Here's how COVID 19 is impacting the cold chain logistics market

Unlike most developed countries, cold chain in India has been restricted to secondary and tertiary distribution segments – for movement of goods from factories to CFAs and from there to distributors. This meant that most of the last mile delivery was either done in ambient conditions or with unsafe, unsustainable solutions resulting in product spoilage and wastage.

Use of effective cold chain solutions was never considered a priority until COVID 19 hit us. As the country grapples with one of its greatest challenges of producing enough vaccines to inoculate every Indian, ensuring delivery of the same to every Indian without spoilage is a daunting challenge.

The lockdowns and restrictions that were imposed because of the pandemic also forced many businesses to revise their business models and switch to home delivery solutions. This too called for effective cold chain logistics solutions. The demand was further spiked by increasing consumer awareness and the need to comply with basic quality standards.

Traditionally cold chain in India has relied predominantly on diesel run refrigerated vehicle solutions. These cooling solutions for cold chain distribution require a continuous power source from a vehicle and runs on diesel, making them very expensive for smaller package sizes. Given the large costs incurred in transportation, conventional solutions remained unviable for most stakeholders forcing them to break the cold chain or use unproven “jugaad”, especially towards consumer/retail end of the chain. This severely impacts product quality and spoils customer experience.

However, today with advanced Phase Change Material (PCM) based solutions, these issues are getting resolved. PCM can provide desired temperature control (from -25oC to +25oC) across enclosures ranging from a 5 litre bag to a 20 feet (10 ton) truck, enabling most manufacturers and transporters to ensure the cold chain is not broken. The core technology uses proprietary PCM heat exchangers and chargers that store thermal energy and release it as required during the transport. Therefore, these solutions need do not need any power source during transport and are independent of the type of vehicle used. This not only offers flexibility on size and transport vehicle increasing access to fragmented general trade, but also reduces the cost significantly.

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Vaccine movement

These solutions have proven to be a boon especially for the movement of vaccines. Highly innovative solutions which use specialised PCM batteries in insulated bags and boxes can cover all temperatures from -70oC ( for

) to -20oC (required for Moderna and Sputnik) and to 2-8 C required for other vaccines like Covaxin and Covishield. They are also able to offer temperature guarantee in Indian ambient conditions (40oC) for 24-96 hours. These solutions enable vaccine manufacturers and transporters to transport vaccines to the remotest corners of the country in dry ambient vehicles thereby helping make our country’s vision of inoculating every Indian a reality.

Climatic conditions also play a role in the cold chain logistics market. A large part of the cold chain transport is seasonal in nature and requires multi temperature fleets even on smaller vehicle platforms. Conventional units which are fixed on trucks need dedicated fleets making cold chain transportation unreliable or impossible for most products and package sizes in India. This impacts food quality and increases wastage. PCM based innovations are easily able to offer vehicle independent solutions that guarantee temperature similar to those offered by refrigerated trucks. These solutions comprise of insulated containers of varying sizes ranging from 500 litres to 2500 litres fitted with PCM batteries that can be loaded and unloaded on dry vehicles depending on transport requirement. These solutions do not require dedicated fleets and offer lower vehicle capex and high fuels efficiency to the transporters. A smaller vehicle not only becomes economical for cold chain transportation, but it also offers a sustainable alternative to diesel based solutions, thereby reducing the environmental impact.

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While all sorts of numbers have been floating around about the potential of cold chain market in India, it can be estimated that it comes to around $2 billion. The actual near-term market for cold chain urban distribution logistics (last mile) considering only specific food and e-commerce segments is close to 1650 crore and based on individual segments, it is growing at 16% CAGR to 3000 crore by 2024-25.

The home delivery segment is growing at a 65%. The actual cold chain penetration in this market is less than 40% in the food space and is going up with increased awareness of the consumers. However, with the increased focus on vaccine distribution, growth in food processing, retail and food delivery markets for perishables, over the next five years is bound to increase each year.

(The writer is founder & CEO, Tessol)



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