The global cold chain logistics market size was valued at $159.988 Billion in 2018 and is projected to reach $585.1056 Billion by 2026, registering a CAGR of 17.9% from 2019 to 2026.
Asia-Pacific accounted for the highest share in 2019 and is anticipated to maintain its lead throughout the forecast period.
Dozens of warehouses comprising cold chain systems are designed, ensuring the ideal storage and transportation conditions for temperature-sensitive products. Multiple export industries are dependent on the vital links that cold chain solutions system provides. Businesses invest millions of dollars in their cold chain operations to create effective, efficient, and reliable process because an end-to-end cold chain security is the weak link in the system.
Single breakdown in the logistics chain can lead to catastrophic losses of products and capital. Moreover, there is an increase in demand for cold storage by the online grocers. Growing online grocery sales in the U.S. market is anticipated to boost the demand for up to 100 million sq. ft. of cold-storage space over the next five years, according to a new report from CBRE. Thus, increase in refrigerated warehouses is anticipated to boost the growth of the cold chain logistics market.
Pharmaceutical manufacturers are majorly focusing on the quality and product sensitivity. Increase in development of more complex biological-based medicines, shipments of hormone treatments, vaccines, and complex proteins that require cold chain refinements need to transported in a controlled temperature which can be achieved by cold chain logistics.
Transportation and delivery of temperature-controlled pharmaceutical products and medical devices is witnessing considerable growth in the overall healthcare logistics industry. The cold chain logistics sector will have to respond quickly to handle increase in the sensitivity, volume, and quality standards of goods and continually mounting regulations.
In 2018, global sales of biotechnology medicines and biological products were estimated at more than 300 billion dollars. These high-value pharmaceutical products are mostly shipped via the cold chain across the entire distribution network worldwide. Thus, growth in pharmaceuticals is anticipated to propel the cold chain logistics market size.
Daily operations in the cold chain logistics industry require large electricity consumption. Thus, cold chain service providers find it difficult to minimize their operational costs due to increase in the consumed energy costs. Moreover, high energy and real estate costs are likely to make the setting and operating process challenging. For instance, refrigeration consumes 53% of the total power in operations. Furthermore, applications such as lighting, heating, ventilation, and cooling consume significant amount of electricity. Therefore, high operational cost is anticipated to hinder the growth of the cold chain logistics market.
The rise in demand for cold chain logistics and storage has been observed from different sources with specific needs. The lack of standards and accreditations poses significant challenges to the cold chain logistics industry, where quality and flexibility of available cold warehousing space is major concern at present. In many cases, companies have to invest further to upgrade the space and its specifications to standards that support the individual industry segment that support their operations. The standards formulated by the policy makers build pressure on developers as expected.
Upgrading the facility in terms of temperature compliance or accommodating automated equipment is not easy. Training and developing the manpower on the technology and handling the products involve heavy capital involvement and it remains the necessity of the industry time-to-time.