COVID-19 impact on global Cold chain monitoring market, in 2021
The pandemic hit the global economy at large during the start of 2020 and has created unprecedented turmoil and change for individuals and organizations across the world. The pandemic has led to the closure of workplaces, restrictions on travel, and the creation of the work-from-home option for almost all employees, which has created challenges for businesses to operate. In the realistic approach, it has been assumed that the first three-quarters of FY 20–21 have witnessed low growth in the cold chain monitoring market, followed by a steady recovery during the last quarter of FY 20–21. In the most realistic scenario, the cold chain monitoring market is expected to grow at a CAGR of 11.6% during 2021–2026. The market is expected to witness a single-digit growth in FY 20–21 due to the COVID-19 pandemic.
Cold Chain Monitoring Market Dynamics
Driver: Increasing global demand for temperature sensitive-drugs
There is an increase in demand for temperature-sensitive drugs such as vaccines and products that are dependent on particular temperature ranges for chemical stability. According to the International Institute of Refrigeration (IIR), the demand for heat-sensitive health products such as drugs, vaccines, insulin, derived blood products, and oncology products is rising globally every year. Hence, the transportation of these drugs is the most critical phase in the cold chain due to the possibility of unforeseen environmental variations. Any change in temperature during transportation can affect the medicines, losing their potency to cure the ailments they are meant for, thereby leading to ineffective treatment in many cases. To avoid the degradation of any pharmaceutical product, it is crucial to maintain parameters with respect to the product-specific environment, including air quality levels and temperature ranges. Further, providing end-to-end visibility and condition monitoring at the packaging stage of the products throughout the pharma supply chain operation is of utmost importance. As manufactured drugs contain high-value active ingredients that have a shorter shelf life and strict temperature requirements, the need for temperature control and monitoring through the entire supply chain has increased. Therefore, temperature-sensitive pharma products require cold chain monitoring solutions. Cold chain monitoring and tracking refer to controlling devices equipped with sensors that ensure the transportation of temperature-sensitive products at a given temperature range, that is, between 2 and 8°C.
Restraint: High cost of implementation
The installation cost of cold chain monitoring systems is significantly high. Deploying sensors and putting the connectivity network in place requires a high cost. Shipping high-value consignments over long distances within their prescribed temperature range require a huge investment. Therefore, companies involved in cold storage and cold transportation remain skeptical about spending on developing monitoring networks. Cost is the major hindering factor to introducing real-time cold chain monitoring systems, particularly for small- and medium-sized players, and many participants in the food industry are SMEs, which are often operating on lean margins. The massive size of the cold chain market requires high investments in cold chain monitoring solutions. These solutions are of two types: active refrigeration systems and passive cooling devices. Although passive cooling solutions may seem basic, the cost for setting up the cold chain is quite high. Large-scale players involved in the cold chain network can spend the necessary amount and get the benefit from the increased reliability over a much shorter timeframe. However, smaller players generally refrain from spending on such monitoring devices as they cannot recover their money. The impact of this restraint is high. The high cost of cold chain monitoring solutions would be holding back the growth of the cold chain monitoring market.
Opportunity: Better control of assets in warehouses using automation and cold storage technologies
A large warehouse witnesses different temperature zones. Hence, continuous temperature monitoring is essential to check the temperature at which goods are stored and the actual condition of these goods. For the best utilization of warehouses, complete control over valuable equipment can be achieved by the adoption of automation, including the use of robotic equipment to carry out inter-warehouse stock movements and loading and unloading activities. Warehouse automation aids efficient storage space utilization, reduces wear and tear, increases reliability, and reduces operating costs. Real-time visibility about shipment location, temperature, humidity, and other environmental factors enables manufacturers and distributors to take faster preventive actions, thereby reducing the risk of spoilage or contamination. Maintaining temperature at an optimum level, coupled with efficient energy management, that is, the use of automated storage and retrieval systems (ASRS), can reduce warehouse energy costs from 35 to 50% as automated warehouses offer more storage in less refrigerated space. The long-term storage of frozen foods and other perishable consumer products is one of the largest problems in the cold storage supply chain. By automating processes such as stock rotation, monitoring goods in transit, transport, and location management processes, warehouses can ensure that they are always distributing fresh items. RFID chips and scanners track expiry dates, and automated picking systems can locate these expired goods for separation and disposal. Several kinds of medicines, vaccines, and various types of farm products such as fruits, vegetables, and eggs are preserved at constant temperatures due to their sensitive nature as they are prone to spoilage during transport and storage due to physical wear and tear. Contamination and spoilage can cause substantial losses. Thus, automation in warehouses can reduce such losses.
Challenge: Complexities involved in the installation and monitoring of cold chain monitoring solutions
Cold chain monitoring has become even more complex in recent years because of the rapid increase in customer expectations. Globalization has increased customer choices and the complexity of multi-sourcing supply chains. Cold chain networks can be spread out in terms of area as they can extend from manufacturing plants, laboratories, and storage warehouses to various transportation modes and end users such as retail chains and restaurants. Installing various sensors across all these locations can be a daunting task. Additionally, the distributed network needs to be mapped to efficiently manage the data generated from these sensors. Further, this data has to be analyzed, and actionable data has to be generated to maximize the profit. It is generally difficult to map such a vast network and derive useful data from it. Hence, issues such as scale visualization, error type pinpointing, and the formulation of responses could prove to be challenging.
Sensors, data loggers, and other devices need to be calibrated for specific applications as per their requirements. Networking devices are also required to provide ample connectivity support in various locations, thereby increasing the burden on installation service providers in the cold chain monitoring market. The market players need to overcome these challenges to provide better monitoring services across cold chains.
The market for NIR & SWIR to grow at the highest CAGR Cold chain monitoring market, by verticals, in 2026
Near-infrared light is referred to as light within the wavenumber range of 12,500–4,000 cm (wavelength from 800 to 2,500 nm). The near-infrared (NIR) spectrum typically ranges from 0.7 to 1.0 ìm. The absorption of near-infrared light is based on the vibration of the material. However, it is much weaker in intensity as compared to the mid-infrared light absorption as it is based on overtones and combined tones in the mid-infrared light region. Therefore, the measurement of samples featuring weak absorption is difficult, but the fact that samples can be measured without being diluted is an advantage.
Short-wave infrared typically (SWIR) ranges from 1 ìm to 3 ìm. It is also known as reflected infrared. Infrared radiation coming from a light source is reflected by an object in a way similar to radiation in the visible range. MWIR and LWIR lights are emitted from the objects. SWIR is similar to visible light, where photons are reflected or absorbed by an object, providing the strong contrast required for high-resolution imaging. Indium gallium arsenide (InGaAs) and mercury cadmium telluride (MCT) detectors are the popular cold chain monitorings sensitive in NIR and SWIR ranges. InGaAs detectors have high sensitivity in the 0.9–1.7 ìm part of the spectrum, and HgCdTe detectors are sensitive in the 0.8–2.5 ìm part of the spectrum. Likewise, silicon cold chain monitorings are available in the cold chain monitoring market that operate in NIR and SWIR bands. Some of the prominent manufacturers of NIR and SWIR detectors are Excelitas Technologies (US), Hamamatsu Photonics (Japan), FLIR Systems (US), and Lynred (France).
The market for the cooled cold chain monitorings to grow at the highest CAGR during the forecast period
Cold chain monitorings made using materials such as mercury cadmium telluride (HgCdTe) and indium antimonide (InSb) require mechanical cooling to increase their signal-to-noise ratio to usable levels. Indium gallium arsenide (InGaAs)-based detectors exhibit sensitivity similar to that of HgCdTe- and InSb-based detectors at room temperature; however, they can be cooled to increase their sensitivity. The cooled cold chain monitorings are usually cooled thermoelectrically or cryogenically. In some cases, liquid nitrogen is also used for the cooling of detectors. Cooling decreases the temperature of the detector, allowing it to reduce thermally induced noise to a minimal level and improving its performance. However, cooled cold chain monitorings are more expensive than uncooled ones, which restricts their mass adoption. Cooled cold chain monitorings find applications in scientific research, astronomy, security and surveillance, and spectroscopy, among others, where high accuracy is of utmost importance.
Cold chain monitorings operating in the near-infrared (NIR) and long-wave infrared (LWIR) spectral ranges mostly do not require cooling. InGaAs detectors are uncooled, but some companies offer cooled InGaAs detectors for increasing their sensitivity. Cooled cold chain monitorings generally operate in the mid-wave infrared (MWIR) spectral range.
Americas to hold the largest share of Cold chain monitoring market in 2020
North America is the largest market for cold chain monitoring in the Americas at present and is likely to exhibit a similar trend during the forecast period. Increasing demand for chilled and frozen food products in North American countries is likely to trigger the demand for cold chain monitoring solutions in the region. Cold chain monitoring infrastructure includes refrigerated storage and refrigerated transport. The escalating demand for dairy products, vegetables, and fruits is increasing the imports, as well as exports of exotic vegetables and fruits and dairy products, which is also boosting the demand for cold chain monitoring solutions. According to the United Nations COMTRADE database, in 2012, North America was one of the largest exporters and importers of perishable food, including meat, fish, and seafood, across the world. It was also the largest importer of fruits and vegetables. The pharmaceutical and healthcare industries also have noteworthy contributions toward the cold chain monitoring market growth in the region. The pharmaceutical industry is subject to stringent regulations aimed at ensuring safety and good storage and distribution practices. Stringent government regulations toward food safety and Global Cold Chain Alliance (GCCA) initiatives help shape the environment in this region, which indirectly impacts the cold chain monitoring market.
Key Players:
A few key cold chain monitoring market players are ORBCOMM (US), Sensitech (US), Elpro-buchs (Switzerland), Berlinger & Co. (Switzerland), Monnit (US), and Controlant (Iceland) are among a few key players in this market.