Around the world, demand for cold storage solutions is growing - and growing at a pace.
It’s partly down to changes in consumer behaviour, with pandemic restrictions forcing consumers to turn to online grocery shopping and stock up on long-lasting, frozen goods over the past two years. What started as a necessity has become something of a habit that isn’t predicted to end any time soon.
According to CBRE’s cold storage report, the e-commerce share of total grocery sales is set to grow from 13% in 2021 to 21.5% in 2025. Add this to the fact that more and more commodities (including those within the surging pharmaceuticals industry) require temperature-controlled storage solutions, and the demand boom becomes apparent.
Little wonder, then, that CBRE has reported 3.3 million square feet of refrigerated warehouse space being developed in Q2 of this year in the USA alone – an astonishing 1,000% increase on the 300,000 square feet that were under construction at the same time just three years ago.
However, is the cold storage market in Europe ready to cater to such demand, and how is Maersk integrating cold storage solutions into the supply chain journey?
Responding to a changing industry
The cold storage industry has transformed enormously in recent years. Across the continent, de-concentrated, old-fashioned, family-owned businesses were earlier commonplace, as major investors focused their attention on normal warehousing ventures in line with capital opportunities.
But when Amazon announced that it was set to acquire and transform grocery chain Whole Foods in 2017, the world started to take notice. Cold storage investments went from being considered risky to something of an infrastructure play, as upgrading a formerly tired supply chain brought numerous benefits.
Now, cold storage and food production investments are considered ‘recession-proof’, as consumer demands for fast access to fresher and higher-quality food are gathering momentum worldwide.
These investments have not only brought smaller cold storage facilities into the global supply chain network, but have also seen the facilities upgraded to modern standards – bringing about sustainability, efficiency and productivity improvements.
Despite this, connectivity between cold storage facilities across Europe has been fairly limited and forced customers to deal with several providers as part of their supply chain journey – a pain point Maersk aims to alleviate.
With a single-use operator, cold storage can function as a cog in the supply chain machine rather than just for standalone storage and distribution. And if your cold chain management partner has a global, multicarrier network at its disposal, you can connect the dots of the supply chain effectively, all from one place.
Support through a growing network of locations
Cold storage locations in Europe have traditionally been based on a model whereby containers would arrive in a port and then be moved to a facility nearer the consumer. However, analysis of the market and customer pain points revealed that port-centric cold storage solutions build more agility and resilience across the supply chain.
The ability to load temperature-controlled containers at the port means payloads can be optimised against schedules ahead of transportation, mitigating the need for expensive empty cargo movements and avoiding potential Detention and Demurrage costs.
It also means that the final parts of production and value-added services – such as packaging, quality inspection, pre-cooling, blast-freezing and more – can be performed at the port to enable higher speed to market for products.
Coupled with Maersk’s network-focused integrator strategy, this has been the basis of how cold storage partner locations have been formulated in Europe. By analysing the perfect market locations for cold storage at ports, Maersk can provide customers with time and cost-saving solutions as well as the perfect foundation for onward journeys across the continent.
Maersk’s facility network must cater to customer pain points in other ways too. A green approach to cold storage is becoming more and more desirable to customers as businesses’ value for sustainability continues to grow. And as cold storage can sometimes not be the most sustainable practice in operation, having energy-efficient options in the network to help companies towards their own sustainability pledges add great value.
They must also be financially competitive and provide optimum visibility on all operations – enabling Maersk to feed information back to the customer and, ultimately, offer all the tools needed to effectively manage the supply chain.
The future of cold storage
As global demand grows and supply chain agility becomes more crucial for cold storage customers, Maersk is building a strong network at strategic locations across Europe to bridge gaps in the supply chain journey.
Maersk has ambitious plans to expand its network by opening a number of state-of-the-art facilities around the world, including at major reefer ports within Europe.
These facilities will be shaped around understanding and easing customer pain points – looking to optimise efficiency, productivity and capacity, as well as offer the most sustainable solution with full carbon neutrality throughout.
Having Maersk-owned cold storage at the right locations means being able to offer more space at the most connected terminals in Europe, while more innovation and automation inside will reduce costs for customers over a third-party vendor. Managing logistics from one place and utilising the same Warehouse Management System technology for all facilities, meanwhile, will add further visibility and control.
While cold storage demand is indeed booming worldwide, there are still questions to be answered and goals to be met before the market operates sustainably.
By investing in brand-new, energy and production-efficient cold storage warehouses at the right locations across European ports, Maersk will be integrating cold storage into the supply chain network and providing the perfect platform to cater to ever-evolving consumer behaviour.