From the rise of online groceries to food subscription boxes and increasing vegetable imports from Mexico, cold chain logistics is on the rise. That trend affects thousands of eCommerce sellers, who are seeing an increasing demand for the convenience of ordering food online. However, it introduces new challenges to logistics as well in the form of cold chain shipping.

Tackling the intricacies of cold chain logistics can be daunting — so much so that some 3PLs avoid it entirely. However, in industries such as food, beverages, and biopharmaceuticals, mastery of cold storage prep and shipping is a necessity. We’ll walk you through the basics of these complexities and how to navigate them to ensure your temperature-sensitive goods are handled professionally and efficiently.

What is cold chain shipping?

Cold chain logistics is the storage and distribution of goods at a controlled temperature. It typically entails food and other perishable goods but can also mean transporting any other such goods like makeup, perfume, flowers, medicine, candles, and even artwork. If your goods are temperature sensitive, you’ll need cold chain logistics to move them through areas that could otherwise damage the products.

Temperature-sensitive goods must remain within a certain temperature range to ensure quality, freshness, and safety, and logistics are a key breaking point. Often, cold chain products also require shifts in delivery frequency as well. For example, it’s common to adopt a strategy of small shipments with short delivery times to enable storage capacity and the ability to keep products cold during transit. This is why a reliable cold chain shipping strategy is essential.

How cold chain shipping is redefining supply chain management

The cold chain process generally incorporates additional considerations compared to traditional shipping, like:

• Variations in demand:
  Unless you sell groceries, demand typically fluctuates up and down for perishable goods. Even groceries can be seasonal and experience stark demand fluctuations.
• Cooling capacity:
  Cold chain shippers often have to consider the storage capacity of the receiving destination (e.g., products delivered can’t exceed the cooling capacity of the receiver). That often means breaking shipments into smaller loads, spacing them out over a wider delivery period, and matching them to throughput so supply only just keeps up with demand.
• Distributed delivery:
  Cold chain fulfillment requires taking into consideration the condition of the product upon delivery. For example, if frozen products must be thawed by the time they reach the customer, this can introduce significant complexities to your fulfillment.
• Load integrity:
  Load integrity requires technology to determine and maintain shipment temperatures.
• Transport integrity:
  Transport integrity requires staff and technology to ensure transportation temperatures.

Shippers and third-party logistics (3PL) providers continuously adapt to consumers, and that includes cold chain shipping: NTT Data’s 2023 27th Annual Third-Party Logistics Study found 67% of shippers and 72% of 3PLs are expanding their cold chain capabilities and capacity over the next three years. It’s further anticipated that, by 2030, the global chain logistics market will reach about $801.26 billion and grow at a CAGR of 14.07% from 2022 to 2030.

Two increasingly influential industries, grocery delivery and micro-fulfillment, are contributing to this expansion as they broaden their logistical capabilities to include cold chain shipping.

Grocery delivery

eCommerce and online grocery services are gaining a larger share of the cold chain industry. Over the next five years, online grocery sales will see a CAGR of 11.7%, bumping eCommerce’s share of overall grocery spending from 11.2% in 2022 to 13.6% in 2027.

This trend will continue as customers are now used to the convenience and time savings of grocery delivery. Moreover, by 2026, eCommerce is predicted to take up 20% of the U.S. grocery industry.

While this growth is exciting, grocery retailers feel pressured to deliver products to customers quickly while meeting increasing demands. To support service deliveries and operations, brick-and-mortar stores now look to cold chain shipping for guaranteed food freshness. eCommerce brands also have to consider aspects of fulfillment like:

• Distributing cold storage over the sales area to reduce time to deliver.
• Implementing cold chain fleets to enable direct-to-consumer delivery, which reduces the number of times perishable goods change hands and therefore the risk of something going wrong.
• Matching different shipping requirements across different types of products and figuring out how to meet those needs in a single shipment. Consumers often order groceries in batches, so someone might order meat and dairy products with frozen goods, fresh produce, and non-perishable items. All of those have to be shipped and delivered at the same time, which adds significant complexities to pick and pack, transportation, and delivery.

Micro-fulfillment

Micro-fulfillment involves establishing smaller-scale warehouses in populous urban or suburban locations. By shortening the physical distance between consumers and goods, businesses reduce their last-mile delivery time. This is especially important to the cold chain, as it improves supply chain efficiency and lowers the costs and risks associated with temperature-sensitive shipments.

Micro-fulfillment centers typically carry enough stock to cover a few days’ worth of orders. They rely heavily on inventory management software and customer-driven analytics to determine what SKUs are most often purchased, by which customers, and in what geographic areas. This ensures product availability and eliminates wasted storage and stagnant inventory.

It also allows those storage points to maintain stock without overloading cooling resources such as refrigerators and freezers. However, it does require business to align deliveries carefully with throughput and expected sales to avoid stockouts and lost income.

The technology driving change in cold chain logistics

Thanks to modern advancements, companies can track shipments live, which includes the ability to view real-time temperature and adjust it dynamically based on outside conditions. Even AI and machine learning now offer analytical tools that use data to help keep products at an optimal temperature throughout their journey. That also yields actionable insights like predicted inventory, transportation time, consumer demand, and spoilage probability.

Software products can also monitor the trailers used during transportation between distribution centers to ensure temperatures remain consistent. Previously, cold chain shipping employed passive temperature sensors — battery-powered thermometers that would monitor the food containers rather than the trailers. However, new technologies allow products to ship in ideal temperature conditions as well as provide live data on temperature fluctuations.

Adopting Bluetooth low-energy (BLE) trackers, for example, enables users to monitor the temperature and climate of transportation containers remotely with real-time insights like humidity, movement, data entry, and analytics. This reveals any issues concerning suboptimal conditions that businesses can improve with GPS, RFID, and barcodes.

If goods arrive spoiled, it can be difficult to pinpoint where the breakdown occurred without sophisticated software. Advanced tracking systems continuously track temperature and humidity to alert users if pre-configured limits are breached, thus proactively preventing damage. Often, location-based insights like GPS will inform you where the goods are when they’re damaged. This helps you trace the timeline back to ensure accountability and avoid repeating these mistakes.

The basics of temperature-controlled logistics

A recent Forbes study found 61% of shippers outsource cold storage and warehousing to some degree. This is primarily due to the significant costs of investing in and maintaining temperature-controlled logistics, which includes special equipment and established processes for temperature-sensitive items.

Temperature monitoring

Shelf life and temperature ranges can vary drastically from product to product. They usually fall into two main segments: chilled and frozen goods. However, items can fall anywhere within that range, making it impossible to keep everything at a single, uniform temperature. You must establish a process for keeping track of acceptable temperature ranges to reduce waste and regulate temperatures 24/7. That’s true even if you ship items with different temperature requirements (e.g., meat and produce alongside frozen goods).

Regulatory compliance

Complying with local, state, and federal safety regulations is crucial for preserving the safety and quality of perishable goods. One such statute is the Food Safety Modernization Act (FSMA), which requires shippers to complete temperature reports and maintain documented sanitary practices.

New regulations are proposed all the time, so be sure to check them regularly to stay up to date and in compliance. Working with a 3PL brings experts who manage compliance for you, which can save considerable headache, especially when it comes time to report or cooperate with an audit.

Equipment and insulation

The type of storage you use has a massive impact on the quality of cold goods. You can choose from various refrigeration equipment like refrigerated containers, blast freezers, cold rooms, or pharmaceutical-grade cold storage. The goal is to keep temperatures consistent and prevent exposure to outside elements, so do your research to select the right type of unit for your cold goods.

MyFBAPrep utilizes various state-of-the-art temperature control equipment to ensure products are stored at consistent temperatures and free from exposure to external elements.

The art of cold packaging

Packaging cold storage items requires great care, as mishandling can lead to diminished product quality or spoilage. The greatest challenge at this stage is ensuring temperatures stay within an acceptable range and preventing external factors like humidity from ruining the item. Give careful attention to the following elements:

• Packaging: Opt for lightweight, heat-resistant packaging, such as Styrofoam boxes, foam planks, insulated liners, or insulated pads. Also, consider water-tight plastic bags that help keep products dry, packing materials that hold items in place, and outer corrugated boxes that offer extra protection. The general rule of thumb is to prepare for a transit time of around 30 hours.
• Coolant: Gel packs and dry ice are the most common refrigerants used in cold shipping. However, dry ice can be difficult and costly to work with because it’s considered a hazardous material. It also can’t be used in airtight packages and must meet various requirements. Wet ice isn’t a recommended alternative because it’s heavy and melts.
• Arrangement: How you layer and seal your packages could be the difference between safely transported products and spoiled goods. Ensure your coolants are evenly distributed when putting together your packages so no portion of the shipment is at risk of falling below safe temperatures.

Aside from securing your products, you must also account for possible leakage and perspiration. Double-bagging, absorbent pads, or cellulose wadding can help combat those potentialities.

• Special requirements: You’ll need to affix appropriate labels to your packages, such as dry ice labels, expiration dates, dietary claims, and “Keep refrigerated” stickers.

If you sell on third-party marketplaces like Amazon, you may also be required to provide information like the shipper’s name and the location where the contents were grown or manufactured.

The advantages of cold chain shipping

The rise in global trade and demand for perishable goods has increased the importance of reliable cold chain shipping in recent years. This logistical niche is essential to ensure perishable products are delivered safely and on time.

Shipping temperature-sensitive goods with cold chain shipping is essential for improved safety, extended shelf life, reduced waste, and cost savings on products. Most importantly, it reduces the risk of spoilage due to temperature fluctuations, which can cause serious health issues or even product recalls.

By controlling the temperature and humidity of the product environment, cold chain shipping allows items to be transported over longer distances without compromising quality. This helps businesses maintain inventory levels more effectively, as well as ensures products reach their destination on time and in perfect condition.

The challenges of cold chain shipping

Shipping cold and frozen goods poses substantial challenges. Even with perfect packaging and storage, improper shipping methods can lead to unhappy customers and lost revenue. So, before you ship your products, you must develop a dependable strategy, ensure your technology is up to scratch, and establish a process to monitor those procedures. Key components to hone are:

• Storage units: To ensure items remain in good condition and hold steady at a safe temperature, cold chain shipping requires products to use storage units. That can be anything from a refrigerator or reefer truck to an insulated box to transport goods at their original temperature.
• Regulatory compliance: You’ll often have to comply with stringent regulations, which includes reporting on and showing compliance at a moment’s notice. So, you have to be aware of the laws that impact the goods you ship and potentially adapt to regulations as you move through different geographics and climate regions.
• Temperature fluctuations: Even as you move through extreme climates, the desired temperature of your goods should remain stable. This often requires businesses to invest in reefer or refrigerator storage during transportation rather than simple cool boxes and packs. For example, a product shipped through Washington State will have very different cooling and transportation requirements than if it was sent to Arizona.
• Offloading: Loading, unloading, and other changes of hands can be detrimental to perishable items. So, logistics must incorporate tight management of load and unload times, wait times for trucks, and time-in-transit to ensure goods remain in optimal condition.
• Packaging: Cold storage brings significant packaging complications, so packaging must be carefully considered and chosen based on each product. Also, keep in mind that packaging may not be universal across a single delivery (e.g., wet and dry cold goods have vastly different shipping and handling requirements).
• Managing costs: Cost can be another major challenge for companies, as cold chain logistics is more costly than ambient. Expenses include specific packaging and some kind of coolant, and you usually have to pay for expedited shipping to ensure the product arrives quickly and doesn’t spoil en route to its destination. All these elements increase your overall cost, so it’s crucial to find ways to lower them.

An increasingly popular way to tackle these cogs in the cold chain machine is to outsource the process to a 3PL. In fact, 72% of cold storage in the U.S. is now outsourced. Often, it makes more sense for organizations to invest in a third-party service that can provide existing infrastructure, rather than building and maintaining that infrastructure themselves.

Cold chain shipping best practices

Cold chain shipping is prone to issues and headaches. You can avoid these problems though and ensure well-oiled operations by adhering to best practices.

• Packaging: Include an inner layer and vapor barrier or plastic film to maintain a consistent temperature for products during transportation and maximize their shelf life. These prevent any outside air, humidity, or environmental factors from sneaking into your containers, as well as protect against leaking.
• Coolants: Use the right coolants and in the correct amounts. Once you have your insulated packaging, add gel packs, dry ice, or another coolant to keep your item frozen or cold during transport. How much coolant you need and which type will depend on the distance and length of time the package is traveling and the temperature it needs to maintain throughout its journey. When using dry ice, you also need to be aware of and abide by the restrictions associated with it.
• Transport speed: Most times, you’ll want next-day air or two-day shipping to make sure your product arrives at its destination quickly. Also, avoid shipping your product toward the end of the week or near a holiday; you don’t want it to sit at a shipping center over a (long) weekend. Planning ahead and choosing the fastest shipping option available is imperative for your product to arrive in pristine condition.
• Carrier: With an experienced carrier, you won’t have to worry about shipping delays, mishandling, or other rookie mistakes while trying to meet tight delivery deadlines. FedEx, UPS, and USPS are all good options, although FedEx may be the most appealing because of their FedEx Temp-Assure services. If you’re a high-volume seller, you may be able to negotiate with your carrier for special, discounted pricing.

Or, you can take advantage of a 3PL’s connections, like MyFBAPrep. We collaborate with these and other reliable carriers to obtain the best rates for clients. You’ll also enjoy optimized shipping times so your temperature-sensitive goods reach their destination safely and promptly.

• Timing: Timing is everything in cold chain logistics. Some perishable items may be able to last several days in transit, while others will only make it 24 hours. So, it’s best to pick your carrier’s fastest shipping option that’s still cost-efficient for your business. You should also send your shipments early in the week so your deliveries aren’t delayed over the weekend. If you’re approved to sell perishable items via Amazon FBA, you’ll have to deliver shipments to your FBA warehouse at least 90 days before the expiration date (Amazon will dispose of anything within 50 days of the “best by” or “sell by” dates).
• Plan according to temperature: It’s not uncommon to ship frozen food with the expectation that it’ll thaw and be ready to eat by the time it arrives at a consumer’s doorstep. If this is your strategy, you’ll likely need to employ refrigerated containers (reefers) during transit and strategically plan your shipping routes to minimize the risk of spoilage.

Leading solutions and service providers

With cold chain shipping increasing in usage, 3PLs are also expanding their cold chain management services. As such, more and more retailers want to outsource their cold chain warehousing and distribution to encourage their business growth. Because it requires specialized labor, warehousing, and transportation, a 3PL with experience and expertise in managing sensitive products can save brands significant costs.

When looking at 3PL providers, it’s important to evaluate:

• Shipping times and on-time deliveries: A 3PL must be able to provide one- to two-day shipping to avoid products melting or spoiling in transit.
• Omnichannel capabilities: If you manage multiple channels, you need a provider that can handle omnichannel selling so you’ll feel confident that your logistics can keep up with your business growth.
• Nationwide coverage: With nationwide coverage, you can employ a distributed inventory model. This means your products spend less time in last-mile delivery transit.

Wrapping up — Moving forward with cold chain shipping

If your brand’s growth is dependent on incorporating cold chain shipping, you need to dedicate time and energy into either perfecting your logistics or finding a great 3PL partner to handle it for you. Cold chain shipping will continue to corner the market as consumer preferences fluctuate due to the introduction of new products and brands. Take advantage of this growth to expand your brand and achieve greater success (and revenue).

Temperature-controlled logistics is complicated terrain. These types of deliveries are always on a time crunch, so you need tight planning for your packaging, timing, and routes — otherwise, you could end up with ruined goods that cost you revenue and erode your business reputation. However, you can remove some of that headache with MyFBAPrep’s comprehensive solutions and team of dedicated experts. From regulatory compliance to perfect packaging, we have you covered. Contact us today to upgrade your fulfillment process, including cold shipping and beyond.

Published: June 12, 2023
Updated: July 8, 2024