Cold Chain Logistics

Sector Analysis
Anajli Midha Ashish Gupta Durgesh Paridhi Pooja Dadlani Sunaina Kain

 Executive summary:

What is Logistics ?
Logistics is the management of the flow of goods from origin to destination to meet customer requirements
Transportation

Security

Inventory

Right Time, Right Place @ Minimum Cost

Packaging

Logistics
Warehousing

Started as a business concept in 1950s

Information
Management

Source: Global Agri System Pvt. Ltd. Report

What is Cold Chain Logistics?

TEMPERATURE

LOGISTICS

CONTROL (REFRIGERATION)

COLD CHAIN LOGISTICS

Major Sectors : Food and Beverages, Bio-Pharmaceutical

The Cold chain logistics infrastructure

Supply Procurement Precooling System Farms (Rural Markets) Manufacturers Transport Refrigerated Trucks Refrigerated Railway Wagons Refrigerated Cargo Containers Storage Cold Storage Warehouses Transport Refrigerated Trucks Refrigerated Railway Wagons Refrigerated Cargo Containers End Customer Retail, Terminal, Markets, Factory, Ports, Airport

Global Cold Chain Facts: Food Sector

Fruits & Vegetables

Meat

Fish & Seafood Dairy Products

Beverages

In European and American developed countries, the rate of refrigerated transport is up to 80-90%, pre-cooling preservation is up to 80-100%, and the loss rate is below 5%.
25% of the total food production is processed foods. A booming industry

Cold chain in Food Sector

Industry Temperature Standards

13C

Banana

2C

Chill

-18C

Frozen

-29C

Deep Frozen

Temperature and Shelf Life

Product Apple Bananas Bell Peppers Cabbage Eggs Onions

Refrigerated Shelf Life Optimum (Days) Temperature (Celcius) 90-240 7-28 21-35 14-20 180 30-180 0 13.5 7 1 1.1 1

Lettuce
Fresh Meat (beef, lamb, pork, poultry)

12-14
14-65

0.6
-2

Oranges
Pears Potatoes Seafood (shrimp, lobster, crab) Strawberries Tomatoes

21-90
120-180 30-50 120-360 5-10 7-14

7
-0.6 10 -17.8 0.6 12

Global Cold Chain Facts: Bio-Pharmaceutical

Pharmaceutical

Biotech

Vaccines

Blood Products

Clinical Trials

Global Bio-Pharma Cold-chain market 2010 : $5.1 billion 2011 : $6.6 billion 2014 : 7 of the top 10 global pharma products in will require cold-chain handling Vaccines growing on average 8% per year for the next five years
Source: www.fiercebiotech.com/press-releases/

source: www.coldchainpharm.com/

Cold chain in Pharmaceutical Sector

Global Cold Chain- Pharmaceutical Sector

Bio-pharma logistics spending growth

Cold chain logistics spending expanded from $5.1 billion in 2008 to $6.6 billion in 2011

Cold chain shipment growth by region

Sources: http://www.aircargoinsights.com/news/cold-chain-pharmaceuticals-worth-billions/ http://www.aircargoinsights.com/more-market/global-biopharma-demand-on-the-rise/

HISTORY & BREAKTHROUGHS

1797 British fishermen used natural ice to preserve their fish stock piles Late 1820s Movement of food from rural areas to urban consumption markets 1851s Mechanical refrigeration and Air-conditioning plant patented by Dr. John Gorrie 1867 The refrigerated railroad car was patented by J.B. Sutherland of Detroit 1870s Trade of food between colonial powers and their colonies France received mutton carcasses from South America Great Britain imported frozen beef from Australia, pork from New Zealand 1882 SS Dunedin, the first ship to complete transportation of frozen meat. 1910 600,000 tons of frozen meat was being brought into Great Britain alone. 1920s Group of CFCs - Freon used in refrigeration was developed.
Source: http://people.hofstra.edu/geotrans/eng/ch5en/appl5en/ch5a5en.html

HISTORY & BREAKTHROUGHS

The first shipment of refrigerated beef was made from the Chicago stockyards to the East in an ordinary box car packed with ice. 1866 Parker Earle of Illinois shipped strawberries in iced boxes by rail from southern Illinois to Chicago. 1867 The first patent for a specialized refrigerator car (US Patent #71,423) was issued to JB Sutherland of Detroit, Michigan. 1868 William Davis of Detroit developed a refrigerator car cooled by a frozen ice-salt mixture, and patented it in the USA. The patent was sold to George Hammond, a local meat packer who went on to amass a fortune in refrigerated shipping. 1869 Henry Peyton Howard (1829-1913) of the United States transported a shipload of beef frozen in a salt-ice mixture from Indianola, Texas, to New Orleans and served it in hospitals, hotels and restaurants. 1873 Timothy C. Eastman exported chilled beef by ship from America to London, and shortly thereafter built up his trade to an annual tonnage of around 10,000 t. The insulated cargo space was cooled by ice, which was loaded on departure. The success of this method was limited by distance and climate. 1876- French engineer Charles Tellier and the steamship Frigorifique achieved the first overseas 1877 shipment of meat under artificial refrigeration. Three methyl-ether refrigerating machines kept the cargo in a chilled state during the 12,000 km voyage from France to Argentina and the return trip. The preservation of the meat was less than perfect; full success would have to wait until the voyage of the Paraguay.

1857

Source: http://www33.brinkster.com/iiiii/inventions/reftranstimeline.asp

HISTORY & BREAKTHROUGHS

1877- The French vessel Paraguay, equipped with refrigeration machinery by Ferdinand Carr, 1878 traveled from France to Buenos Aires and back. 150 t of meat, kept at -27 to -30 deg C,

arrived in Argentina in excellent condition after 50 days. 1878 Gustavus F. Swift (1839-1903) of the United States put into operation a refrigerator car to ship fresh meats. The car body was well insulated and the interior cooled by ice. Fifteen years later the operation had expanded to 97 thousand units. 1879 Henry Bell (1848-1931) and John Bell (1850-1929) of Scotland and Joseph James Coleman (1838-1888) of England completed the Bell-Coleman dense-air machine on the Anchor liner Circassia, which successfully brought a cargo of chilled beef from the USA to London. 1879- The Strathleven, equipped with a Bell-Coleman air machine and loaded with beef, mutton, 1880 butter and kegs, sailed from Melbourne to London and arrived with the frozen cargo in good condition after a 9-week voyage of about 24,000 km. 1880 The first patent for a mechanically refrigerated railcar was issued in the USA (#230615, to Charles William Cooper). 1881 Alfred Seale Haslam (1844-1927) of England equipped the liner Orient with Haslam refrigeration compressors. He bought the Bell-Coleman dense-air patents in 1878 and eventually equipped four hundred plants and ships with Bell-Coleman machines.

Source: http://www33.brinkster.com/iiiii/inventions/reftranstimeline.asp

HISTORY & BREAKTHROUGHS

1885 Berries from the Norfolk (Virginia) area were shipped by refrigerator car to New 1887 1888 1888 1889 1890 1890 1898
York. Parker Earle joined F.A. Thomas of Chicago in the fruit shipping business. The company owned 60 ice-cooled railcars by 1888, and 600 by 1891. An experimental Chicago-to-Florida shipment of beef from Armour and Company was made in a car cooled by ethyl chloride compression machinery. Florida oranges reached New York under refrigeration for the first time. The first cooled shipment of deciduous fruit from California entered the New York market. In London, first mechanically refrigerated barge introduced. After acquiring the patent rights of Franz Windhausen's CO2-compression refrigeration system, J. & E. Hall installed the first marine CO2 machine on the Highland Chief. Russia put its first refrigerator cars into service. Russia had 1900 such cars by 1908, 3000 by 1910, 5900 by 1916. The cars were employed mainly for transport of Siberian butter. The journey from Siberia to Baltic ports lasted about 12 days. Reicing stations were set up each 2000 km.
Source: http://www33.brinkster.com/iiiii/inventions/reftranstimeline.asp

HISTORY & BREAKTHROUGHS

1899 1900 1900 1900 1901 Refrigerated fruit traffic within the USA reached 90,000 t per year. Transport from California to NY averaged 12 days in 1900. A worldwide survey found 356 refrigerated ships, 37% of which had air machines, 37% ammonia compressors and 25% CO2 compressors. Refrigerator cars in the USA numbered about 50,000. During the year, Great Britain imported 360,000 metric tons of refrigerated meat: 220,000 t from Argentina, 95,000 t from New Zealand, and 45,000 t from Australia. The first refrigerated banana ship, the Port Morant, was equipped with a CO2 machine and carried 23,000 stems at controlled temperature from Jamaica to England. Carl von Linde equipped a Russian train with a mobile mechanical refrigeration plant to distribute cooling to the cars carrying the goods. Similar systems continued to be used in Russia through at least 1975. According to a study of Lloyd's Register, 460 ships had refrigerating plants in 1902. The marine refrigeration industry at this time was dominated by the British. US pomologist G. Harold Powell introduced the technique of precooling, or removing field heat from the crop as rapidly as possible before transport.
Source: http://www33.brinkster.com/iiiii/inventions/reftranstimeline.asp

1901

1902

1904

HISTORY & BREAKTHROUGHS

1906 Pacific Fruit Express began operations with more than 6,000 refrigerated cars, 1907
transporting fruit and vegetables across the United States from Western producers to Eastern consumers. US traffic in refrigerated fruit reached a yearly total of 600,000 t, up from 430,000 t in 1905. Great Britain refrigerated meat imports rose to 760,000 t/year. By this time British company J. & E. Hall had installed 1800 CO2 refrigeration machines in ships. British fleet included 230 refrigerated ships with total cargo capacity of 440,000 t. The number of thermally insulated railcars in the USA amounted to about 100,000. Most of these were cooled by ice. London used 120 metal barges of 60 to 120 t, insulated or mechanically cooled, for transport of meat on inland waterways. The Pacific Fruit Express had 34,000 refrigerator cars and the Fruit Growers' Express 22,000. Mechanically refrigerated road vehicles, especially for the delivery of milk and ice cream, began to appear around this time.
Source: http://www33.brinkster.com/iiiii/inventions/reftranstimeline.asp

1910 1910 1913 1913 1923

1925 19251930

HISTORY & BREAKTHROUGHS

1931 1931 1935 The total volume of ice-cooled railcar cargo space in America was of the same order as that of public cold stores at the time (12.5 million m, vs. 13 million m). The number of refrigerator cars in the USA reached a maximum of about 183,000. Refrigerated imports into Britain in 1935 totaled 1 million metric tons of meat, 500,000 t of butter, 130,000 t of cheese, 430,000 t of apples and pears, and 20 million stems of bananas. The Italian army used 150 refrigerated containers to transport frozen meat to its troops on the Ethiopian front. Great Britain and the Netherlands had also built prototype refrigerated containers by this time. The USA had roughly 18,000 vehicles for refrigerated road transport, between 2000-2500 of which were mechanically cooled. Many of the rest were kept cold by solid carbon dioxide ("dry ice"), regular ice, or eutectic plates. The number of these vehicles, as well as the proportion that were mechanically refrigerated, steadily grew during the next few decades with the growth of the trucking industry and the development of superhighways.
Source: http://www33.brinkster.com/iiiii/inventions/reftranstimeline.asp

1936

1939

HISTORY & BREAKTHROUGHS

1949
1950s Refrigeration system made its way into the trucking industry by roofmounted cooling device, patented by Fred Jones. Temperature controlled movement of pharmaceuticals and medical supplies

1950s In the United States, Food and Drug Administration restrictions over the stability of the cold chain incited many of these companies to rely on specialty couriers rather than completely overhauling their supply chain facilities. A specialized cold chain industry was born After 1960s* Blown air containers were replaced by self powered containers.

2010 Fed ex using GPS for tracking. Fedex Sense Aware

Source: http://people.hofstra.edu/geotrans/eng/ch5en/appl5en/ch5a5en.html

HISTORY & BREAKTHROUGHS

1970, Tropicana orange juice was shipped in bulk via insulated boxcars in one weekly round-trip from Bradenton, Florida, to Kearny, New Jersey. By 1972, they were carrying around 1,000,000 US gallons (around 38,00,000 Litres )

Illinois Central Railroad #14713, a ventilated fruit car dating from 1893

A circa 1870 refrigerator car design. Hatches in the roof provided access to the ice tanks at each end

Top icing of bagged vegetables in a refrigerator car

Unloading frozen pork from the Clan Line ship Clan MacDougall in the mid-20th century

BREAKTHROUGHS IN INDIA
In 2004, Safexpress Pvt Ltd first company in the Indian logistics industry to use the GPS Maersk India, had taken steps to facilitate research in the production, harvesting, warehousing, and packaging of bananas. The company provided end-to-end cold chain logistics support, besides undertaking training of local banana exporters in cold chain management.

BREAKTHROUGHS IN INDIA
Sun logistics, FlexiTank in 2010

BREAKTHROUGHS IN INDIA
Kale Logistics India Develop UPLIFT with ICAAI ( Air Cargo Agents Association of India )

Global Cold Chain Players

The Global top cold chain companies includes PRW companies from Argentina, Australia, Canada, China, Denmark, Finland, Germany, Italy, Japan, Mexico, Norway, Sweden, Vietnam and United States of America Americold logistics LLC , Canada, USA $ 1.62 billion Versacold Argentina, Australia, Canada, New Zealand $ 900 million Millard refrigerated services, Canada, USA $ 230 million Nichirei logistics group inc., Japan, Netherlands, Poland $ 95 million MUK Logistics GmbH, Germany $ 60 million Nordic cold storage LLC, USA $ 27 million Swire cold storage, Australia, Vietnam $7.5 million Gruppo Marconi Logistica Italy

Value Parameters
Product Safety Physical / Chemical / Microbiological Network (Geographical coverage) Transportation Time Temperature Range Availability (Product Range Covered) End to End Solutions (Integrated approach) Temperature & Humidity Control Tracking methods - Temperature and Location Trust and Reliability of service provider Regulatory Compliances Security *Carbon Footprint Cost

Value Parameters (Revised)

Network (Geographical coverage) Temperature Range Availability (Product Range Covered) End to End Solutions (Integrated approach) Temperature & Humidity Control Tracking Methods Real time information feedback Security Cost Trust /Reliability of service provider Flexibility of service provider Ability to meet Tech Specs Regulatory Compliances Carbon Footprint Transportation Time

Stakeholders User Industries

Fruit and Vegetable Businesses Food Processing Businesses Horticulture Livestock Producers Seafood Companies Pharmaceutical companies Hotels and Restaurants Large format retailers and wholesalers Small Retailers Laboratories/ Healthcare Centers Medical Equipment Manufacturers Oil refineries and chemical industries CROs ( Contract Research Organisations)

Infrastructure Warehouse / Cold Storage Owners Refrigeration and Cold Chain Equipment Technology suppliers Refrigeration Solution Providers Specialized Equipment Providers ICDs (Inland Containers Depots) Sea / Air Ports Transport Vehicles Security

Authorities and Associations Government Agencies (Planning commission, customs, etc.) DCGI (Drugs Controller General of India ) CDSCO (Central Drug Standard Control Organization ) IARW ( International association of refrigerated warehouses ) Global Cold Chain Alliances Academic and Research Institutions Growers Association of Fruits and Vegetables

Stakeholders Stakeholders Intermediaries

Logistics Service Provider Cold Logistics players (Shipping lines, Transporters, Container Companies) Warehousing Agents Supply Chain Solution Providers Packaging Service Providers Banks and Financial Institution Consultants from the relevant spheres who are interested in knowledge building. Others Power / Electricity Shelf Life Temperature Humidity Distance Seasonal Changes Roads Connectivity

Cold Chain: India

In India 30 per cent of the fruits and vegetables grown in India get wasted because of lack of cold storage facilities and energy infrastructure. Only 8% of the produce is processed in India Commodity wise Capacity Utilization, 2000 The total cold chain market in India is estimated at $3.2 billion in 2009 Expected to touch $9 Billion by 2015 Growing at 20-25 per cent CAGR Cold chain industry Cold storage 88 % Cold transport 12 % 100 % FDI allowed Commodity Potato Multi purpose Fruit & vegetable Fish Meat Dairy & milk Others (Pharma, Life sciences) Cold chain capacity (Percentage) 92.82* 7.63 1.07 0.73 0.15 0.68 0.36

Source: IBEF

Source: Global AgriSystem Pvt. Ltd. Report

Cold Chain: India

Food Sector
User Industry Food Processed Food Agriculture Branded Frozen Food India $ 17.8 Billion $ 200 Billion $ 212 Million Growth ( CAGR ) 13.5 % 3.8 % 20-25 %

Source: Ministry of state for Food Processing Industries, CCI Report

Bio-Pharmaceutical Sector
User Industry Pharmaceutical Clinical Research Generic Drugs Healthcare India $12 Billion $ 2.2 Billion $ 11 Billion $ 36 Billion Growth ( CAGR ) 10-11 % 23 % 17 % 15 %
Sources : AIMA, BCG, CII

Current State: Cold Chain India

India has a total of roughly 5,400 cold storages with a capacity of 24 million MT, over 90 per cent of which are suitable to store potato products only and are fairly archaic.

State wise Distribution of Cold Chains

Commodity wise Distribution Of Cold Storages

Source: http://agmarknet.nic.in/coldstorage.htm

Cold Chain: Daily Consumption in India

9000 trucks of fruit 14000 trucks of vegetables 4000 trucks of potatoes 8000 trucks of onions 13 Lakh Chickens

Source: Ingersol Rand at ICE EXPO 2010

Top Players in India

1) Snowman Frozen Foods A joint venture between Gateway Distiparks, Mitsubishi Corp & Nichirei Logistics Group. Nichirei of Japan is the fourth largest in this business in the world Income $10.2 million in 2010 2) Fresh and Healthy Enterprises A subsidiary of the state-owned Container Corporation of India (Concor), which deals in transporting containers via rail Indias largest CA store with capacity of 12,000 MT at Rai in Sonepat, Haryana. 3) Coldstar Logistics Incubated by Tuscan Ventures, a $ 50 million venture capital fund in 2010. 3 existing and 9 WIP warehouses across India 4) RK Foodland A 35 year old 3pl company with pan-India presence. Clients include Dominos, Abbott, GSK, Cadbury. 5) GATI RedSun A leading cold chain company for perishable goods and frozen items The Hyderabad-based Gati recently bought a majority stake in the company. Gati plans to scale up operations in cold chain logistics 6) Adani Agrifresh A logistics venture formed by the Gujaratbased $ 6 Billion Adani Group Has invested $ 40 Millions in setting up 3 CA stores in HP. Promotes FARMPIK Brand in North India

COLD CHAIN: TRENDS IN INDIA

Backward Integration by Retail companies Many Ice factories have converted their factories into cold storages FOOD SECTOR Increase in frozen food consumption, meat, fish, canned, instant food items Acceptance of frozen vegetables, changing mindset Increase in per capita income increases dairy, poultry consumption BIO-PHARMA SECTOR Development of vaccines, Increase in clinical trials logistics Increased share of refrigerated drugs TECHNOLOGICAL TRENDS Some reefers are equipped with a water cooling system, which can be used if the reefer is stored below deck on a vessel without adequate ventilation to remove the heat generated. Water cooling systems are expensive, so modern vessels rely more on ventilation to remove heat from cargo holds, and the use of water cooling systems is declining.

Classification of cold chains

Negative temp. (Frozen Material) Cold Chain Positive Temp. (Chilled Material) Cold Chain Single Product Cold Chain Multi Product Cold Chain Supply Side Cold Chain Distribution Side Cold Chain

Cold Chain: Front End

Industry Expos : ICE EXPO (India Cold Chain Expo) Food Tec India Dairy and Food Tech EXPO Food And Bev Tech Trade Magazines Log India TransREporter Logistics Times FoodAndBev Consultants ACR Consulting Cross Tree Consultants Fresh Food Technologies Advertisements Company Websites Direct Sales

Advertisements
Integrated cold chain service provider Typical ads listing various services and stats. QR Code and helpline to guide customers towards further action

Advertisements
3rd Party and Warehousing solutions provider

Advertisements
Backend products provider Product display State wise contact details, QR Code, toll free no.

Ads of Equipment providers

Cold Chain: Backend

Refrigeration system Insulated Wall Panels, Metal Roofing system Material handling equipment's Pallet racking system Dock equipment's and special doors Special cold storage doors Contractors and Civil Engineers Vehicle reefer units Vehicle supply Fresh line Processing equipment Process Grading and Sorting Consultants
Food Service Distribution Centre concept design consultant Local Indian Architectural & Structural Consultant: Stup Consultants Integrated Building Management System : Tata Honeywell Supply Chain Solution consultant : Keogh Consulting Source: Primary Research ICE EXPO 2011

Backend: Refrigeration Providers

WAREHOUSES (Static Refrigeration)

Voltas

Carrier

Kirloskar Neumatic

Ingersoll Rand

IBK Refrigeration

Alfa Laval

Major Compressor Manufacturers: FREON: Danfoss (Major market share 50%), Emerson, Bitzer AMMONIA: Kirloskar Pneumatic Ltd (60% Market share), Frick (Indian Companies) TRANSPORT REFRIGERATION (Refrigeration on the move) Carrier, Thermoking, Blue Star Total of 70 % Market share
Source: Primary Research Akhil Lutharia, Consultant

Insulation Experts
Owens corning Lamiflux Bayer Material Sciences

Material Handling Equipment Forklifts

Voltas Limited Godrej & Boyce

Pallet Racking and shelving systems

SSI- Schaefer Godrej & Boyce

Doors and Docks

Metaflex Dan Foss Lloyd Insulations (India) Limited Salco HiCon Rite-Hite

Backend: Role of Consultants

Refrigeration Equipment Investigate mechanical equipment (evaporators, compressors, condensers, humidifiers, etc.), Recommend and implement changes, if necessary, to improve functionality or reduce operating costs, or both. Utility Audits Review of previous and current configuration, usage and billings. Ripening/Precooling Technology Optimize results with existing equipment, and also show how investments in new equipment could improve the bottom line. Project Design & Management Needs Analysis, Design, and Construction Management for additional capacity.

Transportation
Reefer trucks First Mile & Last Mile Delivery

Sample Cold Room

Cold Chain Cost breakup

Capital Expenditure Construction cost Costs Rs. 300-350 per sq ft.

Cooling Equipment
Power Consumption Diesel Generator Forklifts Pallets Reefer Trucks

Rs. 18,000-20,000 per MT

3.5 KW per MT Rs. 50-80 lakhs Rs. 4-7 lakhs Rs. 500 Rs. 25-30 lakhs for 9-13 tonnes

Source: Anderson Consulting Report on cold chain

Cold Chain Cost breakup

Office + Logistics Communication System (VSAT Links) Office infrastructure Computing Power Website Design Working capital Blanket Costs ( Excluding civil constr.) Rs. 8-10 lakhs Rs. 50-60 lakhs Rs. 5 lakhs Rs. 1-2 Lakh Rs. 3 crores Rs. 50,000-52,000 per MT + reefer vehicles Costs

Source: Anderson Consulting Report on cold chain

Drivers
Growth in organized retail Reliance, future, bharti- walmart, etc. Growth in processed food sector $ 70 bn in 2010. Projected growth to $ 150bn by 2015 Changing consumption pattern Increase in consumption levels 22 million MT supply against 31 million MT demand Government Initiatives Mega food parks, Subsidies

Thank you

reefers
Shipping lines Maersk Line, Evergreen Line, Hamburg Sud, Hapag-Lloyd, K Line, Mac Andrews, MISC, CSAV-Norasia, Rickmers Line, Safmarine,Yang Ming Line, UASC and Zim Line. Indias stateowned shipping company Shipping Corp. of India, is also a member.

Source: http://www.livemint.com/2007/09/18020040/ Shipping-refrigerated-cargo-fr.html