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Challenges the last mile services face when temperature control is required

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Last-mile delivery is the transportation of goods from a transport hub to the final delivery destination; its objective is to deliver items to the end-user as quickly as possible. Coupled with a cold chain, it transports frozen foods, beverages, vegetables, and greens through different distribution models: 

– Retail – from the warehouse to the point of sale.

– HORECA (Hotel/Restaurant/Catering) – from the warehouse to the hotel or restaurant.

– Consumer-generated by e-commerce purchases.

This type of supply chain has faced increasing demand in the wake of the pandemic, thanks to the rise of online ordering. The size of the global last-mile food delivery market is estimated to grow by 11.23% to reach a value of $9,348.24 million by 2027 (Market Research) (1).

Last-mile logistics involves transportation for the consumption of a product and currently presents challenges such as:

-Inflation: due to rising fuel and energy prices, which adds costs to last-mile deliveries in e-commerce or retail. 

-Temperature variations: during short or long transportation, the temperature can generate overheating or excessive freezing and alter the quality of the product. 

– Short shelf life: It is vital to reduce delivery times and ensure that the merchandise is not damaged during transportation.

Precise solutions

Frozen food consumption has accelerated dramatically, creating a global market demand for cold chains. Theefore, the cold chain industry is expected to grow by 4% by 2025 (INDUSTRY ARC) (2).   

At maxiaNET, we know that it is imperative not to break the cold chain when transporting food and beverage products, to preserve them during last mil delivery, so we do our best to guarantee it. Our processes use state-of-the-art technology to expedite product shipping, monitor temperature 24/7, maintain open communication with everyone involved in the chain and more. Our goal is to provide end consumers with high-quality products.

Tactical tips

The average consumer has evolved in recent years and demands better consumer services in retail. To preserve the cold chain in perishable products, it is possible to implement strategic solutions such as:

– Staff training, especially in the adoption of new technologies that facilitate refrigeration of food, beverages, or food supplements, to preserve them according to the manufacturer’s recommendations. 

– Easily accessible cold rooms in retail locations, where the consumer can access refrigerated products. 

– Place non-perishable products on dry shelves and temperature-controlled products on cold shelves.

Benefits of optimization

Companies that leverage cold chain and last-mile efficiencies by partnering with expert companies like maxiaNET will:

– Increase brand value by properly managing the product from the time it leaves the production line until the end of its life.

– Extend the shelf life of the product and preserve its organoleptic qualities.

– Prolong product life and avoid expired merchandise, which reduces profits.

– Availability throughout the year regardless of the season, which facilitates brand positioning.

Lurking risks

Potential hazards of not planning temperature-controlled last-mile delivery: 

– Drastic temperature changes can reduce the shelf life of a product, or even render it unusable; thus decreasing availability and hindering brand positioning.

– Complete loss of the product during transportation; this is recurrent in the case of frozen products, beer or wine, beverages with probiotics, vegetables, and greens.

Last-mile cold chain transportation costs are higher, but in the long run, they eliminate risk and mitigate product loss. It should be considered that, in the food and beverage sector, major delivery companies have experienced a 200% growth since 2020, which has lowered costs compared to previous years. (EY-US) (3).

A detailed analysis of consumers satisfied with last-mile services revealed that 74% intend to increase purchase levels by 12% and are willing to pay for higher delivery and more frequent purchases (Capgemini Research Institute) (4).

A well-executed last-mile cold chain strategy could drive business profitability and boost customer satisfaction. By 2024, demand for cold chain services within North America is forecasted to increase by up to 76%. (EY-Mexico) (5). 

The ideal scenario for a company that wants to grow and expand is to look for commercial allies that know how to navigate the current situation in the region and transport the products safely -such as maxiaNET- to carry out a joint distribution and reach the target market.

  1. Food Cold Chain Last Mile Delivery Market Research Report by Food Type (Bakery & Confectionary, Dairy & Frozen Dessert, and Fruits & Vegetables), Product Type, Temperature Type, Delivery Vehicle, Cooling Material, End User, Region (Americas, Asia-Pacific, 360iReserch – 04/06/2022. https://www.marketresearch.com/360iResearch-v4164/Food-Cold-Chain-Last-Mile-31189229/
  2. Cold Chain Market- Forecast (2022-2027). INDUSTRY ARC Analytic-Research-Consulting https://www.industryarc.com/Report/15477/cold-chain-market.html?
  3. How last-mile strategy could be your biggest competitive advantage. EY-US https://www.ey.com/en_us/strategy-transactions/supply-chain-last-mile-strategy
  1. The Last-Mile Delivery Challenge. Capgemini Research Institute.
    https://www.capgemini.com/us-en/news/the-last-mile-delivery-challenge/
  2. Panorama de la cadena de frío en México: retos y oportunidades. EY-México. https://www.ey.com/es_mx/consumer-products-retail/cadena-de-frio-en-mexico

 

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