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The cold chain needs to change and must become as flexible and transparent as possible and that will take technology, forward-thinking business executives and investments in innovation. Now even Walmart has entered the cutthroat industry, competing with industry giant Amazon in the grocery wars.

Add to this the proliferation of restaurant delivery mobile apps and the party is just starting to heat up. Of the 57 new drug approvals issued by the FDA in , 28 of the 57 are temperature-sensitive products with 23 requiring refrigeration storage and transportation. Five additional products require cryogenic below-zero temperatures.

This is largely due to the transition to biologically-based pharmaceuticals in new product development. In addition, continual growth in vaccines and insulin products is also fueling growth in the temperature-sensitive product sector. Pharmaceutical manufacturers are anticipated to increase production of temperature-controlled vaccines and biologic drugs for such conditions as rheumatoid arthritis and Type 2 diabetes, among other conditions. The increased volume of vaccine and biologic medication production combined with new transportation regulations is driving accelerated growth in the airfreight transportation of pharmaceuticals.

Of the top selling pharmaceuticals thus far in , nearly half are temperature sensitive pharmaceutical products, mainly biologics. Biologic drugs as well as the manufacturing process involved with production, make these pharmaceutical products temperature-sensitive in nearly all instances. Lack of proper temperature-controlled storage degrades the pharma product, making it less effective. Another trend increasing the need for pharmaceutical product refrigeration is the evolution of a variety of precision medicine innovations that range from cellular therapies to biomarker testing, regenerative medicines that use stem cells.

Some of the therapies involve extracting tissue or blood from patients which must then be transported to a facility for some type of genetic or other manipulation then returned to the patient. Each step in this type of therapeutic process is potentially a cold chain task, requiring stringent constraint on monitoring the condition of the shipment. Use of temperature monitoring electronics, insulated containers, refrigerants and other logistics practices are needed to ensure safety in human use.

The nature of many pharmaceutical and life science products makes it necessary to transport, handle and store them within an established temperature range. In some instances, new technology products are required when dealing with specific products, such as data loggers to monitor the storage temperatures of vaccines.

Expansion of Value-Added Services 3PL cold storage operators are optimizing the utilization of their assets. Because refrigerated warehouses are especially expensive to build and operate, extending services beyond merely handling and storing products makes perfect economic sense. Providing an array of value-added services also serves to help build a partnership between the 3PL and its customers.

Third party warehouses are also providing light processing to reduce the burden on food producers and manufacturers. By shifting the cost of the warehouse investment from the customer to the 3PL, it can be spread across multiple customers. Value-added services provide additional incentive for customers to select the refrigerated warehouse operator and help reduce their overall expenses.

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In selecting a public cold storage warehouse, 3PL customers also benefit from the economies of scale, have a lower point of entry to the temperature-controlled supply chain and have access to already developed delivery networks and do not need to invest heavily in systems, technology and logistics expertise. For some 3PLs, however, the complexity of billing for value-added services for many different customers, inventory types, activities and metrics means that they are missing out on revenue. This typically occurs for 3PL cold storage operators that are not using WMS software with 3PL billing capabilities, using legacy systems or using systems not specifically developed to meet the needs of third party logistics providers.

Just as with other issues in warehouse operations and inventory management, having the necessary tools can make a major impact on profitability.

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Do you have an issue with 3PL billing? Labor Shortage Across the supply chain industry, businesses are reporting that they are suffering from a shortage of qualified candidates to fill essential positions. Whether it is a warehouse worker, truck driver, IT or operations professional, the lack of labor diminishes the capabilities of the business.

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According to industry experts, because many shippers have been outsourcing warehouse and transportation to 3PLs, they may not be aware of the extent of the labor shortage and the challenges this poses to the supply chain. This presents new opportunities for third party logistics operators, however. Many cold storage warehouse operators now report offering more value-added services to compensate for the lack of labor or need to reduce costs. As labor pools tighten, many supply chain operations are looking towards technology for help in filling the gap.

Because of the new focus on technology, workers need increased training.

Whether dealing with providing new services or last mile delivery, cold chain workers need to become more skilled to meet these higher expectations. According to industry experts, much of the funds projected for investment in cold storage and other building projects was put on hold until the election occurred. Now this money is being invested in infrastructure. The amount of quality labor as well as its cost is impacting warehouse operations and refrigerated warehouse construction. This is also affecting whether automated or traditional warehouses are being built.

Because of these challenges, it seems apparent that many more cold storage warehouses will begin to adopt automation and new technologies. Private and public refrigerated warehouses have been replacing existing systems used in routine packaging and palletizing with automated systems. Several factors are combining to increase the adoption of new technologies: Accelerated Inventory Turns According to cold chain industry experts, long-term storage now accounts for a fraction of total warehouse income in many facilities. This utilizes cross docking to ship products in and out on the same day to avoid warehouse storage fees, preserve the quality and value of temperature-sensitive goods and to save time in processing inventory.

Cold storage warehouse operators that rely on industry leading supply chain solutions have a competitive advantage. Having real time, accurate information that can be transmitted digitally is critical to speedy warehouse operations and fast inventory turns. This is because moving goods quickly requires that cold chain companies share detailed information accurately across the supply chain as well as bills of lading and other vital information. Many 3PL and private warehouse operators have adopted enterprise- wide sustainability initiatives, including: Multi-temperature warehouses are investing in ways to reduce energy consumption such as upgrading lighting, replacing traditional fan motors with electronically-commutated versions and installing smart controls.

Changing switch- initiation lighting to devices that rely on motion sensors and automatic dimmers can make a significant impact on expenses. By anticipating demand, supply chain operations can be better positioned geographically to serve the end consumer. Because the products handled and stored in refrigerated warehouses are subject to spoilage, damage and diminished quality and value, getting the goods to consumers quickly is essential. Being able to tailor production and distribution to meet demand can reduce product waste and quality reduction that can lead to food safety issues.

Of these, 3, people die and , are hospitalized from foodborne diseases. Issues regarding food safety have increased in number and at times, in complexity. Factors impacting the increased numbers of product recalls include but are not limited to: To protect consumers, there is an enhanced need for worker safety training as well as for air quality testing, swab tests for listeria and a greater focus on efficiency to safeguard the quality of food products.

Another major issue in food safety involves the cold chain itself.

Perishable goods are subject to biological decay processes. Delivering perishable goods that are safe and of acceptable quality requires that the products are maintained within the appropriate specific temperature range during transportation and storage. Cold chain industry studies show that this remains challenging. Problems with precooling, transportation ground operations, commercial handling practices and other issues have been noted as weaknesses in the cold chain and need to be addressed to prevent product degradation and food safety issues. Growth in Online Grocery Sales Anticipated to Increase Demand for Cold Storage Warehouse Space The acceleration of consumer demand and increase in e-commerce grocery sales is expected to fuel demand for more refrigerated warehouse space.

According to real estate experts at CBRE, the increase in online grocery sales is set to disrupt food product storage and home delivery. As consumers gain more confidence from positive experience shopping online, grocery retailers are exploring new options to increase online grocery sales. Currently, there is 3. The growth of online grocery sales has the potential to increase the demand for approximately 35 million square feet of U.

To reduce costs and time of delivery to consumers, often refrigerated warehouses are situated near densely populated areas. The high cost of cold storage warehouse construction and ongoing operation, escalating land prices and capacity constraint have an impact on new construction and often encourage vertical development and use of automation.

Because heat infiltration is greatest through the floor and roof, taller buildings tend to have better energy efficiency than lower or wider buildings of equivalent volume. Having common order profiles, even for multiple companies can encourage automation integration, highly useful for fast-paced e-commerce fulfillment operations. Some companies are shifting from direct- to-store DSD to warehouse ownership in order to take advantage of economies of scale.

This trend is poised to continue as the largest enterprises merge or acquire smaller cold storage warehouse operations. Centers of Consolidation are Ideal Locations for Cold Storage Warehouses As most of the food and grocery industry is low margin, keeping costs down is paramount. Food producers, manufacturers, retailers and 3PLs are continuing to work together to find ways to reduce costs. One way is to use centers of consolidation for import or export- oriented facilities.

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