With COP26 at the forefront of all discussions regarding sustainability, companies and indeed, nations everywhere are looking to optimize and strategize wherever they can to build towards a more sustainable future. When it comes to the supply chain, transportation is a key area of discussion, as it significantly contributes to carbon emissions.
The cold chain refers to the transportation and refrigeration of different kinds of products. This ranges from producing items under appropriate temperatures all the way to keeping things fresh in supermarket display shelves. Traditionally, most conversations about cold chain regard moving heavy loads from Point A to Point B.
There are numerous challenges in this arena, especially when trying to reduce carbon emissions effectively. There has long been a need to innovate and regulate the cold chain to make it more sustainable, but it’s not as simple as electrifying all refrigerated vehicles. For example, a small portion of a shipment may need to be refrigerated, but not the whole thing. Therefore, the challenge arises when trying to ensure that small part of the whole is kept at the appropriate temperature without wasting the energy to refrigerate the whole truck.
As it currently stands, transport refrigeration is unregulated and therefore, breaches do occur. This means that some food has to be thrown out by the time it reaches its destination because it hasn’t always been sort at the optimal temperature. This loss is estimated at about 13%. As the largest manufacturing sector in the United Kingdom, keeping food and beverage at the optimal temperature is of utmost importance for public health and safety. Over 70% of all food is expected to run through the cold chain, which results in approximately 2-4% of all the UK’s GHG emissions through transportation. But the cold chain industry is beginning to consolidate and digitalisation in the industry is now key as technological advancements begin to transform the industry. This makes the industry appealing for investors in terms of ROI and operating margins.
Companies are now coming up with solutions to manage energy use in moving refrigeration systems and are doing so while remaining profitable. This is key since supply chain issues don’t show signs of letting up within the next six to nine months. One such company driving this change is Unilever. The company is currently running a nine-month pilot in the Netherlands to test breakthrough innovations in temperature-controlled transport. Their trucks in question replace diesel refrigeration with zero-emission battery-electric prototypes. These prototypes keep freight chilled to –25 degrees Celsius and are tested to run entirely on renewable electricity. If successful, the running of these trucks would result in the equivalent of taking 70 passenger cars off the road for a year.
According to Unilever’s Head of Logistics and Fulfillment, “logistics and distribution account for about 15% of emissions” from vehicles. Unilever’s goal is to half emissions of their products by 2030 and achieve net zero across their value chain by 2039.
Cold chain logistics companies need to evolve by embracing sustainability and innovation or thy will simply fall behind. Other innovations in this field are on the horizon too, from AI to blockchain, helping to connect all aspects of the supply chain and optimise logistics wherever possible. Not only will this continue to aid in our journey towards sustainability and the circular economy, but the better the cold chain operates, the better food security for the public.
The current labour squeeze affecting the whole world is still alive and well, so finding and retaining appropriate talent for cold chain logistics operations is an incredibly complex challenge. Companies need to be re-evaluating their benefits packages and look to expand their candidate pools, especially at the senior leadership and executive level.
Feel free to connect with me on LinkedIn to discuss anything regarding the supply chain, or get in touch with a consultant at Proco Global to see how we can help you optimise your processes through hiring and retaining the best talent.
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