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Posted by smithmorgan on August 20, 2024 at 8:17am 0 Comments 0 Likes
Posted by smithmorgan on August 20, 2024 at 8:16am 0 Comments 0 Likes
COVID-19 Impact on Cold Storage in the Semi-Conductors and Electronics Industry
ANALYSIS ON IMPACT OF COVID-19 ON COLD STORAGE MARKET
COVID-19 pandemic has influenced the whole planet with its major impacts on the economy and businesses across the globe. The COVID-19 spread worldwide in unprecedented ways due to its high infectious and contagious nature and lack of availability of its vaccine. As a result, the greatest medical challenge in the 21st century is yet to be faced by physicians worldwide. Though the emergence of the virus could be traced back to Asia, many European countries along with the U.S. have been struck massively by the pandemic. The virus has spread across all regions ranging from North America, Europe, Asia-Pacific, Middle East, and Africa up to South America. The COVID-19 has been declared as a pandemic by World Health Organization (WHO) due to its increased spread across the globe. After the declaration of the pandemic, various countries announced the complete lockdown, such as India, China, and other Asian countries, to decrease its spread. The economies have been affected adversely as most of the trade and economic activities came to a halt. The unemployment rate has grown due to the impact, and the global GDP fell down by -3.5%. According to the situation report of 7th June 2021 by WHO stated 174 million cases of the corona had been reported globally, and 3.7 million patients had died due to the coronavirus. On a slightly positive note, a total of 157 million people have recovered, and a total of 1.9 million vaccine doses have been administered as well.
Cold storage is a commercial facility for storing perishable products such as fruits, vegetables, meat, fish, among others, under controlled conditions for longer periods. For short and long-term storage, the product is cooled and stored at a temperature that is slightly above the freezing point. Depending upon the product, the storage temperature varies, and in general, it may lie anywhere between –2°C to 16°C. Short-term or temporary storage is usually associated with retail establishments such as supermarkets, where rapid turnover of the product is normally expected. Depending upon the product, the storage period may vary from 1 to 15 days. Long-term storage is usually associated with large-scale cold storage. The storage period again depends upon the type of product and also the condition of the product at which it is brought into the cold storage. This period may be as short as 7 to 10 days for sensitive products such as ripe tomatoes and as long as 6 to 8 months for products such as onions and potatoes. Using frozen storage, most of the food products can be stored for considerably longer periods, sometimes as high as a few years. However, certain fresh products such as tomatoes cannot be stored under frozen conditions. The storage temperatures for frozen foods typically lie between –23°C to –12°C, with –18°C being the most frequently employed storage temperature. The important application of cold storage is the storage of perishable items, which primarily consist of food and pharmaceutical goods. Food products being the primary need and pharmaceutical goods gaining demand in the pandemic, this market has not been affected greatly in the pandemic.
IMPACT ON DEMAND AND SUPPLY
The cold storage facilities are used for the storage of fruits, vegetables, perishables, storage of bulk drugs, and vaccines. The demand for food is rising due to a growing global population, especially in emerging countries. Extreme weather brought about by climate change is negatively impacting natural ecosystems and land suited for cultivation while also causing natural disasters. Against such a backdrop, infrastructure linking production, transportation, and consumption will be indispensable for providing a stable supply of food to various regions in the future in which cold storage plays an important role. Due to the application of cold storage in pharmaceutical and food conservation, the demand for it has not gone down. However, due to the application of vaccine storage, the demand has increased.
For instance,
• As of December 2020, the Indian government prepares for a mega COVID-19 vaccination drive in the coming months. The Ministry of Health and Family Welfare today informed about the government's plan for cold storage chains for the COVID-19 vaccine. The health ministry's Secretary Rajesh Bhushan said that 29,000 cold chain points, 240 walk-in coolers, 70 walk-in freezers, 45,000 ice-lined refrigerators, 41,000 deep freezers, and 300 solar refrigerators would be used for the COVID-19 vaccine storage
• As of December 2020, the Pfizer jab requires long-term storage at -70°C, while Moderna's must be kept at -20 °C long term. (Both can last for shorter periods in a regular refrigerator, where temperatures are between 2°C and 8°C.) The Oxford/AstraZeneca vaccine could be stored and transported long term at regular fridge temperatures. In any scenario, rolling out COVID-19 vaccines on a global scale will require an enormous expansion in the capacity of the global cold chain, the linked system of infrastructure that allows a product to move from its site of production to its final destination while remaining appropriately chilled
• In July 2021, Japan provided USD 9.3 million worth of cold chain equipment and related assistance to India to ensure vaccines against coronavirus reach all and boost the country's fight against the COVID-19 pandemic. This grant would provide India with cold chain equipment (CCE), including cold-storage facilities, to ensure vaccines reach all the populace
IMPACT ON PRICE
According to the survey by GCCA, the major challenges faced by the businesses were effectively screening employees, extra/open capacity, closure of non-essential businesses and facilities, workforce shortages, managing fear of contracting COVID-19, not enough capacity, employees following safety protocols, government restrictions, access to cleaning supplies, access to personal protective equipment, supply chain disruptions (keeping up with demand surge, slowdowns in food service, production/manufacturing challenges) and others.
Anticipated business operations and revenue projections have changed due to the pandemic. When asked about actual Q1/Q2 revenue versus Q1/Q2 pre-crisis revenue expectations, 54% of all respondents reported some decrease, 11% saw no change, and 35% reported an increase in revenue. In addition to impacts on revenues, the costs of doing business have changed due to COVID-19. Approximately 80% of respondents indicated an increase in costs, with the most common uptick of costs between 1-5% increases.
STRATEGIC INITIATIVES TAKEN BY MANUFACTURERS
The COVID-19 has largely affected the handling of cold storage, which was done previously with the use of forklifts and traditional material handling equipment which is not the most preferred way in the pandemic. The demand for the faster delivery of goods and the variety of goods to be stored has also gone up in recent years. E-commerce and direct-to-consumer are now major channels of demand. The mainstream acceptance and consumer demand for same-day and two-day delivery by giants, such as Amazon, Walmart, and Target, brought to the forefront an expectation for instant gratification – an expectation that accelerates all aspects of the food supply chain to accommodate expedited delivery. The solution to this is the automation of the material handling systems which were carried out to account for the increase in demand.
For instance,
• In July 2021, LINEAGE LOGISTICS HOLDING, LLC, a large regional distribution centre for several customers, the Allentown, Pennsylvania, facility moves approximately 200 trucks of product in and out daily, encompassing nearly 4 million pounds per day. As vendors have added more choices/SKUs to their offerings and consumers have become more specific in their orders, growth in order variability has significantly increased the amount of case picking or partial pallets needed to fulfil orders. To alleviate the stress of this new demand, LINEAGE LOGISTICS HOLDING, LLC is implementing automation in high-throughput areas of the warehouse. They are installing a layer picker machine and multiple automated guided vehicles (AGVs) to reduce the amount of labour utilized in the case picking function
CONCLUSION
Pandemic has taken a toll on every aspect of life, including the global economy. With the significant downfalls in many sectors, a collaborative effort of government, industry players, and consumers can win the fight against COVID-19.
The cold storage market has seen a rise in demand for the services as essential goods and pharmaceutical products have seen a rise in demand. But the major challenge is the demand and supply chain management as the supply chain is disrupted due to the restrictions. The mass handling of goods has been difficult due to the worker's protection and maintaining safety protocols. This compelled many cold storages to implement automated material handling systems. The rise in demand is a positive trend, but as not all cold storages are capable of handling the high demand, they are struggling to cope up with it. Governments are investing in cold storage and supply chains to improve the infrastructure, giving it a positive boost. Overall the market is seeing a positive trend and will grow in the upcoming years.
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