Setting the temperature right: Snowman Logistics

Setting the temperature right: Snowman Logistics

Vishal Lather, COO, Snowman Logistics Ltd feels that cold chain industry in India is posed with challenges, but is also hopeful of a better future. Excerpts from an interview with this seasoned professional of the logistics vertical:

 

What does future hold for temperature- controlled logistics in India? Does the future projections make you upbeat?

Indian cold chain industry poses a compelling future albeit with challenges. The market is facilitated by favourable government initiatives and enhancement in technology to improve the quality of storage and transportation facility. The market is witnessing a transition from traditional cold storages to fully integrated cold chain projects that would bring efficiency and increased productivity of cold chain companies. With the rising exports of seafood, dairy products and other perishable items, major players will upgrade their facilities in order to store broad variety of products under a wider temperature range.

 

What are the latest technology being incorporated in the cold chain supply?

Creating and maintaining ideal temperatures for different commodities from the point of production to the end consumer is of vital importance in the cold chain industry. The core challenge lies in monitoring and controlling of variations in temperature. A variable-speed drive (VSD) compressor is an air compressor that takes advantage of variable-speed drive technology. The speed of the compressor motors is controlled by a special driveto control the speed of the unit and an advanced micro control system as per the load, therefore, energy is saved as compared to a fixed speed equivalent. Eutectic Refrigeration System is used for the vehicle (reefer). It runs with electrical charge and not with engine power. The eutectic system has a simple operation with no moving parts of refrigeration machinery, during transport. As there are no moving parts during transport, there is no wear and tear of the refrigeration machinery. Cooling is stored in Eutectic plates before transport, using main electric supply. After the system is charged with cooling the reefer container can be used for the whole day. The eutectic system has low operating and energy cost, as compared to diesel- powered refrigeration units. It holds for 10 to 12 hours with 3 to 4 hours charge. To achieve a full-fledged connectivity and accurate temperature monitoring, Wireless Sensor Networks (WSN) comes handy, as it is a combination of sensors, microcontrollers, and RF handsets. This network is controlled by the IoT system and can communicate via these sensory organs. Time Temperature Indicators (TTI) indicate the time-temperature history of the products from the time of produce till the end market. They are easily accessible and inexpensive. Automatic Storage and Retrieval System (ASRS) are helpuful too. Automation is for loading, unloading, shifting and moving, as required by the high volume of loads. An automated storage and retrieval system (ASRS or AS/RS) consists of a variety of computer-controlled systems for automatically placing and retrieving loads from defined storage locations. ASRS is necessary when there is a very high volume of loads being moved into and out of the storage. It is required since storage density is significant because of space constraints. No processing is included hence no value is added in this procedure. Accuracy is key, because of potential expensive damages to the load.

 

What are the challenges that the cold chain management and supply face in India? How can they be tackled?

I would say, lack of quality cold warehousing infrastructure and transportation. There is a severe shortage of cold chain warehousing capacity. It is highly unorganised as only 25 per cent of the capacity is available for fruits, vegetables, processed foods and pharmaceuticals, whereas 75 per cent of the capacity is dedicated to potatoes. There is a lack of cold storage and refrigerated or reefer trucks. Perishable goods get spoiled due to long transit times on bad roads, owing to dense traffic on bottlenecks. India’s previous web of multi-layered taxes increased both risks and costs across the supply chain, scaling up losses and shrinking margins. Indian suppliers also struggle to secure two-way cargo movement due to several reasons including a shortage of drivers. This leaves cold chain fleets under-utilised, limiting revenues to transporters and increasing freight costs to consignors. There is a lack of reefer trucks too. Cold chain is ineffective without temperature- controlled distribution connectivity between source point and market. Currently there is 31 Million MT of cold storage infrastructure and the capacity in reefer transport is estimated at 7,000 vehicles. At an average of 10MT per vehicles with estimated turn-around of one week, this fleet translates into 3.6 Million MT only, or transport availability for only 12-15 per cent of storage capacity. In India, the supply chain of most products is long and fragmented. A product changes many hands from source to delivery point. Most workers involved in this are not properly trained in handling temperature-sensitive products resulting in deterioration of product quality before reaching the consumer. Fuel costs in India constitute around30 per cent of operating expenses of cold storage in India as compared to 10 per cent in the West. Further, cold storages are dependent on steady supply of power. Most Indian regions face power cuts. Hence, these companies have to invest in power back-ups, which push up the capital investment requirement.

 

Do you think the government is doing enough to support this sector?

Indian cold chain market has been propelled by government initiatives such as 100 per cent FDI, monetary and tax benefits, establishment of National Centre for Cold Chain Development and others. Additionally, rising export demand for frozen food has also boosted the revenues of the cold chain market of India over the period 2010-2015.

 

Is there good coordination between warehousing and transportation system? How have you created an efficient system at Snowman Logistics?

Transportation plays an important role in logistics system and its activities appear in various sections of logistics processes. Without the linking of transportation, a powerful logistics strategy cannot bring its capacity into full play. At Snowman Logistics we have created an efficient system by high end integration of technologies such as WMS for Warehouse management and GPS Technology for Tracking vehicles which helps in monitoring logistics through out India from a single command tower.

 

How are the issue relating to logistics in big city and tier-II or tier-III cities different? How do you tackle them?

Usually, the Indian logistics service providers have excellent reach in metros cities, but they lack proper infrastructure in tier-II and tier-III cities of the country, which are also immensely potential e-commerce markets, positioned to comprise nearly 45 percent of the total customer base by 2020. This burgeoning e-commerce market in the country’s Tier 2 and Tier 3 cities is fuelling the need for more customer-centric retailing that integrates metro-city-like facilities such as timely delivery of products and easy returns expedited through improved customer service. As a result, both traditional logistic players and new entrants are increasingly foraying into these tier-II and tier-III markets, setting up high-tech warehousing infrastructures and another big-ticket logistic project.

 

Everyone is betting big on Artificial Intelligence as a game-changer for the logistics sector. What’s your take?

With the help of AI, the logistics industry will shift its operating model from reactive actions to a proactive and predictive paradigm, which will generate better insights at favourable costs in the back office, operational and customer-facing activities. For instance, AI technologies can use advanced image recognition to track the condition of shipments and assets, bring end-to-end autonomy to transportation, or predict fluctuations in global shipment volumes before they occur. Clearly, AI augments human capabilities but also eliminates routine work, which will shift the focus of logistics workforces to more meaningful and value-added work.

 

Given Indian logistics sector is mostly unorganised, do you think India will benefit from AI?

AI holds immense potential to optimise logistics, owing to the fact that machine learning algorithms can analyse large, diversified data sets quickly. This means better accuracy in demand forecasting and real-time adaptation to changes in variables, thus reducing risks and enabling companies to capitalise on opportunities as they happen.

 

What are your plans for the coming year?

We have invested aggressively in technology and processes, and are determined to continue with it, in order to facilitate increased automation. We give utmost importance to quality and strive for constant upgradation of the same. As we deal in food products we focus mainly on the improvement of service delivery. We aim at enhancing customer satisfaction by customising services as per their needs. While we ensure efficient transport and delivery through reefer trucks, we are also planning on expanding our transportation and warehousing facilities. We are taking efforts to increase our footprint in the years to come.

Managing Editor

Nidhi Raj Singh is the Managing Editor of L'Officiel India. You can find her hidden behind a book when she is not writing or taking photos.