Common Challenges in Cold Chain Logistics and How to Overcome Them

Cold chain logistics, which transports products in frozen or temperature-controlled environments, is valued at about $248.4 billion, or roughly 12.4% of the $2 trillion U.S. logistics market. It’s growing at an estimated 13.9%–18.4% CAGR, well above the average 3.9% CAGR of logistics as a whole. That demand is due to increased demand for foods, beverages, pharmaceuticals, and other over-the-counter products that require temperature control or regulation. 

As a result, it’s increasingly necessary to incorporate cold chain logistics into your fulfillment processes, which introduces challenges like temperature control, packaging, and timely delivery. Whatever temperature-sensitive items you decide to sell, the implementation of cold chain logistics requires careful consideration of several critical elements. 

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Temperature and Cooling 

It can be difficult to keep products cool along the entirety of the distribution pipeline. Common solutions to this problem are insulative packaging, cooling agents like ice or dry ice, and refrigerated trucks (reefers). Each option has its pros and cons, as ice and dry ice have a maximum lifespan of about 24 hours, cold packs only last up to 36 hours, and reefer trucks are expensive. 

For most organizations, the best choice is to conduct a risk assessment based on average shipment duration, risk of late delivery, and product volatility. For example, dry ice and insulated containers are ideal for frozen products that need to be thawed upon delivery. Meanwhile, for frozen packages that should arrive frozen or food products that are strictly regulated, reefer trucks are the better call. 

A cold chain logistics partner or 3PL can consolidate shipments with other stores to help you reduce distribution costs while ensuring reliable cold delivery. You also benefit from real-time temperature monitoring to see when products spoil or spike above minimum temperatures. 

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Compliance 

Cold chain logistics inevitably entails regulatory compliance. Those rules are looser for cosmetics and beverages, but for pharmaceuticals and food, you’ll have to meet strict regulations set by authorities like the FDA, ICH, EMA, and IATA. To maintain compliance, you’ll likely need to hire a regulatory consultant to help you determine which requirements apply to your products. From there, you can develop standard operating procedures to ensure consistent adherence across your warehousing, handling, and delivery. That includes staff training, equipment, and documentation so you can prove compliance. Again, a cold chain logistics partner can oversee all of this for you (provided they handle every part of your cold chain logistics). 

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Product Handling 

Product handling is often a key point of failure for cold chain logistics, as it involves loading and unloading, storage, packaging, pick and pack, etc. Taking too long, packing products improperly, and other errors throughout that process can result in spoilage. Often, the only solution is to train staff and implement strict quality measures to ensure processing and handling procedures are carried out correctly. A reliable cold chain partner that has the necessary facilities can take on that work, though, to give you peace of mind. 

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Storage and Distribution 

Distributed warehousing is becoming the norm for e-commerce stores, which use geographically spread locations to keep products closer to the point of delivery. This strategy is essential for temperature-controlled shipments, as it ensures regional distribution is possible within the cooling method’s allotted temperature-control window. 

At the same time, it makes it difficult to ensure products arrive safely, are processed quickly, and then are stored in appropriately cool facilities. That kind of infrastructure is out of reach of many e-commerce brands unless they partner with a 3PL or 4PL that offers temperature-controlled warehousing. 

Further, the necessity of geographic distribution sometimes requires multiple partners to guarantee coverage in every relevant region. Here, selecting a 4PL that’s able to negotiate partnerships for you will reduce costs and eliminate direct contracting, both of which can also save you money since you’ll benefit from economies of scale in contract pricing. 

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Transit Delays

Customs, weather, equipment breakdown, and other logistical issues are inevitable obstacles. However, the potential for disaster due to these issues increases when you rely on refrigerants, like cold packs or dry ice, or insulated packaging; if you have 36 hours of cooling, a 12-hour delay due to a flat tire on your truck could result in complete product loss. 

So, estimate risk and establish contingency plans. For example, if there’s a high chance of failure or a high product cost, robust cooling measures would be imperative. You should also ensure your shipping provider uses GPS and real-time tracking to identify delays so you can recognize and address issues quickly. Of course, expedited shipping should be a mainstay when handing temperature-sensitive goods to carriers.

To avoid customs issues, establish documentation processes. These ensure shipments have been pre-cleared, you have a broker specializing in cold chain products, and everything is double-checked before shipments reach customs. 

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Packaging 

Packaging is another significant challenge for many refrigerated and temperature-sensitive products. Inadequate insulation or cooling, breaks, or leaks all can cause temperature changes that spoil goods. The solution here is a mix of careful handling, quality inspections, and validating packaging robustness via testing. 

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Data Management 

Cold chain logistics relies heavily on good data management. Its success requires you to track shipments in real-time, automatically flag products with temperature deviations, bring delays to the attention of staff, plan delivery routes to avoid regions with insufficient cold chain infrastructure, and more. 

To meet those extensive responsibilities, you need to: 

• Adopt centralized data management with logistics and temperature monitoring pulled into the same platform 
• Run analytics to identify trends, predict issues, and flag problems
• Look for suppliers with infrastructure and warehousing in key regions for your business to simplify risk management and reduce its probability across those areas 

Again, this is often accomplished more thoroughly through a partnership with a 3PL that specializes in cold chain logistics. Also, making these kinds of infrastructure investments can be more costly than they’re worth for small businesses and those with fewer cold chain logistics needs. 

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Conclusion 

From regulations to delays and product spoilage, temperature control introduces significant risk to e-commerce logistics. Tackling those challenges entails implementing centralized data management complete with temperature monitoring, real-time shipment tracking, and contingency plans in case something goes wrong. 

Partnering with reliable cold chain logistics providers ensures you take advantage of robust technology and infrastructure without having to build it from the ground up. You also leverage their expertise in packaging, regulatory compliance, and route optimization to remove those costs and concerns from your shoulders. 

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About the Author

Tom Wicky

Co-Founder / CEO of MyFBAPrep

Tom is an entrepreneur, startup advisor, and management consultant with over 20 years of senior management experience. He is the Co-Founder and CEO of MyFBAPrep, the largest worldwide 3PL eCommerce warehouse network. He managed the digital assets of local media companies across Europe as part of a $2 billion private equity investment led by Macquarie Bank. At the beginning of the Amazon FBA Marketplace, Tom built a data automation platform used to programmatically generate, manage and optimize over 1 million product listings on Amazon. He is a Boston sports fanatic and a recovering hot sauce junkie. Tom speaks Spanish and German and lives in Florida with his wife and three children.