Cold Chain Is Now Recognized As A Sunrise Sector In India, There Is Tremendous Scope For The Development Of Cold Chain Facilities In India

Cold Chain Logistics is a sensitive sector, and needs special care. Especially in the second largest food producing country of the world. Akshay Sharma, Scheduluers Logistics, explains how it’s done.

Q- Tell us something about Schedulers logistics.

A- Schedulers Logistics started in 2011 is a young supply chain solutions company focused exclusively on the handling of temperature sensitive products for the Food and Pharmaceutical Industry.  Soros Economic Development Fund invested in the company in July 2014.  This has helped the company to increase the fleet of part-truck-load and secondary distribution vehicles in order to connect small manufacturers with major market hubs.  Schedulers is one of the few players operating in Tier II & III towns in India that can offer temperature controlled loads as small as 500 kg, catering for India’s fresh fruit & vegetable, food processing, and pharmaceutical industries.  

Q- What do you think about the current scenario of Logistics in India?

A- COLD CHAIN is now recognized as a sunrise sector in India. It is true that in a country which ranks first in milk production in the world, is number 2 in fruits & vegetables production and has substantial production of marine, meat & poultry products, the country needed a fully developed cold chain sector. However the current scenario reveals that there is a tremendous scope for the development of cold chain facilities. Cold stores form the heart of the cold chain. An overview of the cold storage industry in India indicates that the cold stores have been established initially right from the beginning of twentieth century but the further development was fairly slow. These units were mostly designed for storage of potato and were located in areas like UP, West Bengal, Punjab, Bihar, etc. It was only in sixties that the idea of multi product, multi chamber cold stores was introduced with Maharashtra taking the lead. The cold storage sector is undergoing a major metamorphosis, with the government focusing on food preservation. A lot of stress is being laid on energy efficiency as the cold stores are energy intensive. India is the world’s second largest producer of food after China and has the potential of becoming the largest in the food and agricultural sector. The total food production in India is likely to double in the next 10 years and there is an opportunity for large investments in food and food processing technologies, skills and equipment, especially in areas of canning, dairy and food processing, specialty processing, packaging, frozen food/refrigeration and thermo processing, fruits and vegetables, fisheries, milk and milk products, meat and poultry, packaged/ convenience foods, alcoholic beverages and soft drinks and grains. The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value, as per a pharmaceuticals sector analysis report by equity master. The market is dominated majorly by branded generics which constitute nearly 70 to 80 per cent of the market. India’s biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-industry and bioinformatics.  Biopharma is the largest sector comprising vaccines, therapeutics and diagnostics. 

Q- Yours is a four year old company, please share your journey from scratch.

A- Schedulers Logistics started in 2011 is a young supply chain solutions company focused exclusively on the handling of temperature sensitive products for the Food and Pharmaceutical Industry. SEDF has committed Rs 20 cr in 4 tranches in July 2014, of which we have received three. The stake is currently held equally between the promoters, Tiger Warehousing and SEDF.  This has helped the company to increase the fleet of part-truck-load and secondary distribution vehicles in order to connect small manufacturers with major market hubs. Balancing between growth against the need for effective operations is what tests the character of the organization.  For us growth was a mean of checking the stretch factor of the team and we have coped with it. Being a people intensive service oriented industry we communicate the importance of the individual in the service delivery.  Front line associates and managers are the most critical to the organization, because they are in constant touch with the end users.   We foster a culture of people taking initiatives and make decisions in an empowered manner. If the customer is happy, he will be willing to pay a premium that could make the business profitable.  If the business is profitable, the company can afford to pay more to its employees and further satisfy their requirement.  We create an atmosphere of empowerment in which people come closer together and work towards the company’s vision and business goals. We have a focused approach to build domain expertise and move up the value chain.  We have been quite successful in expanding to cover over 100 towns in India, but are looking at enhancing our footprint further in India and also South Asia.   We are now ready for the next round of funding.   

Biopharma is the largest sector comprising vaccines, therapeutics and diagnostics. 

Q- What are the challenges you comprehend in the Indian market?

A- India has seen a phenomenal growth in production of horticulture produce, dairy and meat products over the last decade. Presently, India occupies a position amongst the top three in production of a host of commodities including spices, fisheries, poultry, milk, fruits and vegetables. India – Unity in Diversity is often repeated clichéd phrase to illustrate the oneness despite the cultural diversity. One can use the same term when one describes food for the challenges here are different.  We also revel in stating that we are an agrarian economy, with this sector contributing to about 65 percent of the nations GDP. We are amongst the largest producers of fruits and vegetables in the world, but the same may not be true when it comes to consuming.  Most of these fruits and vegetables get wasted in transit.  The first solution that was suggested was food processing, and that has been able to address the issue to some extent though not completely. But even with such large production volumes, India’s present share in global farm trade is still very small. India is the second largest producer of fruits and vegetables in the world, but its share in global export of fruits and vegetables is very small.  Approximately a fifth of fruits and vegetables get wasted in the country. This is mainly caused due to lack of cold chain infrastructure which includes both storage and transportation facilities. With close to 70 percent population dependant directly or indirectly on the farm sector, the Govt has in the recent years been more focused in helping the lot of the farmers. There have been a number of initiatives taken in terms of irrigation, better seed varieties, road and communication connectivity.  India has the advantage of its geographical spread and seasons to support diverse horticultural products and provide year long business.   The cold chain industry in India is still at a nascent stage and despite large production of perishables, the cold chain potential still remain untapped due to high share of single commodity cold storage, high initial investment (for refrigerator units and land), lack of enabling infrastructure like power & roads, lack of awareness for handling perishable produce and lapse of service either by the storage provider or the transporter leading to poor quality produce. However, increasing urbanization and growth of organized retail, food servicing and food processing sector are boosting the growth of cold chain industry in India. The trend is shifting towards establishing multipurpose cold storages and providing end to end services to control parameters throughout the value chain.

Q- What is your USP? How do you see yourself different from others?

A- Schedulers offers pan India storage solutions with real time visibility of inventory for temperature sensitive products with a wide range of cold temperatures, ranging from -25°C to +5°C (-20°F to +40°F). Customers can avail of the end-to-end cold storage and secondary distribution that are cost effective, as they provide flexibility beyond conventional loads, and choose the service depending on the market and volume. This leads to enhanced efficiencies, optimized costs and a competitive advantage that translates into high impact return for food and pharmaceutical supply chains in India.  Schedulers Logistics offers its customers the choice of 3PL/4PL (Third / Fourth Party Logistics), wherein companies can outsource the entire supply chain, and benefit from getting functions like warehousing, transportation, distribution, inventory management, and IT partially / entirely managed. Empowered with a commitment to exceptional service and a culture of continuous innovation, Schedulers is a trusted and valued partner, enabling the customer to achieve their business targets and revenue growth in a highly sensitive and regulated environment.

Q- According to you, what are the positive points of Indian market that helped you in the Logistics sector?

A- Driven by E-commerce Logistics and Make in India initiative” provides detailed overview on logistics and warehousing market in India along with their segments such as Express Logistics, 3PL Market, E-commerce Logistics, Freight Forwarding Market, Industrial and Agricultural Warehousing, Cold Chain and CFS/ICD.  3PL, e-commerce logistics and cold chain are the 3 biggest segments in the logistics and warehousing industry in India based on future growth rates. The pressing need for time-sensitive delivery has reshaped the logistics industry as many traditional logistics players are now diversifying their services portfolio to make space for e-commerce logistics. Based on the rise of QSR market in India, cold chain market is also witnessing remarkable growth. The increased foreign trade has led to the CFS/ICD segment of warehousing industry to record impressive growth rates in the recent years and is expected to continue the same for the forthcoming years. The logistics industry in India is one of the predominant industries in the country with around 13 percent of the GDP being spent on the development of the logistics framework in the country.  The logistics market in India is largely unorganized as several local or domestic transporters with a fleet size of around 5 trucks or trailers accounted for more than 2/3rd of the total owned and available fleet size for road transport in India. The logistics industry encompasses several components such as transportation, warehousing, and value added services of which transportation forms the major proportion of the industry in India closely followed by value added services and warehousing. The warehousing market in India is expected to witness significant growth due to the major growth in the organized retail industry, commodity markets, and growth in industrial manufacturing and development. Many of the organized players are in the process to set up their base through the FTWZ and logistic parks which have warehousing as their key component. The cold chain industry is rising as a fast-growing logistics segment in India with major advancements and growth in the food processing sector, organized retail and government initiatives driving the industry forward in the coming years. The future for e-commerce logistics in India is as favorable as it can get as the e-commerce industry continues to grow and is expected to do so in the coming years. Infrastructure development and spending will be the key for the booming e-commerce logistics which would require high investments from the companies so as to meet the ever increasing demands.

 The trend is shifting towards establishing multipurpose cold storages and providing end to end services to control parameters throughout the value chain.

Q- What do you think about the future of cold chain logistics in India?

A- Cold chain sector in India is gaining ground with greater government thrust on reducing food wastage and has a bright future ahead of itself. Indian cold chain industry will be driven by the resurgence of user industries primarily coupled with increased government support and emergence of the organized retail sector in the industry. The favorable Indian demographical situation, rising incomes and urbanization are some apparent opportunities for the cold chain players. Additionally rising food expenditure by Indians and governmental focus on effective healthcare and nutrition will keep the industry buoyant. However the industry faces some impediments in the form of weak infrastructure and power and land sourcing issues.  Opportunities outweigh the challenges faced by the industry and hence it has ample fuel to last its growth drive in the nation. The cold chain facilities in India are utilized by industries like processed food, dairy, meat & poultry, horticulture and food service industry. Similarly supply side of the cold chain industry is netted by the number of cold storages, with existing capacities, operating in the industry and the data about cold chain projects set up under various government schemes. Indian cold chain sector has bright future ahead of itself with the much revered governmental support and changing consumer dynamics. Indian market is evolving with changing lifestyles, rising urbanization and growing disposable incomes which will be the key benefactors of growth in cold chain user industries like Food service industry, processed food industry and organized retail industry. Additionally mounting government endeavors towards reducing food wastage and penetrating healthcare in deep corners of the country will help in strengthening cold chain infrastructure in India. The cold chain sector in India is still in the nascent stage with enormous growth potential on the back of climatic diversification and geographically vast size of the country. Given the growth, Indian cold chain sector could be about INR 600 – 750 billion mark in the next 4 years. The Govt has liberalised the food processing sector considerably keeping in mind their value in increasing farm level incomes. 100 % FDI has been allowed in this sector. However there is clearly a need to incentivise manufacturing to give fillip to this industry. Further they need to come up very close to the farms due to attendant benefits of location and manpower.  In recent times the Govt is encouraging the growth of cold chain infrastructure and has rolled out a lot of sops for this. More importantly they give a willing ear to any development that could benefit the farmers and bring prosperity to their areas.

Q- You deal in consumables that are more vulnerable than other goods. How do you manage to conserve the quality of the products?

A- The Indian perishables market is generally characterized by fragmentation, low levels of processing, high potential for value addition, significant amounts of quality & quantity losses and high price volatility. In order to salvage the sector out of the above challenges as well as to leverage on the intrinsic strengths of the Indian perishable sector for incremental domestic & export opportunities, the cold chain sector offers tremendous potential to catapult India into the big league in food processing. Schedulers Logistics has been built on the ethos of providing value to the customer through Lean Logistics for cost optimisation & business excellence. This has been the thought behind extending our reach to over 100+ towns that the customers can leverage on besides taking advantage of our Less than Container load offerings of as low as 500 kg, which in the coming days will be brought down to 10 kgs.

Schedulers understands the sensitivity of the food processing and pharma sector. The consignments are compact and light but could be very expensive and rare. It is not so much the bulk but the value of it as a life saving necessity. Hence care and quality is of utmost importance here. Schedulers Express LCL service ensures temperature adherence along with economies.

The cold chain involves the transportation of temperature sensitive products along a supply chain through thermal and refrigerated packaging methods to protect the integrity of these shipments.  There are several means in which cold chain products can be transported, including refrigerated trucks and railcars, refrigerated cargo ships as well as by air cargo. India’s integrated cold chain industry – a combination of surface storage and refrigerated transport. We have been widely recognized for the emphasis that we laid on the quality of people recruited on the quality of training and on the culture that we built.   Our costs are heavily optimised due to clever scheduling, reverse logistics and consolidation. However such costs are not at the expense of quality parameters in cold chain which is so very essential to human life. Besides we are not willing to take shortcuts and are digging in for the long term. Customers continue to find value in our service. We have invested in technology which was truly realtime, allowing seamless integration, and analytical tools for detailed messaging and analysis.  This has put us much ahead of the competition providing our people and customer an exposure to the best processes.

Q- What changes are you planning to make in the coming future?

A- A marketplace has been formed with NCEDX, wherein the farmer could get his produce, get this validated through a third party quality audit to ensure quality aspect. A farmers’ market will increase the connect points between farmers and consumers, thereby providing competition to retailers, middlemen and aggregators in the supply chain.  A system of this kind could revolutionize the agriculture sector thus changing the paradigm in supply chain in the food industry.  This will reverse the trend from a Buyers Market to a Sellers Market thus empowering the farmers. We follow a system that we have captioned as QH2S2EMC — Quality Hygiene Health Safety Security Environment Maintenance Community.  For instance, if we look at say mangoes that have a typical season of February to say June every year.  The Quality (produce) is the very basis of what everyone across the supply chain wants. A farmer looks for a good produce, a buyer looks for a freshness and in good quantity. Looking at Hygiene (Plucking) one has to be careful of the plucking methods and the Health (Ripening) aspect involves the way the fruit has ripened, while the Safety aspect brings in the way the fruit has been cleaned, packed and transported to retain the juiciness.  Security is the transaction between the Buyer and the seller on the produce, while the Environment will look at sustainability of the soil, plant and product.  Maintenance is the aspect where the farmer is updated on the technologies to update the farm and when one looks at community, one is referring to a smile across the supply chain. There are more than 300 million small and marginal farmers in India. More than 60 per cent of their livelihood is derived from small holdings. And everyone who analyses this sector and farmer clearly says that the survival of these small grower is crucial to the nation’s food security. Small farms are the most efficient food producer. To their survival means empowering them with the latest technology and practices so that this results in a better business proposition for everyone in the supply chain.  To cater to this market, we are one of the few players operating in Tier II & III towns in India that can offer temperature controlled loads as small as 500 kg, catering for India’s fresh Fruit and Vegetable (F&V), food processing industries. To cater to the growing e-commerce market, we are also enabling small delivery vans that can maintain 3 different temperature zones that will surely be a boost to the e-retailers across the nation.  This leads to enhanced efficiencies, optimized costs and a competitive advantage that translates into high impact return for food supply chains in India.

Q- Throw some light on the importance of technology in cold chain logistics. What are the latest technologies that you use?

A- The cold storage construction technology, the practices of thermal insulation, refrigeration plant technology, automation and material handling have undergone significant transformation. From the point of view of utilization also, the cold stores today offer much wider scope than in the past. With the advent of newer materials/ equipments, every part of a cold chain renders itself amenable for improvement. As a result type of construction, insulation, refrigeration equipment, type of controls – all of them are witnessing changes. In short the Cold Chain Industry is in the eye of a revolution. However it must be realized that for a country which is No.1 in terms of milk production and No.2 in terms of F&V production, the overall storage capacity of of cold storage available in the country cannot be considered adequate and there seems to be a good potential for the development of modern & energy efficient storage units. The cold chain industry is an emerging and fast growing business sector in India. Considering the current levels of fruits and vegetables wastage along with focus on food safety and security, cold chain facilities will play an important role in meeting the demand of food in the country. Development in the food processing sector and organized retail, government initiatives, increasing investments as well as increasing willingness on the part of consumers to pay a premium for higher quality of food products, will drive overall growth for the industry.

However, interventions are required to bring down operating costs, to improve quality of end produce, for adoption of new technology solutions and training of manpower. 

 Infrastructure development and spending will be the key for the booming e-commerce logistics which would require high investments from the companies so as to meet the ever increasing demands.