There are many challenges associated with shipping, from fleet maintenance and driver safety to getting the shipment to where it needs to go, on time and with no damage to the goods. While most packages shipped are able to handle extreme temperature fluctuations, some items—such as food and pharmaceuticals—need to be kept at exact optimal temperatures to avoid spoiling, explosions or leakage.
This so-called cold supply chain—consistent temperature-controlled shipping to keep goods safe—enables the globalization of trade by allowing goods to travel thousands of miles while remaining fresh. Each year 70% of the food consumed in the United States passes through the cold supply chain, and close to $130 billion of medical, biological and pharmaceutical sales worldwide are dependent on cold chain logistics. According to the International Trade Administration, the food industry suffered $750 billion in losses from spoiled food caused by improper handling and shipment, something that could have been avoided with an effective cold supply chain.
While the cold supply chain is necessary to efficiently ship the food and medications people are dependent on, it is also one of the most logistically demanding aspects of logistics. This article explores the ins and outs of temperature-controlled shipping and explains why it is critical to get it right.
The Evolution of Cold Shipping
The concept of temperature-controlled shipping has been around for longer than one may think. It was introduced before mass containerization, when only the same kinds of goods were allowed on a cargo ship so they could be stored together at one temperature. This method of shipping was impractical, however, and actually led to more food waste and more goods arriving rotten or bruised.
The solution to this problem was essentially to put a lab-like environment onto a cargo ship to monitor temperature, humidity levels and gas concentration levels. In the 1970s it was discovered that the key to cold shipping is not just temperature control, but also airflow regulation. In the cold supply chain today, those laboratory ships have transitioned into climate-controlled shipping containers that no longer need to be used exclusively for one item.
Regulations on the Rise
The shipping industry is riddled with regulations and rules—from maximum driving hours to the defined weight of cargo carried on road and sea to where certain items can be shipped. Products that need temperature-controlled shipping are also highly regulated, and shipping processes must comply with national and international laws. These regulations complicate the cold shipping supply chain by requiring supply chain managers to have increased visibility into the shipping landscape.
In addition to its Perishable Cargo Regulations, which set the standards for the preparation and shipment of time- and temperature-sensitive perishable goods, the U.S. Food and Drug Administration has stringent rules regarding the import and export of foods. Only foods that are approved—or whose transportation and storage is approved from prior sanction from the FDA—can be imported into the U.S. and all shipments are subject to search or inspection.
The containers created for cold supply chain shipping must be able to maintain the temperature necessary for keeping the food items fresh while also complying with legal regulations. The typical shipping temperature for produce is 55 degrees while meat and poultry require 28 degree temperatures and ice cream and deep frozen products can get all the way down to 150 below zero.
The Food Safety Modernization Act (FSMA), passed in 2011, requires perishable items to be traced along every point of the supply chain, even back to the point of origin. If products need to be recalled, tracking each move helps to isolate specific instances where they may have become contaminated. From the consumer standpoint, the texture and taste of food diminishes if not shipped properly, and for proteins like fish and poultry, improper refrigeration can have serious health impacts.
Other industries are highly monitored as well. In the pharmaceutical industry in particular, there are laws in place to protect against counterfeit drugs, and in Europe medications can only be shipped if refrigerated. Some premium and specialized drugs have very specific temperatures they need to be stored at, with some okay at below 77 degrees to others that require temperatures between 35 to 46 degrees. This means that warehouses and shipping vessels often must maintain multiple temperature ranges. The International Trade Administration found that global spending on the pharmaceutical and healthcare cold supply chain is $7 billion, partially because of the costs associated with all of the individual requirements.
Tools to Help Implement Cold Shipping
Cold shipping is a challenge, but there are tools to help better manage the process. This is where a multimodal transportation management system (TMS) or a third-party logistics provider (3PL) can come into play—each allows for greater visibility and control into global transportation networks, transportation systems and warehouses.
Through a single cloud-based solution, 3PLs help shippers automatically stay informed about new compliance regulations and help implement cold shipping solutions. 3PL solutions provide increased insight into the warehouse and inventory, ensuring supply chain managers are only stocking fresh produce for the shortest amount of time possible or, for the pharmaceutical industry, not stocking high quantities of medication with a short shelf life that may expire before it gets to the patient.
When 3PLs use cloud-based solutions, key stakeholders in all departments can view the supply chain as a whole and make adjustments where needed. Dashboards can provide crucial compliance information, such as automatic updates to changes in trade and customs regulations, alerting supply chain managers before shipments go out.
For shippers who wish to do things in-house, having a robust TMS that allows them to move goods in the most efficient, reliable and cost-effect way is vital. While a TMS can help shippers in a number of ways, perhaps the most beneficial is being a part of a transportation carrier network that provides access to multiple carriers. Having this network of carriers helps shippers manage issues as they arise, such as capacity crunches and extreme weather, and offers more options for temperature-controlled vessels.
For example, if you do not typically ship pharmaceutical products from your warehouse but have some on special order, you probably will not have the means necessary to get the medication to the customer in a safe and compliant way. However, with a strong carrier network you can locate temperature-controlled capacity, collaborate with the carrier and tender your load. This kind of immediate collaboration and connectivity makes the company more agile and able to handle one-off shipments.
The cold supply chain is vital for the safe and timely shipment of perishable and medical goods around the globe, but it is one of the most challenging areas of logistics. Understanding the importance of cold shipping and how to implement it properly it are the first steps to having a flawlessly executed cold supply chain system.
Walt Heil is VP multimodal transportation solutions with Kewill, a provider of supply chain execution software.