Opportunities non perishable for perishables
The cold chain industry has been growing significantly owing to the increasing government initiatives, rising need for the cold chain facilities, increasing private sector investments of both domestic and foreign players. CARGOTALK explores this industry
With the shift in focus from increasing the production to better storage and transportation facility of the produce, cold chain industry is developing at a faster pace in India. The cold storage infrastructure has the ability to maintain the shelf life of perishable goods by maintaining proper temperature of the products from the farm gate to the end-consumer. As per the report, ‘Indian Cold Chain Industry Outlook 2022’, owing to the rising need of the infrastructure to reduce wastage, the cold chain industry in India is forecasted to grow at a CAGR of 19 per cent during the period of 2017-2022. CARGOTALK explores the potential of the market, challenges with the reefer transportation, impact of GST, technological innovations, and what is needed to be done to reduce the operation cost.
Focusing on the minutiae of the sector, Ramesh Mamidala, India Cargo Awards winner 2016 and CEO, Celebi Delhi Cargo Terminal Management India, says, “Cold chain sector in India by far has been neglected, thus leading to around 40 per cent of agrarian product waste due to the lack of cold chain infrastructure. While the production of high nutrition products like fruits, vegetables, meat and others have gone up considerably over the years; what is lacking are the means to safely handle and move these perishables to the market. The present government is determined to reduce agrarian wastage and bring down the postharvest losses; this leads to more investment in cold chain sectors. We are investing heavily to bring in new technology in our cold chain facility and hence providing an ideal storage condition for all perishables, from acceptance stage to the release of this sensitive cargo from our warehouse.” Sunil Kohli, Managing Director, Rahat Cargo, “The government has announced number of incentives to promote the cold chain sectors which may provide a major boost to this sector rendering a huge opportunity of investments. Under the scheme of 135 integrated cold chain projects with the cold chain capacity of 475,000 MT of cold storage / controlled atmosphere / modified atmosphere storage, deep freezer,114.75 MT / hour of Individual Quick Freezer(IQF), 12,005,000 litres per day of milk storage / processing and 787 number of reefer vehicles besides additional tax exemption facilities have also been sanctioned.
Sharing the potential of the market, Ram Tiwari, Director-Marketing, Shine Logistics, says, “Despite huge potential in cold chain logistics sector in India, we are still much behind as compared to other developed and developing countries in the world. As logistics trade is yet to get recognised with the industrial status, government has never extended any facilities in terms of financial support, logistics parks, or any commercial benefits. Therefore, people have not invested money to the development of infrastructure which led to big economical lose to the country. India is an agrarian economy but due to lack of cold chain logistics support, mostly inadequate infrastructure for vegetables, fruits, milk products, medicine and other eatable items are getting wasted.”
Barriers to the growth
Sharing how lack of logistical support acts as one of the key challenges for reefer transportation, Mamidala tells, “It is imperative to have a seamless, undisrupted and smooth functioning supply chain for effective logistical operations and cold chain is no exception.” Adding to the challenges for reefer transportation, he says, “Lack of multiple farm gate collection centres in India results to customer paying more for a reefer transportation and due cost optimisation to run a full truck is inadequate. To add to this, standard refrigerated systems are inefficient and poorly designed. Also, not many reefer trucks are available due to the lack of volumes in the market. Establishment of new and modern cold chain facility will necessarily push up demands for reefer trucks transportation.”
“All the stakeholders must collaborate to find solution to lack of the adequate logistics support for reefer transportation. Government initiatives and a fillip must be given to establishment of cold chain projects in India; subsidies should be given to encourage refrigerated transport systems. Further, establishment of new and modern cold storage facility will necessarily push up demand for refrigerated vehicles,” opines Kohli.
“There is good demand in India but we are not able to provide the solutions because we do not have infrastructure and support in place, we are lacking with required solutions. We may need some more time to come-up with required facilities and solutions and Shine is working on the solutions along with our overseas partners to set-up cold chain supply chain by applying technology and packing solutions,” informs Tiwari.
“Another challenge is reducing the operation cost in cold chain logistics or in general logistics business. And, several ideas are under experimentation, such as, right packing solution which can hold constant temperature for long time without having any outer energy support, and using vehicle having battery operations, to name a few,” he adds.
Smart refrigeration systems powered by Internet of Things, big data analytics & cloud solutions are the future requirements
GST may help to improve the cold chain logistics in India in near future because it will remove many local taxes
All the stakeholders must collaborate to find solution to lack of the adequate logistics support for reefer transportation
Echoing similar views Mamidala says, “Cost was one of the main reason for switching from fossil based energy sources to renewable energy sources like solar and wind besides others. Today, reduced costs for renewable energy technologies are making every transition not only possible but actually less expensive than the alternative. Even our