The Australian and New Zealand Cold Chain Sector – The Road Ahead
Written by Nick Greenwell, Director of Property for TMX
The ANZ Cold Chain sector is integral to the region’s food and pharma supply chain. It plays a critical role in feeding the population and supporting broader responses to health initiatives, like vaccine rollouts, by ensuring that perishable goods are transported and stored at the appropriate temperature from the source to the consumer.
In 2023, the sector is likely to face several challenges, but the opportunities for those willing to innovate and thrive are many. Here are a few key challenges and opportunities that TMX sees as critical for the sector in the future.
Challenges
Labour shortages: The ANZ cold chain sector relies heavily on manual labour, so with the NZ Government describing labour shortages as “the biggest issue facing New Zealand businesses” and an unemployment rate of only 3.5% in Australia, we are likely to see a continued shortage of workers in 2023 impacting the sector.
This could lead to increased labour costs and difficulty finding and retaining employees. However, there may also be opportunities to use automation and other technological solutions to improve efficiency and reduce the reliance on labour. TMX recently supported Teys Australia in designing and managing the delivery of a 12,340sqm fully automated cold storage facility at the Port of Brisbane, which included the installation of a high-bay automated storage and retrieval system (ASRS) and a multi-shuttle system.
Climate Change: Australia is already experiencing the impacts of a changing climate, with every decade since 1950 being warmer than the one before it, and our average temperature already up by around 1.44 degrees Celsius since records began in 1910. The story is similar in New Zealand, where extreme weather events have occurred four to five times more frequently in the last decade.
We live this reality through more frequent and severe heatwaves, bushfires, floods, and droughts, and we have seen a range of these impact our supply chains in recent months and years. These events can disrupt the cold chain by damaging infrastructure, reducing the availability of refrigerated transport, and increasing the demand for cooling services.
Now, more than ever, there is a concerted push from investors and consumers for the sector to adopt more eco-friendly practices and technologies; the smartest organisations are responding.
Fuel Costs: As the cost of diesel continues to rise, the sector will need to find ways to reduce its reliance on fossil fuels and adopt alternative energy sources. Additionally, the cost of refrigerants, essential for maintaining the temperature of goods during transportation, has increased in recent years due to stricter regulations on their use.
Longer shelf-life product: With the rise of eCommerce and the growing trend of online grocery shopping, there is a need for longer shelf-life products that can withstand the rigours of transportation and storage. It is estimated that up to one-third of all food produced globally is lost or wasted. In Australia, this is due to a variety of factors, such as overproduction, inadequate storage and transport, and consumer waste. Part of the solution requires the industry to drive innovative packaging and storage solutions, and adopt advanced temperature-controlled logistics systems.
To help address these issues, many organisations have recently made significant investments in renewable energy sources to power their new cold storage facilities, improved insulation in warehouse design and implemented more efficient packaging and transportation methods.
Opportunities
Locally produced and sourced food products: As consumers become more concerned about the environmental impact of their food choices, there is a growing preference for locally grown and produced products. This presents an opportunity for the cold chain sector to support and facilitate the distribution of locally sourced products.
Trade & Export: As the world's population continues to grow, there is an increasing demand for high-quality food products, and Australia is well-positioned to meet this demand with its abundance of natural resources and a strong reputation for producing high-quality food products. Throughout 2022 we have seen significant growth opportunities for the Australian cold chain sector to tap into emerging markets, such as Asia and the Middle East, which are experiencing rapid economic.
Online grocery shopping and home delivery: It is anticipated that we will continue to see growth in this sector in 2023, leading to an increased need for cold chain logistics to support the transportation and storage of perishable goods.
Technological innovation: To improve efficiency and reduce costs, many organisations are now implementing sensors and data analytics to monitor temperature and humidity during transportation and storage. This allows them to reduce waste and ensure that goods are maintained at optimal conditions.
The ANZ cold chain sector will continue to face challenges in 2023, including the need to address sustainability concerns, the increasing demand for locally produced and sourced food products, and the potential for export growth. To take advantage of future market opportunities, it will be important for the sector to adopt innovative technologies and practices and work closely with stakeholders across the food industry to continue to play a vital role in the country's supply chain and support the growth of these economies.
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