The Indian logistics sector is set to grow at a CAGR of 10-12% to reach USD 380 billion by 2025 from USD 250 billion in 2021. And one of the key components of the sector that is also set to be growing at a fast pace, is the cold supply chain in India. The nation saw a rapid growth in the demand for temperature-controlled and temperature-sensitive supply chains, especially after the COVID Vaccine drive that also brought the country’s cold supply chain in the spotlight. It is not a surprise then, that the cold chain sector is expected to grow at over 20% CAGR by 2025, as per a recent report by JLL.
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However, while there is rising demand and a lot of policy support to develop a robust infrastructure for cold storage and cold transportation, there is also a rising awareness about the high energy consumption and high carbon emissions related to the current Cold Supply Chain infrastructure. From 24×7 temperature-controlled storage to specialized packaging and transportation needs, including reefer vehicles, the amount of electricity, water and packaging consumed in Cold Chains is massive. With rising focus on global businesses and India’s aim to cut down on its emission intensity by 45% by 2030 and achieve the goal of net zero by 2070, it has become crucial to develop a green and sustainable cold chain network. (https://www.orfonline.org/expert-speak/a-climate-resilient-health-system-of-tomorrow-can-only-be-possible-if/)
Here are some of the key areas where a switch to greener processes can help drive sustainable cold chain practices:
1. Tech adoption and Digitization
While a lot has been spoken about the benefits of digitization in cold supply chain networks, one of the key aspects is the optimization of resources and access to AI driven smarter processes. The tech-enabled automation system, which utilizes the best of AI, Robotics and IoT-enabled devices, can help monitor the temperature along with driving energy optimization.
Tech adoption provides transparency that helps transporters check emissions, drive fuel optimization, and cut costs, thereby helping reduce carbon emission. Effective planning and consolidating involves route optimization, real-time tracking and tracing, and ensuring the partially loaded trucks or containers are not hurried off but instead are used smartly to combine deliveries.
2. Switch to Solar
Switching completely or partially to a solar power based energy sources for cold storage can help curb the carbon footprints drastically. Additionally, it is easier to adapt to as well, as the warehouse can simply install solar panels on the roof and open areas around the warehouse to meet partial or complete energy requirement of a cold storage facility.
3. EV/ CNG transportation
For refrigerated movements, one of the key focus areas is smarter transportation. The transport sector alone contributes to about a quarter of global CO2 emissions, and India registered a CAGR growth of 4.5% in the CO2 emission from fossil fuels, as compared to 1.16% growth in developed countries. Shift to EV vehicles along with consolidating and effectively planning the movement of goods, can help reduce fossil fuel dependency and significantly reduce wastage and carbon emission. Use of smaller vehicles with smart packaging for last mile temperature-controlled devilries can also be a game changer in energy management for temperature-controlled transportation.
4. Lastly, Recycle, Reuse and Refurbish
As is true for any industry or business, adopting processes that focus on recycling, reusing and refurbishing resources and tools, can help reduce waste and optimize resource consumption, thereby limiting carbon footprint. For Example, water discarded from cooling units in a cold storage facility can be recycled for the garden or for cleaning and other purposes while re-usable packing and staking material can help cut costs and reduce waste. Such thoughtful use of resources can help in the long term to also optimize operations and maximize the value of the assets.
Combating climate change has become one of the major responsibilities of corporates and decarbonizing the supply chain network has an immense potential to be a game-changer. Environment-friendly and carbon-neutral logistics are inevitable future and major joint efforts are being made to achieve that. Tech adoption across cold chain networks for the sector has emerged as an effective tool to build an organized, green, robust, and agile cold chain that is ready to support the business ecosystem of a nation.
