MANAGING  

THE  “COOL  CHAIN”

A Cold Chain is only as Cool as its Warmest Link

Dr. Noel P. Greis

Director, Center for Logistics and Digital Strategy
Co-Driector, UNC-Tsinghua Center for Logistics and Enterprise Development
Kenan-Flagler Business School
University of North Carolina at Chapel Hill

December 2011

This case study was written with the support of the National Science Foundation (ATE #1003507).
SYNOPSIS

A cold chain is a supply chain in which the products moving across the supply chain are
maintained in an environment that is temperature-controlled from end-to-end. A cold chain is
only  as  strong  as  its  “warmest”  link.    Many  food  products  must  be  maintained  at  temperatures
between 2 and 8 degrees Centigrade to assure freshness and safety. As products move across
the food supply chain there are many opportunities for breaks that compromise this target
temperature range. For example, a perishable shipment may sit in the sun for extended
periods while waiting to be loaded into the cargo hold of an aircraft or ship. Increased delays
en-route can reduce available shelf life. Even small deviations from this temperature range can
seriously compromise shelf life and increase the rate of product deterioration.

In order to determine the vulnerabilities associated with cold chain operations between the
U.S. and China, the UNC-Tsinghua Center for Logistics and Enterprise Development, performed
a benchmark study of cold chain operations for a shipment of turkeys between the U.S. and
China. The benchmark study was designed to better understand some of the challenges that
shippers face when exporting perishable products from the U.S. to China. A number of
vulnerabilities in the cold chain affect the freshness and safety of food and other perishable
products. As we will see in the real world example in this case, vulnerabilities range from
administrative failures to control failures to regulatory failures.

COMPLEX COLD CHAINS

More and more food and drug products that move around the globe require temperature
control to maintain suitable freshness for human consumption and/or use. Many of these
products—such as food, pharmaceuticals and some chemicals—can be damaged or  “perish”  
when not kept within a specific temperature range. A number of recent food safety scares can
be attributed to failures of the cold chain.

Examples of cold chain products include perishable food imports such as fresh produce grown
in South America and seafood products exported from Asian countries like Thailand. Meat and
dairy products are another major cold chain category. Many pharmaceuticals and vaccines
must be maintained at constant temperatures to maintain viability and, thus, utility to patients
who depend on them for their lives and well-being. The pharmaceutical cold chain includes
other temperature-controlled products such as blood, cells and plasma, proteins, human
tissues, and laboratory or clinical kits.

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Unlike the U.S., many developing countries such as China do not have sufficient cold chain
infrastructure. This is especially critical for food since many of the products on our grocery
store shelves today have some ingredient that has been grown or processed in an emerging
market country. For example, according to consulting firm A.T. Kearney, existing cold storage
infrastructure in China is only seven million cubic meters compared with 88.8 million cubic
meters in the U.S. A. T. Keaney also estimated that in China, for example, only about 15% of
food products that should be temperature-controlled are actually handled in this way,
compared with 85% in Europe and North America.

The lack of a cold chain can result in increased perishability of food products and compromised
food safety—as well as considerable food waste. In many developing countries it has been
estimated that without adequate cold chain infrastructure, as much as 20% to 40% of
perishable food products deteriorate beyond usability before reaching their destination. For
example, China’s  perishable  freight  spoilage  is  nearly  33%  and  accounts  for  almost  USD  9  billion  
annually.

Providing a temperature-controlled environment is increasingly difficult because of the

increasing complexity of global supply chains and because of increased outsourcing of food and
drug production to countries with less well-developed cold chains. For example, shrimp from
Thailand destined for dinner tables in the U.S. travel first by boat to port where they are loaded
onto a truck for transport to the airport. Once on a plane, they travel across the ocean, often
stopping for multiple air legs. After arriving at their destination airport, the shrimp are
transferred to truck for distribution to local retail outlets.

As we will see in the next section, at each point along the cold chain there are critical
vulnerabilities  that  can  lead  to  “breaks” in the cold chain.

BENCHMARKING COLD CHAINS

A benchmarking experiment was performed by the UNC-Tsinghua Center for Logistics and
Enterprise Development in which a shipment of frozen turkeys was shipped from North
Carolina to Beijing, China. North Carolina ranks #2 in the production of turkeys nationally and
are a major export. The turkeys were to provide a centerpiece for a banquet at a well-known
Beijing Hotel to celebrate North Carolina products. Approximately 600 pounds of frozen
turkeys traveled by truck from the turkey processing plant in North Carolina to  Atlanta’s  
Hartsfield-Jackson International Airport where they were placed on an aircraft bound for Beijing
with a stop in Hong Kong. By tracking the movements of the shipment from origin to
destination it was possible to develop a framework for documenting and understanding the
weaknesses and constraints of cold chain management processes in China.

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The results of the benchmarking study are shown in Figure 1. Frozen turkeys should be kept at
a temperature below -25°C for optimum shelf life. As shown in Figure 1, the pre-frozen turkeys
left the processing plant inside a container that was maintained at an ambient temperature of
approximately -26°C. By the time the turkeys arrived at Atlanta to be loaded into an air cargo
container, the ambient temperature in the container had declined to -45°C. During the time
that the container waited to be loaded onto the aircraft, the temperature quickly rose
approximately 5 degrees. During the flight to Hong Kong, the container temperature continued
to rise, returning to a temperature of -26°C—still within the target temperature range.

Figure 1: Temperature Profile for Cold Chain Benchmark Experiment

Over the remainder of the journey, the temperature in the container continued to rise. While
waiting to be loaded onto another flight from Hong Kong to Beijing, the temperature rose
nearly 10 degrees. Arriving in Beijing, the temperature continued to rise nearly 20 degrees
above the acceptable temperature for frozen meat products. The temperature was lowered
approximately 10 degrees when the shipment arrived in Beijing. However, the temperature
continued its upward climb as the shipment remained unclaimed in the warehouse in Beijing.

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As the turkeys remained unclaimed for three days in the warehouse, the turkeys thawed
becoming unfit for consumption and had to be disposed. When the benchmarking experiment
ended, the shipment temperature exceeded 10°C.

IDENTIFYING COLD CHAIN VULNERABILITIES

This failure of the frozen turkey cold chain can be attributed to a number of individual failures,
as can be seen in Figure 2. These problems ranged from administrative failures to control
failures to regulatory failures. All are characteristic of the vulnerabilities that cold chain
shipments confront.

Control Failures. The first failure was one typical of many cold chains—a failure to control the
cold chain temperature during the transition between transport modes such as at an airport
when the container is moved from one plane to another, or from truck to plane. As is
commonly done, dry ice was placed in the container at the processing plant to cool the turkeys.
The dry ice caused the container temperature to continue to fall during shipment by truck from
North Carolina to the Atlanta airport. However, after arriving in Atlanta, the shipment was
removed from the refrigerated reefer and sat in ambient outdoor temperatures while waiting
to be placed in the aircraft hold. This resulted in a small rise in temperature. While in the air
en route from Atlanta to Hong Kong, the temperature continued to rise in the unrefrigerated
cargo hold of the aircraft.

Administrative Failures. Simple administrative failures, such as not following shipment

directions, can contribute to cold chain failure. After arriving in Hong Kong, and while waiting
to be placed on the continuing flight, we saw above that the container temperature rose. The
rapid rise in temperature was due to the fact that the dry ice had evaporated and not been
replaced in the container as previously specified in the shipment instructions. After the flight
left Hong Kong for Beijing, the temperature remained relatively stable. However, once in
Beijing, the temperature rise was due to the fact that the container was kept in an
unrefrigerated customs warehouse waiting for clearance. Upon request, dry ice was finally
replaced in the container.

Regulatory Failures. Unexpected regulatory barriers are another source of cold chain failure.
In this case, a series of regulatory snafus made it impossible to remove the shipment from
customs where it was stored in an unrefrigerated warehouse—and also impossible to
communicate a change in consignee. First, the freight forwarder in the U.S. did not know that
customs offices in China would be closed for three days because of a national holiday. Thus,
the shipment languished in the unrefrigerated warehouse unable to be claimed. Second,
because of the customs closure, it was impossible to communicate a change in shipment

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destination from the restaurant to a nearby hotel which had more refrigeration capacity to
keep the turkeys well chilled. Third, the freight forwarder that had been secured by the U.S.
freight forwarder did not have the appropriate license to release the shipment from Beijing
customs. And, fourth, the in Beijing could not pick up the shipment because the paper
documents had been misplaced in transit.

The combination of these problems resulted in a complete failure of the cold chain. In the end,
the turkeys remained unclaimed in the warehouse where they thawed completely. Unfit for
human consumption, arrangements had to be made for their disposal.

Figure 2: Failures of the Frozen Turkey Cold Chain

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EXERCISE: BUILDING A COLD CHAIN FOR ARGENTINE BEEF
In order to minimize the risks of a cold chain failure, it is important to anticipate potential
problems such as those revealed by the benchmarking study. In the exercise below, you have
the opportunity to plan a cold chain for Argentine beef to minimize potential vulnerabilities.

Argentine beef is extremely popular, both in the U.S. and Europe, due to its natural and unique
taste. This taste is attributed to the fact that the cattle are fed with highly nutritious natural
grass and in the open range where it develops free of additives and contaminants. This grass-
fed beef has been the centerpiece of Argentina's most famous dish, a slow-cooked asado on
the parilla. Beef can be exported chilled or frozen to the U.S. and Europe. Upscale restaurants
prefer chilled beef, which require a carefully controlled cold chain.

Think about suitable cold chain routes and schedules for a shipment of chilled AND frozen
Argentine beef, respectively, moving from the rendering plant in the pampas of Argentina to a
Brazilian restaurant in Chicago. In planning such a cold chain, things to consider include:

 Pre-Shipment Conditioning. Products should be conditioned to the desired

temperature before being loaded. Cold chain refrigeration technologies are designed to
keep a constant temperature in transit, but not to bring a shipment to the shipment
temperature. Other concerns include the weather conditions for the destination
location, especially if the shipment will be exposed to extreme cold or sun/heat en
route.
 Choice of Mode. The choice of mode (air, surface, ocean, etc) will have a big impact on
the management of the cold chain. Travel time between the origin and the final
destination (and any intermediary locations), the size and weight of the shipment, and
the required temperature environment all effect the choice of transport mode.
 Regulatory procedures. If the freight crosses international boundaries, customs and
other procedures must be considered since cold chain products tend to be time
sensitive and are more subject to inspection than regular freight (e.g. food,
pharmaceuticals, etc.). Depending on the country, the customs times may vary due to
variations in regulatory procedures and resulting delays.
 The Final Leg. The final leg in the shipment of a product direct to the customer is often
known  as  the  “last  mile.”    Typically  local  trucking  companies  manage  the  last  leg  and  
these companies often do not have adequate refrigeration capability, especially in
emerging  market  countries.    Shipments  are  often  very  vulnerable  during  the  “last  mile”  
and, as a result, efforts and expenses to control and monitor the cold chain upstream
can be wasted.

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For the above case of Argentine beef:

1. Diagram and specify a cold chain for both chilled and frozen beef products moving from
Argentina to Europe and the U.S., respectively. Specify the best modes of transport and
the estimated transit times, and consider any special packaging or handling
requirements. Discuss the differences for each cold chain.
2. Create possible temperature profiles for the beef in transit across the modes, noting
potential vulnerabilities and their impact on the temperature profile;
3. For each cold chain, identify and discuss the risk points and vulnerabilities along the
way; and
4. Discuss how you would minimize the risks of temperature deviations that would impact
the health and quality of the product.

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