From Cold to Cutting-Edge: How Will Technology Shape Singapore's Cold Chain Market?
singapore-cold-chain-market
June 07, 2023
From 2016 to 2021, Singapore cold chain market witnessed remarkable expansion fueled by the rising demand for processed foods and the emergence of opportunities in vaccine transport. But the journey doesn't stop there. Brace yourself for even greater growth as new and advanced technologies such as Warehouse Management Systems (WMS), automation, and the Internet of Things (IoT) make their mark on the Singaporean cold chain industry. Be at the forefront of this dynamic sector by delving deeper into the trends and opportunities that lie ahead.
Read more to uncover the future of Singapore's Cold Chain Market and seize the advantage.
1. Cold chain is a lucrative business in Singapore with high initial investment ensuring a constant return on a long-term basis
This phase was driven by the entry of new players with the increased demand for food and beverages
I: Emerging Phase <2002
- High average annual temperature of Singapore ranging from 23ºC to 33ºC resulted in high demand for low temperature control services.1
- Demand for cold storages increased as 90% of the food and beverages were imported from other countries.2
- Excellent sea-air cargo links and telecommunications infrastructure led to the emergence of international players.
- High maintenance and operating costs challenged the players from expanding the cold storages.
Currently market is driven by demand for Cold Transportation of Pharmaceuticals and food products
II: Growth Phase 2002- 2030
- Singapore is the hub for vaccines in the ASEAN region. The transportation of temperature- sensitive products increased during the pandemic.
- Singapore Cold Chain Centre establishes standards for cold chain management of a wide range of perishable products.
- SS 668 established in 2020 is a Singapore standard for cold chain management system of chilled and frozen food.3
- The occupancy rate of the available cold storage warehouses are very high.
Industry expected to reach maturity phase with stable growth and technological upgradations
III: Maturity Phase >2030
- Strategic location, reliable physical infrastructure, and excellent connectivity will make Singapore a major cold chain market.
- Demand for meat and sea food and vaccines would remain as essential factors for the cold chain establishments.
- Automation of cold storage facilities with ASRS technology and use of AI and IoT in the operations.
- Market will be stable after the progressive growth stage, leaving less scope for dynamic growth in the sector.
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2. Majority of the companies operate on manual semi- automated technologies and are yet to adopt the modern technologies present in other developed markets
- Thermal Container (Reefer) has insulated walls, doors, roof, and floor, which limits the range of temperature loss or gain.
- Insulated Container does not use any device for cooling and/or heating.
- Refrigerated Container uses dry ice or liquefied gases. It does not require external power supply or fuel supply.
Warehouse Management System (WMS)
- WMS is a software application that supports day-to-day operations in warehouses.
- It provides centralized management of tasks such as tracking inventory levels and stock locations.
- It also includes functionalities such as details of locations, rooms, racks, customers and several other important details constantly required by the management.
- Blast freezers rapidly freeze products at a temperature range of -30°C to -40°C.1
- They are used to store products such as meat and seafood, confectionaries and vegetables.
- Products are stored in blast freezers for 2-3 hours and then shifted to normal freezers or chillers.
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3. High operational costs, growing real estate cost, and food loss along the supply chain are some other major challenges that directly affect the cold chain market in Singapore
| Issues |
Description of the challenges pertaining in the Singapore Cold Chain Market |
High Operational Cost Associated with Cold Chains
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- Singapore is the most expensive country in Asia, with its monthly average operating costs of business being ~64% to 76% higher than other countries in the region.1
- Despite the high costs, Singapore is the top choice for companies with higher-value-added manufacturing with complex processes and automation requirements.
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Growing Real Estate Cost
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- Cold chain industry in Singapore is fragmented and require heavy investment in building technology enabled cold storages to cover entire value chain.
- Cooling units are not mobile units, hence, location becomes a key factor, and with a small land area of 733.1 sq. km in 2021, getting large tract of land to build a cold storage unit becomes a major constraint.2
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Food Loss along the supply chain
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- Around one-fifth of imported and locally-sourced produce in Singapore is lost along the food supply chain every year.
- Loss is equivalent to 393,000 tons of vegetables, fruits and seafood that get spoiled during storage and transportation.3
- It costs Singapore food producers and manufacturers SGD 3.4 Bn due to the fluctuations in temperatures and delays that shorten the shelf life of products.4
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4. But Cold chain industry is experiencing a new wave of technological developments which are essential for end users of cold storage services and for the organic growth companies
Technological Upgradations
- Investing in technology becomes essential to stay ahead in the market and offer the most effective service to the consumer.
- Advanced sensors and units give real-time data of product temperature, condition and location.
- This visibility allows operators to take immediate corrective measures in case of emergencies.
Employment of Data Analytics
- More cold supply chain companies in Singapore are beginning to adopt AI, ML and Big Data.
- With newer technologies like the Internet of things, companies can make their supply chains more transparent, bringing visibility and enhancing customer experience
RFID Technology
- RFID offers supply chain optimization facilities as each pallet/item is allocated a different ID.
- Location of tagged items can be tracked also saves on time, minimizes errors and reduces the need to open a container.
- Thus, it is responsible for keeping the products in the right place, at the right time and at the right temperature.
Thermal Storage Technology
- Cold chain operators are catering to the energy-intensive requirements of products while minimizing the pressure on natural resources.
- Players are offering thermal storage technology that is 100% fuel-free and environmentally friendly
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5. Further, Developments in supply chain operations and IoT- enabled temperature monitoring are advantageous to end users of cold storage services, and driving the growth of the sector
Automation in Cold storages through ASRS technology
- An Automated Storage And Retrieval System (ASRS) is a computer-controlled system for automatically depositing, inventorying and retrieving loads from defined storage locations.
- It is gaining popularity in Singapore as it allows inventory to be moved quickly, safely and precisely in a warehouse environment.
- YCH ware house in Jurong West has installed a fully automated Rack Clad ASRS and ramp-up integrated storage solution.
Developments in supply chain operations
- PSA Singapore has opened a new Tuas Port to provide well-linked supply chain and logistics ecosystem along the western seaboard of the country.
- Next Generation Port 2030 initiative focuses on making the Singapore port the largest integrated facility in the world.
- Introduction of new freighter operators in 2020 to Changi Airport has helped minimize supply chain disruptions by supporting the flow of essential goods.
Introduction of Centralized data platform or SGTraDex
- Singapore Trade Data Exchange (SGTraDex) is a common data platform introduced in 2020 to streamline information flows across a fragmented global supply chain.
- SGTraDex facilitates information exchange between proponents across the supply chain ecosystem in Singapore, providing "trusted, secure, and inclusive" access.
- It uses proprietary technology to plug gaps in supply chains.
Use of IoT-enabled temperature monitoring
- IoT-enabled temperature monitoring helps in monitoring of temperature and humidity at which goods are stored.
- Technologies such as Wireless Sensor Network (WSN) and RFID, an IoT-enabled Cold Chain Logistics system are used for real-time monitoring of products in containers at ports.
- IOT is increasingly used by food, pharma and health care cold chain companies to ensure product safety and integrity during global distribution.
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