Refrigerated Cold Chain – Will it Pick Up Heat in Near Future?

Few weeks back when I was shopping for groceries, upon requesting a particular brand of yogurt the shopkeeper tells me, "Madam, we don’t keep that brand these days. The distributors don’t have refrigerated vehicles and because of this product goes bad and customers are unhappy every time we keep it." This was an interesting find for me as I had recently worked on a report "Integrated Cold Chain Industry in India" proving the fact that we need superior integrated cold chain framework, especially refrigerated transport in India.

Supply gap in refrigerated transport

Transportation through reefer vehicles such as trucks, containers, ships, and trains to transport perishable products is refrigerated transport. India currently has capacity to transport ~105million metric tonnes (MT) of perishable produce across Indian cities, but of this ~100million MT is transported via non-reefer mode, while only ~4 million MT is transported using refrigerated transport leading to loss of over 40% produce every year.

The reefer trucks with carrying capacity of ~4million MT are operational now, but only 20% of them are used for transporting agriculture produce, while rest are used to transport processed food, milk and milk products. According to industry experts, there is huge supply deficit and India needs around ~12million MT carrying capacity to meet the current need.

Will the supply be sufficient in years to come?

The study by ValueNotes reveals that the refrigerated transport is anticipated to reach 20million MT by FY 2017, but witnessing the current scenario the question still remains "Is it enough?

I believe that addressing this deficit alone is not the solution, but the complete ecosystem of cold chain logistics needs to be relooked at in order to combat the huge losses incurred. Because the challenge is not just lack of supply of refrigerated transport, but it also revolves around the operational costs and delay in timely delivery of harvest, due to the seasonality of the produce leading to huge agri-produce losses.

How is distribution different in India?

In a recent press release , Business Standard quoted Captain Pawanexh Kohli, chief advisor of NCCD "We have suggested is that refrigerated vans and trucks should be allowed hassle-free movement across all toll nakas and any mandatory inspection should be done only once because in transportation of perishable commodities time is a key factor and even a delay of few hours could make the commodity unfit for human consumption", but what I believe is that it is not just matter of hassle free movement of reefer trucks/vans that needs to be addressed, rather we should concentrate on developing or rather improving the loading docks for reefer trucks/vans, technology used in reefer trucks/vans to ensure the necessary temperatures are maintained at supply points. This is very important because the refrigeration distribution in India is different than other developed countries.

At loading docks: Due to unpredictable nature of order quantity, the sorting of stock is usually carried out at drop off points as against at loading hub in India. This leads to longer duration of exposure to ambient temperature leading to higher temperature within the reefer, in turn affecting the shelf life of the product.

Reefer Technology: In developed countries with well established cold chain ecosystem, refrigerated distribution has less than 4-5 drop off points. While due to fragmented retail sector, India witnesses a maximum of 25-30 drop-off points with about 120-150 seconds of door opening at each drop off point, as against 15-20 sec door opening in developed countries. This long duration at drop-off points adds on to the load handled by reefer trucks/vans.

Until the above two sections in the supply chain are not addressed; it would not help if we have reefer trucks racing past the toll nakas to supply the perishable commodities.

Road ahead:

According to our industry report "Integrated Cold Chain Industry in India", India has potential to be a food supplier of the world, provided the challenges in integrated cold chain logistics are addressed. A well developed integrated cold chain will not only help India in reducing wastage of agriculture produce, but will also help in garnering huge revenues in exports. To combat multiple challenges, Indian Government has come up with various initiatives such as capacity addition in FTWZs and logistics parks, additional road capacity, port infrastructure, subsidy and tax exemptions in setting up cold chains etc.

Although the initiatives have been announced, the question stills stands if they will create enough heat for the cold chain industry to pick up pace in next few years in India?