Market report

Cold chain logistics market heats up with sustainability drive

Cold chain logistics

According to the latest research by Astute Analytica, the global cold chain logistics market is projected to reach a size of US$ 1,262.5 billion by 2032, up from US$ 322.1 billion in 2023, at a CAGR of 16.39% during the forecast period 2024–2032.

The global cold chain logistics market is experiencing significant growth, propelled by the surging demand for temperature-sensitive products across sectors, particularly pharmaceuticals and food. The pharmaceutical industry’s critical reliance on cold chain logistics is undeniable, with 70% of biopharmaceuticals demanding precise temperature control. The crucial role of this market underscores its direct impact on saving lives and ensuring the efficacy of vital medications.

Challenges and Inefficiencies

Despite its importance, the cold chain faces significant hurdles. The loss of 35% of vaccines annually due to improper practices reveals a deep-rooted inefficiency in current systems. This signals a critical need to upgrade infrastructure and technological solutions across the industry. Geographic factors also play a role, as the rapidly developing Asia-Pacific region, home to over 60% of the global population, drives the demand for increased cold storage capacity.

The cold chain logistics market contributes approximately 3.5% of the global carbon footprint. This highlights the importance of sustainable practices, technological innovations, and AI integration in reducing the environmental effects of the industry while ensuring optimization and efficiency in operations.

Key Growth Indicators

Several statistics highlight the market’s expansion potential. The U.S. and India both boast vast cold storage capacities, while the steady rise in refrigerated trailers worldwide further supports market growth. However, despite advancements, approximately 20% of cold chain shipments still experience temperature deviations, demanding robust improvements in maintaining temperature integrity. Air cargo, critical for high-value, perishable products, demonstrates the continued reliance on this transportation mode despite its comparatively smaller volume footprint.

Food Sector Reliance and Concerns

The food sector depends heavily on cold chain logistics market. Post-harvest food loss amounting to 13% globally signifies shortcomings in the existing infrastructure. This issue is particularly serious as specific segments like the meat cold chain and the frozen food market continue to grow. The projected rise of the frozen food market to USD 380 billion by 2030 emphasizes the ever-increasing need for reliable cold chain solutions.

Cold Chain Warehouse/Storage Solution Dominate Cold Chain Logistics Market, Control More than 55.6% Market Share

The global capacity of refrigerated warehouses reached an impressive 7.59 billion cubic meters in 2022, marking a significant increase from 616 million cubic meters in 2018. To analyze this growth on a per-person basis, the Global Cold Chain Alliance (GCCA) employs a market development index. This index compares cold storage capacity with urban populations, revealing a worldwide average of 0.15 cubic meters of cold storage per urban resident in 2020. Notably, this average varies considerably across countries, ranging from less than 0.1 cubic meters per resident to a high of 0.9 cubic meters in specific regions.

In 2023, North America dominated the global cold chain market, holding a significant 34.1% share. This dominance stems from the region’s well-established logistics infrastructure and ongoing investments in the sector. When looking at facility type, public warehouses claimed a remarkable growth of global cold storage revenue in 2023.  An important consideration for operators is the cost of energy, which can comprise up to 30% of a cold storage facility’s operating expense. This factor is prompting a strong focus on sustainable solutions and energy efficiency, including the adoption of technologies like automated storage and retrieval systems (ASRS) alongside renewable energy sources such as solar and wind power.

Opportunities in Emerging Markets

Developing markets within Asia Pacific, Latin America, and Africa offer substantial growth opportunities for the cold storage sector. These regions are fueled by expanding populations, rapid urbanization, and increasing disposable incomes. India, as a prime example, is expected to reach a cold storage capacity of 40 million metric tons by 2025. This expansion from 31 million metric tons in 2019 is directly supported by initiatives from both the government and the private sector.

Frozen Temperate Type Control More than 63% Share of Cold Chain Logistics Market

Cold chain logistics, the specialized transportation of temperature-sensitive goods such as frozen foods, pharmaceuticals, and chemicals, is a rapidly expanding market.  Wherein, the frozen temperature range (-18°C to -25°C) plays a pivotal role in the cold chain logistics market. In 2023, this segment held the largest position with a remarkable 63% revenue share.  Furthermore, it is projected to exhibit the fastest growth with a CAGR of 16.55% through 2032.  The widespread availability of specialized cold chain solutions tailored to the frozen temperature range is a significant driver of this growth.

Within the various components of cold chain logistics, the storage segment commanded the market in 2022, accounting for a substantial 51.4% share. Projections indicate it will continue its growth trajectory with a CAGR of 17.5%. This dominance is fueled by an escalating demand for refrigerated warehouses, which are crucial for storing perishable food and beverages, as well as temperature-sensitive biopharmaceutical products. As per Astute Analytica, the Asia Pacific region stands out as a major growth hub for the cold chain logistics market.  This growth is propelled by several factors, including a boom in frozen food production, the expanding need for refrigerated storage solutions in the pharmaceutical sector, and an ongoing surge in the development of dedicated refrigerated warehouses.

The Food and Beverage Cold Chain Logistics Market is Forecast Reach USD 779.35 Billion by 2032

The food and beverage cold chain logistics market is experiencing robust growth, fueled by a surge in frozen food consumption, the urgent need to reduce food waste, and the expansion of organized retail in the APAC region. This growth offers significant opportunities for businesses, with reliable data providing vital insights to gain a competitive advantage. Wherein, the rise of third-party logistics providers specializing in cold chain transportation added more fuel to demand in food and beverage market. Today, a trend towards higher integration is prevalent, as logistics companies seek control over various supply chain elements to ensure temperature stability. Technology also plays a key role, with advanced tools assisting shippers in optimizing routes for efficient delivery of temperature-sensitive goods.

Food safety and waste reduction are crucial concerns with direct market implications. The CDC estimates 48 million annual cases of foodborne illness in the U.S., leading to 128,000 hospitalizations and 3,000 deaths.  This negatively impacts brand reputation and revenue. Globally, 2.5 billion tons of food waste was generated in 2023, with households contributing 61%. Digital traceability solutions are emerging as a powerful tool to secure the food and beverage supply cold chain, enhancing safety, and potentially minimizing waste. This presents a significant opportunity within the cold chain logistics market as businesses seek efficient and reliable solutions to combat these challenges.

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