Logistics is a series of extremely complicated operations, performed by highly specialized personnel. When we talk about cold chain logistics, the operations become even further complicated because of the sensitive nature of the goods involved. As established in the last few years, cold chain logistics is extremely important to ensure such temperature-sensitive goods reach their respective destinations on time and in optimum conditions. During the emergency of the covid second wave, a lot of such temperature-sensitive goods, including vaccines, life-saving pharmaceutical drugs, etc. needed the support of efficient cold chain logistics.
Ensuring efficiency within cold chain logistics operations is a challenge in itself. There are a number of factors that can affect businesses carrying out cold chain logistics operations negatively. In this blog, I am going to discuss the top risks associated with cold chain logistics operations.
Top Risk Factors in Cold Chain Logistics
Here are the top ten biggest factors that lead to increased risk in cold chain logistics in India:
Lack of Infrastructure for Cold Chain Storage
Lack of infrastructure is the single biggest factor that causes risks inefficient cold chain logistics. There are not enough warehouses equipped with cold storage and refrigeration facilities for temperature-sensitive goods. Neither are there enough warehouses that facilitate seamless cold chain operations.
Moreover, the infrastructure that there is, isn’t up to the mark. Some of the problem areas associated with existing infrastructure are the use of outdated, or worse, no technology at all, mismanagement, low visibility of inventory, etc. The infrastructure should be such that cold chain operations become more efficient. With AWL India’s use of automated systems and digital software, even the existing infrastructure can be upgraded and optimized for maximum returns. And when it comes to cold chain infrastructure, it should even be checked from time to time for maintenance and to detect faults, if any.
Fluctuations in Demand
Sudden and unexpected demand changes for temperature-sensitive goods can lead to problems with logistics for such products. If the demand suddenly increases, as it did during the covid second wave for, say, pharma products, the cold chain logistics provider will have to make arrangements for ensuring a steady supply chain flow.
On the other hand, if the demand suddenly drops, you will have to ensure proper storage for temperature-sensitive products. You will require refrigeration and even proper disposal of damaged goods.
Demand fluctuations can be potentially damaging to your cold chain solutions. With no adequate preparation to meet fluctuating demands, you could lose business. AWL India has a vast network of cold chain warehouses that are available on demand. Even if you are unprepared to meet demand fluctuations for your temperature-sensitive products, AWL India can help you keep your sales by providing you with the infrastructure you need at the right time to meet demand.
Customs and Compliance Issues
Compliance issues can further lead to creating risks for cold chain logistics. The custom and compliance measures differ from country to country and there is no uniformity. This can lead to delays in clearance, and over time, temperature-sensitive goods can get damaged. Dealing with custom clearance could in itself be a long process in some regions.
Things like clearance delays, inspections, etc. could impact the integrity of your cold chain solutions. The more time temperature-sensitive goods spend outside of their optimum environment, the more prone to the damage they become. Things like sudden inspections can lead to hampering of the product packaging. This means that the product will be taken out of its appropriate environment and hence, will be prone to damage.
Environmental Impact on Cold Chain Solutions
The environment can make things unpredictable for cold chain logistics providers. Natural disasters, bad weather, and temperature changes as a result of it can have more of a negative impact on cold chain logistics than you would expect. It could lead to delays, goods damage, etc.
While environmental damage is not a constant phenomenon, it could still lead to huge damage when it strikes. Unannounced disasters are always a threat to cold chain logistics. For example, the Covid crisis itself. It is a natural calamity that leads to sudden changes in the way the supply chain operates. And according to industry experts, the damage that Covid did to the supply chain and cold chain logistics is here to stay for the foreseeable future.
Carelessness from the end of the supplier can lead to you having to incur losses. If the supplier is sending you problematic raw materials, or bad quality products, you would not be able to process it further. The burden of loss will have to be borne by you. This happens a lot in the food industry. Another common problem is with the packaging. If temperature-sensitive goods are not packed appropriately, they can become prone to damage. Temperature-sensitive products need to be packed with appropriate materials that keep them safe from damage during transit. At times, the suppliers can be careless about it, or use bad quality packaging for temperature-sensitive products to save costs. This can save them money but lead to you having to cover the cost of damage.
Retailers who handle and store cold chain products can affect the quality of the product positively or negatively. Temperature-sensitive products need precautionary measures to be taken to keep them in their optimized state. Similar to supplier risks, the retailers must also take measures to keep the goods in good condition. From storage to packaging, nothing should be compromised for temperature-sensitive goods.
There are a number of delivery risks that your temperature-sensitive goods might be prone to. There could be problems with the transportation, like a breakdown of the vehicle. There could be a lack of personnel or equipment to handle the goods appropriately. There could be problems with refrigerated trucks, etc.
Most of these problems can be avoided if you conduct regular inspections of your equipment and vehicles. Also, with cold chain products, you must always rely on the most efficient delivery routes so that you reach the customer on time. No matter how reliable your cold chain solutions are, the sooner the temperature-sensitive products reach the customer, the better.
Yes, temperature-sensitive goods require security. If temperature-sensitive goods are compromised, it would have a direct impact on your customers questioning the integrity of your business. It could hamper your business image. Moreover, essential goods that are damaged could even be detrimental to human life. Therefore, you must ensure safety for such goods.
The most important safety measure you can take for goods that are temperature-sensitive is to always have a backup. If your refrigerator breaks down or temperature-controlled vehicles break down, all the goods you have inside will be damaged…unless you have a backup.
Cost efficiency is a factor that leads many cold chain logistics providers to compromise with the quality of their products. Technical solutions that make cold chain logistics easy can be expensive. Moreover, even these technical solutions are not accessible to all. Logistics companies and retailers need to assess their risks and profit margin before implementing modern solutions.
However, with a one-time investment into advanced measures, businesses can save a lot of resources in the long run. Therefore, it is essential to adapt to changing technologies, and ways of the industry to be smart about saving costs of cold chain logistics.
The personnel handling the shipment should be trained enough to handle temperature-sensitive products efficiently. Carelessness has no place in cold chain logistics. Proper procedures need to be followed to keep the products in their best condition.
As temperature-sensitive products are susceptible to human error, the personnel handling the goods should be well-versed with the nature of the goods they are handling. Temperature variation caused even for a short duration can lead to damage, so the people handling the products must ensure that the products are kept at the appropriate temperature.
The demand for efficient cold chain logistics for temperature-sensitive products is increasing. With the help of modern technology, meeting these demands is also becoming easier and easier. Overcoming the above-mentioned cold chain logistics challenges requires out-of-the-box thinking, technical support, and efficient human resources. As a reliable cold chain solutions provider, AWL India offers solutions that are modern, innovative, and trustable.