The Rise of Cold Chain Packaging – a US$400 Billion Industry in the Making

Temperature controls everything.

And that’s why the cold chain logistics is projected to be worth US$400 billion by 2021 and that is just for Asia alone.

With complex custom processes and an ever-increasing shipping volume, delays in supply chain are inevitable. Such delays can be costly depending on the type of goods being shipped. Certain products such as biopharma, food is sensitive to temperature and any unforeseen delays can result in an entire container of goods going to waste.

This is where cold chain packaging technology comes in. By regulating the temperature bands used in logistics, the shelf life of products can be preserved. Cold chain logistics is a growing market in Asia worth more than US$400 billion, especially for Singapore which is a major pharmaceutical & healthcare hub. With products that require temperature sensitive environments, cold chain technology has an increasingly significant role in logistics.

"Blue Ocean" Opportunity for 3PLs

Most of the major 3PLs have their presence in Singapore. Instead of swarming around in the red ocean, 3PLs can consider investing in cold chain technology and strive to be the leader to provide cutting edge customised solutions to the growing pharmaceutical industry.

Cold Chain Benefits for Consumers

On the other side of the table, consumers also benefit from cold chain technology and its continued development. Products which used to be inaccessible can now be made readily available with the use of cold chain packaging. With specialisation leading to lower costs of manufacturing, it is not always economically feasible to produce locally. Cold chain logistics plugs the gap.

As consumers, we benefit from cold chain logistics in our everyday life. Just last week, I brought my baby for her scheduled vaccination. Usually I don't dive into such details, but a quick research reveals that vaccines are manufactured and then shipped in the range of 2°C and 8°C. The desired average vaccine storage temperature is 5°C. Now, you didn't know that unless you are in this industry and if you are not, now you have one additional knowledge to bring to any relevant discussion.

The Future of Cold Chain Logistics

Cold chain logistics has a significant impact on environment. It minimises wastage and enables the distribution of goods to areas previously unreachable. While much of it goes behind the scenes but the technology and its far-reaching benefits are not too difficult to relate to.

What would be the challenge is to foresee and anticipate the next disruptive wave in logistics? Cold chain is great because it is giving companies the technology to ship their products within the right temperature bands to their destinations. Yet, there is still a limit.

A lethal combination might be the marriage of Cold Chain and Blockchain so as to eliminate the complexities and delays caused by intermediaries. With Blockchain coming into play, transactions are verified autonomously and what we are likely to experience in the days ahead is the elimination or at least a significant reduction of shipping delays.

The future of cold chain logistics is definitely a big one, and with technological breakthroughs, we should be seeing its impact on the environment leading minimal wastage of resources and a greener world.

Published by: JK Chan

Practice Lead / Partner, TAP