Cold Chain Logistics- New Opportunities Ahead
In Covid-19, we are witnessing a one in-a-lifetime event. It is therefore natural that this pandemic is forcing all entities – organizations and individuals to change the way they work and live. At SensiWise, we focus on bringing visibility, assurance and traceability to specialized supply-chain logistics. Our target market has been the brands and logistics service providers involved in storage and/or movement of products that require specialized handling during their supply-chain journey. A good example would be the Cold-chain that deals with supply-chain of temperature sensitive products.
In the past six months, the Cold-chain logistics industry has seen a sizeable reduction in demand both on account of the slowdown in economic activity, lower footfalls in retail stores and also due to the psychological hesitation of consumers in consuming frozen/chilled food products. Making matters worse was the shortage of drivers due to labour migration and also an increase in logistics cost, due to increased taxation on fuel prices.
However, difficult times like these, also present a unique opportunity to the Industry to transform. It challenges the status-quo and facilitates transformation and innovation. In the last few months, we have seen numerous examples of this in all walks of life. For our Industry, we have seen strengthening of a few secular trends like:
· Acceleration of Direct to Consumer – Now every consumer brand is looking at ways of directly engaging with their customers
· Quality and Hygiene of products has become a strategic imperative
· Increased focus on Digitalization and automation
So even in these tough times, we are seeing rays of opportunity. These will get further strengthened as the economic activity gathers full steam in the next six months. The reason for this optimism stems from the following:
1) Cold-chain logistics requirement in the pharma sector is going to see a huge upsurge. Given that Covid-19 diagnostic samples have to be handled in Cold-chain, and just in India we are testing over a million people every day, the need is obvious. Once we have vaccine candidates ready to be distributed, they will further add to the need for Cold-chain logistics
2) Transparency, assurance and traceability of product quality has suddenly acquired a new meaning. While in the past, customers were willing to go on the basis of trust, the pandemic has forced brands to transparently share information that influences product quality, safety and effectiveness. We see this trend further strengthening in the years ahead.
3) In the economic stimulus package announced by the Government to tackle Covid-19 related slowdown, there has been a huge focus and layout on setting up infrastructure at the farm gate and at aggregation points. A fund of Rs 1 Lakh crore will be available to strengthen the Cold-chain and post-harvest infrastructure in the country. This will not only help the farmers and the food processing sector, but will also help all the stakeholders involved in the supply-chain logistics.
We believe that the darkest days associated with the pandemic are behind us. As a startup, we are prioritizing our expenses to ensure that our revenues and outflow are as much aligned as possible. We are also getting prepared to leverage the new opportunities that the transformative trends mentioned above would make available to us.