Covid 19 has changed the way businesses run. However, the cold chain industries across Australia and globally in general, has seen much positive impact. Warehousing cold chain setups are much in demand due to the pandemic. With packaged products and beverages needing storage, the cold chain as an industry is much in demand. However, despite the demand, there are certain fluctuations that have turned out to be challenging for this industrial segment.
The Transition from 2020 to Now
- The restrictions in trade and supply chains caused a backlog for cold chain industrial units last year. Around 2020, to the beginning of 2021, there had been large-scale shortages grappling the cold foods market. However, with acceptance that Covid will play around for a longer time, the industry has risen to the challenge of making up for the same.
- The greater challenge in the present is more of keeping up with the backlogs and ensuring seamless supply. A gradual shift towards organized retail hubs is evident post Covid’s arrival.
Why the Heightened Demand for Cold Storage Facilities?
- Consumers have moved to piling processed products that promise long storage life instead of perishable foods. This is because of lockdown and trading restrictions. Australian cold storage giants have surpassed their available capacities, a few months ago. Therefore, another challenge for the industry is that it has to engage in expansion activities to remain relevant in times to come. The challenge is more of a growth but the main issue is scaling up is not as easy as it reads!
- Therefore, if you are looking to set up a business and have the resources to invest in cold chains, the model is apt to opt for. Another factor that cold chain businesses need to consider is that merging urban markets are more health conscious than ever. There is potential that cold storages need to modify their operation styles to appeal to the changing preferences.
Balancing the Negative Effects
- With climate change being a hot issue in the current times, the fact that cold chains contribute negatively to the environment is not worth ignoring. Business owners in this sector are aware of the burden such a line of operation causes on the climate globally.
- Maintaining energy efficiency with usage of the right internal equipment and infrastructure such as plastic strip doors and right exhaust units is a way to reduce this footprint. Australian cold chain business operators cannot overlook the huge consumption of hydrofluorocarbons – that touch almost 7 per cent of global consumption.
- Reducing diesel backed refrigerated transportation is a new challenge for cold chain operations. Diesel powered transport uses 21 percent higher power when compared to non-refrigerated counterparts. There is an unmeasured effect that cold storage chains have on the environment. These include—but are not restricted to-
- Toxic effects from chemical agent usage
- Toxic emissions from refrigeration units
- Generated waste from various stages of supply chain
In countries such as Australia and neighbours in the Asia Pacific region, ensuring efficiency in transport related infrastructure is a challenge. There is a large gap across the connecting segments in the transportation niche. These missing connectives become a clog in the choice of routes.
Additionally, lack of ample capacity and outdated infrastructure in want of maintenance—further cause issues in cold chain operations. Interestingly, the Asia Pacific region is poised to become the most rapidly growing market in this sector. It has a CAGR of more than 13 percent for the latest forecast period 2020-25.