How real-time monitoring reduces cold chain logistics costs

Published by Marvin Espino on

shipment tracking via GPS

The cold chain process is very expensive. Unlike regular supply chains, most cold chain goods must travel in a specified temperature range of 2°C to 8°C (35°F to 46°F) and hence use costly cooling equipment. Plus, shipping processes incur the same expenses as typical supply chains. Pretty expensive, right? Still, there are ways cold chain companies, can save money.

It might be time to rethink logistics costs. One cut back strategy, without sacrificing efficiency, is to invest in good monitoring technologies. Temperature sensors, GPS trackers, and IoT devices are all cutting-edge technologies that, if placed in the logistics arm, will reduce expenditures in many ways. As a result, the cold chain delivers more products, more accurately, while maintaining product quality.

Here’s how using these real-time monitoring technologies can prevent logistics issues, product errors, spoilage, etc. – which, in turn, will reduce the cost of managing the cold chain.

Cold Chain Monitoring Can Reduce Product Spoilage

In the cold chain, spoilage incurs the biggest loss in revenue. Most cold chain products are sensitive substances or fresh produce that can spoil when shipped over great distances and long travel times. Even with proper cooling technologies, spoilage can still be a problem. While trained handlers who are familiar with the complexities of cold chain transport can prevent spoilage, outside logistics staff and 3PLs or hired vehicles may not always be adept enough to control the situations that arise.

To minimize this expensive risk, IoT devices that can monitor shipments in real-time will be a big help. These technologies can flag temperature excursions, hardware and coolant malfunctions, and protocol deviations. When the device has sensed a problem, it sends alerts to the management to stave off any more losses.  

Here are the simplest ways real-time data can help reduce shipment spoilage:

Rerouting shipments

The longer the shipment’s travel time in transit, the riskier it becomes. This is especially true for most cool cargo (cold chain products). When time, light, and heat sensitive products spend a longer time in transport, the more sensitive they become. Real-time monitoring devices can send alerts during these environmental challenges so that compromised or damaged goods can be rerouted to the closest repackaging center or alternative market. In this way, shippers can either prevent more goods from becoming damaged or possibly, saving the compromised shipments.

Reducing Poor-Handling Damages

Package-level tracking or package-level sensing can detect poor handling behavior. Examples of this poor behavior are packing, repacking, or offloading of temperature-sensitive goods outside temperature-controlled environments for longer than the acceptable temperature range. Another is loading of cold chain products into containers that haven’t been preconditioned. Temperature sensors can gauge the temperature of the packages and can tell whether the temperature range is still acceptable as prescribed by the product manufacturer. These devices can also detect temperature excursions during transit; for example, when the refrigerators are left open for too long. Overall, compromised products are easily detected using these real-time technologies.

Improving Packaging Efficiency

Having real-time monitoring and alerts help reduce the cost of cold chain risk management. They allow less packaging because it is unnecessary to overpack containers with protective wrappings. In this way, shipping expenses and handling costs are reduced.

Using Reusable Packages or Shipping Containers

Sometimes, the recipients do not return reusable packages. Placing monitoring devices on some reusable packages can prevent theft. When all packages circulating through the logistics are equipped with these materials, then no matter where they are in the world, their locations can always be tracked and carriers notified to request their return.

Cold Chain Monitoring Can Reduce Transport Costs

Active tracking, thorough logs, and real-time alerts on temperature excursions give shippers, handlers, and 3PLs information to prevent problems from escalating to irreparable situations. 

Monitoring not only reduces the cost of replacing damaged products, but also curb additional expenses such as:

  • Shipping costs                                                                                                                  
  • Working capital
  • Detention costs and delays

Cold Chain Monitoring Reduces Operational Costs

Real-time cold chain tracking solutions can speed up or automate activities. Through time, they can improve, if not outright replace, slower manual processes.

Here are several significant gains that not only reduce operational costs, but also add to the bottom line:

Lower Customer Acquisition Costs Through Better Service and Retention

Providing an excellent cold chain service will leave a positive, lasting impact on customers. When a product is delivered accurately and on time, both sides of the business are happy. Only reliable monitoring tools can provide that level of efficiency in the cold chain’s logistics arm.

Real-time reliable tracking data, can be shared to consignees and customers. Doing so will prevent frantic calls from customers in the middle of the night, asking the location of their shipments.

As the logistics team improves, the cold chain as a whole improves as well. All the customers it serves will continual to use their services.

Reduce Transport Costs Through Better Supplier/Carrier/Route Benchmarking

Using real-time monitoring devices can help improve assessments of what’s best for the company in terms of shipping performance, picking routes, modes of transport, packaging 3PL, and the likelihood of spoilage.

This information can be used to the company’s advantage. With the data in hand, the company can now calculate where savings will likely occur, without sacrificing the effectiveness of the service. 

Better Maintenance, Lower Downtime

Using asset monitoring solutions will help gauge the performance of company assets. On top of that, the health and status of equipment can be tracked, enabling regular maintainence, thus preventing costly breakdowns in the middle of production or during transport. Even though modern cold chain equipment excels at its job, its intricacies can experience failures. Having these asset monitoring technologies in place can prevent expensive replacements by sending alerts when problems are detected.

Cold Chain Monitoring Can Eliminate Crisis Management Costs

Preventing the possibility of cold chain failure is always costly. Downstream ripples such as loss of consumer trust, loss of market share, or in extreme circumstances, the loss of life, can drag down even the toughest of companies. Real-time cold chain monitoring can help reduce these possibilities by:

Reducing Legal Liabilities

The capability to track consignments doesn’t just add to the bottom line, it can also minimize overhead. Delivering up to the customer’s expectations can leverage better insurance premiums and co-pays. On top of that, a real benefit lies in preventing liabilities that will not only eat the bottom line, but could also lead to potential company closure.

Cold chain products are vital products. Vaccines, disease-preventing medicines, and other cold chain products are required to have the highest quality upon delivery. Failure could lead to increased incidences of disease-transmission, or even worse, death. Using real-time monitoring devices will benefit all stakeholders involved in the supply chain—from the manufacturers to the logistics company, down to the end-user patients.


Leave a Reply

Your email address will not be published. Required fields are marked *