The cold chain may be on the verge of a significant transformation. Market pressures that emerged during the COVID-19 pandemic and data-driven opportunities for efficiency are pushing businesses to reinvent their cold chain operations to stay competitive.

These are some of the most important cold chain trends right now — and how they’re likely to transform the industry over the next few years.

1. Growing Demand for Third-Party Logistics in Cold Chain Management

The third-party logistics (3PL) market is growing fast. Apart from a slight downturn in 2019, the market has seen a year-on-year increase in revenue every year between 2010 and 2020. It’s on track for further growth over the next few years. 3PL has become a greater focus for businesses wanting to outsource some or all of their cold chain shipping, logistics, and warehousing operations.

Cold chain logistics require specialized assets — like refrigerated warehouses and trucks capable of the low temperatures needed to prevent product spoilage.

Not every 3PL owns or has direct access to these assets. Many do not specialize in cold chain logistics, and non-asset-based 3PLs may not own any of the products they use in day-to-day business operations.

However, the 3PLs that can provide these niche services may become much more important over the next few years, as demand for cold chain logistics increases, so will the demand for 3PL providers that can offer these services to clients.

2. Growth in Fresh and Frozen Foods Outpaces Other Product Segments

Consumer demand is up in general, and large food retailers have benefitted from rising sales over the past few years. Recent market research indicates that food products requiring cold chain logistics — like fresh produce and frozen food items — are seeing even more growth than other segments.

According to data from Deloitte, frozen foods also saw significant growth in 2020, with sales up 21% compared to the year before.

Fresh and frozen food items may continue to play a much more important role than other product segments. As a result, cold chain logistics that can prevent spoiling while in transit may become much more critical.

Canned and packaged food items may play a less important role for manufacturers. This could encourage them to invest in cold chain logistics systems and 3PL providers that can manage their cold chain logistics.

3. Innovations in Temperature-Controlled Packaging Materials

Dry ice has long been the go-to material for logistics managers that need to keep items cold in transit. It remains crucial — including for the COVID-19 vaccine supply chain — but companies seem to be looking for more economical and effective alternatives to keep goods cold.

One new option from FedEx uses a liquid nitrogen dry vapor product to keep items between -150 to -195 C (-238 to -319 F) while in transit. The product is marketed toward companies shipping pharmaceuticals that must be kept at ultra-cold temperatures.

Other businesses are offering phase-change materials (PCMs), which freeze and melt at around the same temperatures needed by the products they protect. A PCM product is reusable, which can make them more economical than other temperature-controlled packaging materials.

These new offerings are unlikely to completely displace dry ice in the near term. Still, they can provide a valuable alternative for businesses experimenting with more efficient and cost-effective temperature-controlled packaging.

4. New Focus on Transparency and Traceability

Consumers want to know where the goods they purchase come from — particularly when buying food products.

Concerns around product quality, environmental impact, and ethics may be driving this trend. In addition to demanding environmentally friendly or ethically sourced goods, consumers also want proof that brands are as green or socially conscious as they claim to be.

This trend will likely be most relevant to businesses managing cold chain logistics for food and beverage manufacturers. Still, all brands will probably feel the impact of this trend over time.

There’s evidence that consumers want to know where the foods they eat come from and how they were grown, including information on farming practices and labor conditions. People are also interested in the history of goods like pharmaceuticals — especially in developing countries, whereas many as one in 10 medical products may be of substandard quality or fake.

Transparency and traceability are also extremely important for businesses trying to build more resilient and diverse supply chains. Various strategies for doing this exist. Many brands are adopting new supply chain management systems and tools like IoT devices that allow them to track the movement of goods through the supply chain and the conditions they experience while en route.

These data sources can help businesses provide better information on the origin and shipping conditions of fresh foods and similar products.

5. Adoption of Smart Technology for Shipping Condition Management

Businesses are also using IoT devices to more effectively monitor and manage the shipping conditions cold chain items are exposed. Even brief temperature excursions can cause certain products to spoil.

These items allow shippers to gather continuous and real-time temperature information for all the goods they ship. If a device’s shipping environment begins to drift into unsafe temperature ranges, the system can automatically alert drivers, managers, and other workers. These employees can take immediate action to prevent spoilage.

For especially high-value items, like pharmaceuticals and vaccines, this technology can be a valuable form of insurance. Whenever temperature excursions occur, the monitor can help ensure workers who can fix the issue are aware of the threat.

If spoilage isn’t preventable, data from these IoT devices can also make it easier to determine fault or identify which items spoiled while in transit.

How the Cold Chain Is Likely to Evolve This Decade

Cold chain professionals face significant challenges and opportunities. A combination of changing market conditions and Industry 4.0 innovations means the cold chain is primed for a transformation over the next few years.

With changing consumer demands, the growing 3PL provider market and smart supply chain technology will help the cold chain reinvent itself through the end of the pandemic and beyond.

Emily Newton is Editor-in-Chief of Revolutionized, she regularly covers how technology is changing the industry.