Cold chain services are crucial to global trade in perishable products and facilitate U.S. exports and imports of crucial agricultural commodities and healthcare products. Cold chain management has been an important part of global transportation and logistics for decades, with steady improvements in technology for HVAC equipment, refrigerated containers, and cold storage warehouse design. The COVID-19 pandemic demonstrated the critical importance of cold chain services to a broader audience, including governments around the world. Since the pandemic, the United States has seen sustained investment in cold chain services to catch up with demand for pharmaceuticals and refrigerated and frozen food and beverages. The United States has a competitive advantage in cold chain services due to the scale and innovation of our agricultural, retail, and pharmaceutical industries.
U.S. imports of cold chain-dependent food and pharmaceuticals amount to roughly $228 billion a year while U.S. exports amount to $111 billion a year. Cold chain-dependent pharmaceuticals and food have seen increased demand since 2020, reflected in steady growth of U.S. imports and exports of cold chain dependent goods.
Food Loss and Waste
Each year, billions of tons of fresh food products and millions of dollars’ worth of U.S. exports are lost due to poor cold chain systems in developing markets. Global losses in the food industry total more than $750 billion annually. These losses primarily result from lack of proper facilities, improper food safety handling procedures, and insufficient training for those personnel working in the cold chain.
SCS engages in multinational fora like APEC to drive attention and identify solutions to food loss and waste and to support market access for U.S. cold chain services providers.
Energy Costs and Environmental Compliance
Cold storage is highly energy intensive, with electricity costs accounting for 18% of a facility’s operating costs. The industry as a whole spends over $30 billion a year on energy costs. Greenfield projects have sought to reduce the energy costs of cold storage by installing rooftop solar panels and micro-grid solutions.
Cold chain services also need to comply with environmental regulations around the proper use of refrigeration chemicals. The United States has signed the Kigali Amendment to the Montreal Protocols on Substances that Deplete the Ozone Layer, which calls on developed countries to substantially reduce the use of Hydrofluoro Carbons (HFCs) by 2036, a refrigeration chemical commonly used in cold storage. Cold chain services companies also face compliance requirements issues around their use of Per- and Polyfluoroalkyl substances, known as PFAs.
SCS monitors environmental regulations domestically and with our trade partners, seeking to help U.S. cold chain services companies stay informed and to reduce technical barriers to trade.
Labor Shortages and Workforce Development
Many cold chain service providers report labor shortages and difficulties filling positions both in warehouse operations and management. These labor shortages are the result of a tight labor market and competition from e-commerce fulfilment centers, which operate in ambient temperatures.
SCS works to keep the interagency informed of workforce development issues in the supply chain sector, including cold chain services.
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