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How to Cut Cold Chain Costs


1. Understanding cold chain and logistics costs


Understanding logistics costs vary from company to company, but generally includes transportation, labor, warehousing, and management costs, with warehousing and transportation accounting for the majority of the costs. Other costs include fuel costs, delays in arrival at ports that could later lead to higher shipping charges, complex international trade regulations such as compliance checks and document processing, and later delivery delays and storage costs.


For temperature-controlled products (ambient and cold chain), especially high-value products, the process and cost are quite different.


When it comes to logistics cost management, efficient performance and timely delivery are just as important as reducing logistics costs. Both should be well balanced with each other.


There are also overhead costs to consider. For example, the downstream impact of a bearing failure can have a significant impact on patient safety and health, as well as customer loyalty and brand integrity.


Cold chain transportation is a thriving industry. It also plays an increasingly important role in the transportation of food and chips, or today the COVID-19 vaccine. Cold chain transportation can be described as wise and profitable. How can you save money while maintaining high efficiency and high quality on the long road of cold chain transportation?


Firstly, please check your vehicle first before driving. To ensure the safety of the cargo and reduce the loss due to damage to the cargo, make sure the crate or trolley is in good condition and no cold air is leaking. This can save your costs and improve your profits as much as possible.


Secondly, maintain the chiller on a regular basis. Perform preventative daily maintenance for peak seasons to facilitate handling of bulk materials. Don’t allow small mistakes to hurt your business. In addition, using a high-quality cooling unit can save a lot of maintenance costs.


Thirdly, install a cooling unit with a built-in standby system. The integrated standby system helps reduce energy consumption when parking or loading and unloading. In this way, you can not only save money and energy consumption but also improve efficiency and get more profit.



2. How to reduce cold chain and logistics costs


2.1 Reduce handoff points

As the number of transfer points in the supply chain increases, so does the associated risk. Temperature and stability research incorporating the Internet of Things (IoT) and cloud solutions help identify and mitigate risks across supply chain channels and facilitates accurate decision-making that leads to significant cost savings.


2.2 Consolidate shipments

A full container load (FCL) is suitable for shipping goods with less than one container load (LCL). This means that only products similar to the product will be loaded and comply with company specifications. Given the current refrigeration capacity and lack of containers, FCL may be a limited option. You don’t have to share space with other suppliers’ products, which reduces the chance of customs delays that occur outside your company’s control. However, the

LCL is becoming an increasingly popular and economical option. Shipping integration offers greater opportunities to ship products economically. This is a combination of several small shipments from suppliers with the same destination in a single shipment. There are risks and production schedules and temperature requirements need to be adjusted.


2.3 Move to a single integrated visibility platform

As a general rule, supply chain processes should be connected through a central platform accessible to all involved parties. This allows parties to improve efficiency, discover and correct supply chain weaknesses, and work together to improve relationships. Controlant’s IoT-enabled cloud software platform provides user-authorized access to live shipping data and the remaining APIs for software integration with enterprise resource planning (ERP) software and other business systems.


2.4 Monitor temperature in real-time

Improve forecasting and cost control with a better understanding of risk points, good webs, package combinations, and temperature conditions at different delivery points by maintaining transparency across the end-to-end supply chain. can do.

Real-time temperature, time, and product location tracking data provide up-to-date relevant data, allowing companies to respond quickly to avoid temperature fluctuations and product waste, reducing the need for large volumes of safety stock. It enables you to minimize product and operational waste.


2.5 Eliminate crisis management costs

The direct and indirect costs of cold chain failures can be extreme. In addition to this, there is a direct cost of products and operational waste. Logistics costs are associated with quality inspection, procurement of new supplies, and replenishment. The downstream costs of a failure can include loss of consumer confidence, loss of market share, and even loss of life. The cost of investigations and proceedings can be high and can ruin your company.

Active supply chain monitoring and intervention programs are important for connecting dots and ensuring compliance with logistics partners and can also be used for better premium and out-of-pocket negotiations.

Reviewing supply chain cost savings from a top-down perspective and how automated data collection can help provide comprehensive insights is a review of the entire cold chain logistics process and cost-cutting actions. It is important in identifying.

Real-time cargo temperature monitoring and intervention is an important aspect of efficiency planning. Adopting new technologies such as IoT, cloud, and blockchain can improve cold chain efficiency and transparency, reduce costs and improve overall services.

Kingclima is a professional vehicle cooling solution provider. We offer refrigeration unit and air conditioner for trucks, vans, trailers, and RVs. Being a leading manufacturer of vehicle referigeration unit and AC unit, Kingclima has dived into the industry for 20 years. Trucst Kingclima, follow the market trend, make perfect cooling solution.
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