has boosted the cold chain market.
In the Asia-Pacific region, various government initiatives are also impacting the market – for example, the Indian government is opening mega food parks, which require temperature controlled vehicles and temperature-controlled warehouses. There, the government has also allowed 100 percent FDI (foreign direct investment) in the cold chain industry. The report also says that in Europe, Germany is one of the largest markets due to the increased consumption of frozen foods.
In terms of potential size in relation to the refrigerated storage and refrigerated transport part of the global cold chain market, it is expected to reach a value of US$ 233,476.7 million by 2019, at a CAGR of 15.6 percent from 2014 to 2019, according to Research and Markets. It also suggests that North America accounted for the largest share – 40 percent – of the cold chain market in 2013. The market is mature in regions such as North America and Europe due to the technologically advanced systems for refrigerated storage & refrigerated transport, the rise in demand for perishable foods, and government initiatives that encourage the export and import of these foods in these regions.
Healthcare logistics cold chain requirement grows too
Healthcare products such as vaccines and blood plasma products, frozen pharmaceuticals and insulin require specific temperatures to be maintained throughout storage and transportation. The increased demand in developing economies for these and other pharmaceutical products has created a pressing need for temperature-sensitive healthcare transportation with the use of temperature tags on products.
Recognizing this, research firm TechNavio, says that the global healthcare cold chain logistics market is expected to grow at a CAGR of 13.31 percent from 2014-2019. In its report, it says increased investment in cost-effective technologies in developing markets, especially India, is motivating vendors to enter this region.
Technology becomes critical in enhancing and assuring product integrity
In order to meet these requirements, both in food and pharmaceuticals, there’s growing investment in healthcare infrastructure and technologies. In the cold chain in particular, there is an emergence of transport vehicles equipped with event logging and electronic monitoring systems, to enhance the effectiveness of supply chain.
In fact, this will be a key area of discussion at the forthcoming Cool Chain & Controlled Room Temperature Logistics Conference in Frankfurt, Germany on 26-29 January 2015. Among the discussions planned for supply chain integrity, there will be a look at how temperature data can be used to improve and better control the cold chain.
It will also look at what to do with the data – how implementing a centralized global database can enable an overview of all excursions and provide complete insight into the cold chain, and overcoming fears of using ‘cloud’ storage.
This will be important as big data analytics becomes an integral part of many business processes in the coming years. The growing use of machine to machine (M2M) communications, which allows sensors to send real-time data via mobile and wireless communications networks, will generate lots of data – this data might be continuous readings of temperature or other key business critical parameters that need to be monitored.
Systems like Dyzle’s cold chain monitoring platform send the huge volumes of data generated by these sensors to secure storage in the cloud, which makes it accessible for real-time monitoring and for reporting. This data is often used both for historic recording processes, as well as to produce automated reports to demonstrate GDP compliance for example; in addition, it also helps to assure customers and consumers that the products are safe to use.
Technology such as this will therefore become critical in reporting key business performance indicators (KPIs), and will become an integral part of the logistics as well as business management process.
This will be especially significant as the volume of temperature-sensitive products that are shipped around the world grows; hence the demand for proper cold chain logistics with the ability to prove integrity with will become more important, since pharmaceutical companies will need the proof to be able to sell their products. The only way this can be solved is to have sensors and be able to make measurements, to handle lots of data, and to be able to record and interpret that data according to the market requirements.