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RouteiqueMay 13, 2022 2:00:00 AM5 min read

The Challenges of and Strategies for Tackling Cold Chain Demand

The Challenges of and Strategies for Tackling Cold Chain Demand

The available space for cold storage is shrinking, and companies are looking for ways to catch up to this increasing demand. Today’s cold storage professionals face an onslaught of challenges, but new technologies and strategies are allowing for more adaptable and efficient cold storage practices. Read below to see the challenges facing cold storage professionals, and some of the ways they are trying to meet this increasing demand. 

The demand for cold storage is increasing with the market revenue of cold storage/cold chain expected to grow to $222.27 billion by 2026, according to a recent market report from The Business Research Company. We’re already starting to see this influx in the supply chain today due to a number of factors from stockpiling because of pandemic-related concerns, to the ever-increasing trend of e-commerce shopping habits. 



There are a multitude of challenges to handling this increase of demand, some of which are more direct than others. Some of these challenges include: 


Labour Shortages

Labour shortages are a continuing problem for the supply chain as a whole. Many warehouses find themselves struggling to find and retain various positions within their operations. When it comes to cold storage specifically, finding people to work within the uncomfortable conditions of freezers and coolers creates its own challenges, with many companies offering higher wages to those who regularly work within these facilities. 


Costs of Running

The costs associated with adopting, maintaining, and upgrading cold storage facilities are quite daunting at times. As mentioned above, staff who work within these conditions oftentimes require higher compensation for spending hours on end within these units. In addition, the costs of developing and maintaining a cold storage unit are far more than the costs of an average warehouse space, especially when taking into account the rising energy costs seen all over the world. 


Lack of Space

As mentioned earlier, an increase in warehouse space demand is being seen all over the world due to a number of factors including consumers shopping more and more through e-commerce sites, meaning companies receiving these orders need a place to store and fulfil them. With the pandemic still affecting the global supply chain, companies are attempting to prepare for the possibility of severe disruptions. They are therefore stockpiling, filling up space for a potential eventuality, but minimizing room for more stock. 


Lost or Damaged Products

Cold storage is designed for perishable items. Gaps or errors in the cold chain result in lost or damaged items. Improper monitoring, gaps in communication, and inefficient layouts or processes can lead to these unfortunate outcomes. 


Lack of Visibility and Warehouse Management Tools

As mentioned above, inefficient processes and technologies that leave gaps in the supply chain lead to a lack of visibility. Visibility is the key to having a streamlined and continuous flow-through from end to end, and having any moments of miscommunication or misunderstandings between suppliers, retailers, or distributors cause problems that reverberate through the entire chain. 



While most of these problems have to do with global phenomena that will take a combined effort of global forces to solve, there are things supply chain professionals can do within their own operations to start dealing with the cold storage issues outlined above. 



Automation is an incredible way to handle a multitude of supply chain problems, especially the ones listed above. Robotics and automation are being implemented throughout the supply chain, creating better visibility, and handling the jobs humans don’t want to do, therefore tackling the labour shortage as well. AI and robotics also help to greatly improve efficiency, and reduce errors, helping to prevent lost or damaged goods, all while being able to work in the harsh conditions of a refrigerated storage unit. 


Energy Efficiency

With the rising costs of energy, utilising energy-efficient technologies to help reduce the costs of running your facility will allow you to move that budget to other areas of importance. Many cold storage facilities have opted to use solar panels on the roofs of their warehouses, turning the power of the hot sun into the energy powering their cool refrigerated units. Sensors, lighting, and insulation are more areas to look into for potential cost-saving actions. 


Constructing More Space

While the expenses of setting up a new cold storage facility are high, one of the most straightforward solutions to the lack of storage space is to simply create more space. A recent study done by Global Industry Analysts Inc. states that the global cold storage market is expected to grow to $22.9 billion by 2026. However, this is not the only, or best, solution to rely on. Finding the space to build these cold storage facilities comes with its own host of challenges including zoning laws, location relative to customer base, and, as mentioned, building costs. 


Increasing Visibility With a Warehouse Management System

Having dedicated warehouse management systems can easily monitor all aspects of your cold chain, improving visibility and allowing an overall, seamless connection, all within one place. Combining hardware and software with a dedicated system allows you to monitor temperatures, stock volumes and conditions, as well as cold distribution metrics in order to have the most comprehensive view of your entire system. 



When it comes down to it, when working within your own operation, meeting the increasing demands of cold storage involves creating more space through improving optimization and redistributing the costs and physical space you regain back into mitigating increased volumes. Optimizing your space with AI and other hardware and software allows you to see inefficiencies you may not have noticed before. Finding a balance within your stock is key, ensuring you have the right levels to be prepared for potential disruptions, without over stocking and therefore preventing the intake of important goods. 

Routeique creates this comprehensive view of your entire cold chain, giving you x-ray vision into the inner workings of your operation to gain insight, foresight, and oversight. Our software, combined with our suite of sensors, gives you real-time data including the temperature and humidity of both refrigerated vehicles and warehouse units. If you would like to learn more about how Routeique can help your cold chain keep its cool,  read through more of our content on our blog page.