Challenges and Strategies for the Development of Cold chain air freight in China

With the sustained and rapid development of China’s national economy, the market share of pharmaceuticals and fresh food e-commerce has rapidly expanded, forming a huge market for air freight cold chain logistics. For logistics companies in China, Cold chain air freight logistics is a new growth point in air freight logistics. Compared with traditional land and sea freight logistics, air freight cold chain logistics have higher timeliness and can provide logistics companies with higher profits. However, in the actual industry development process, the development of air freight cold chain logistics in China still faces some problems due to insufficient hardware and equipment facilities. This article mainly analyzes the problems existing in the development of air freight cold chain logistics and proposes specific improvement strategies.

 

I. Characteristics of China’s Cold chain air freight logistics Compared with the ordinary logistics industry, the air freight cold chain logistics industry has the following characteristics:

 

1. Fast transportation and strong market demand.

 

Cold chain air freight logistics mainly transport temperature-sensitive goods to their destinations by airplane.The transportation efficiency of airplanes is much higher than that of land transportation vehicles such as trains and trucks, so fast air freight cold chain logistics is highly advantageous. With the continuous improvement of people’s living standards, consumers’ demand for temperature-sensitive goods such as fresh and perishable goods, biological products, and pharmaceuticals is increasing, so air freight cold chain logistics has huge market potential.

 

2. High cost, high profit, and high risk.

 

Cold chain air freight logistics have higher performance requirements for hardware equipment and facilities, so a large amount of capital is required for hardware construction in the early stage. However, temperature-sensitive goods have higher added value, and coupled with the support of a huge market, it brings higher profits to air freight cold chain logistics. However, there are multiple stakeholders in air freight cold chain logistics, and significant “breakage risks” result in high transportation risks.

 

Diversified participating entities and complex value chain linkages. The participating entities in the cold chain air freight logistics system include airlines, airports, freight forwarding agents, customs, inspection and quarantine units, ground transportation organizations, etc. Logistics companies must have high-level information coordination and management skills to ensure that each link is closely connected.

 

 

II. Major problems in the development of cold chain air freight logistics:

 

1. Insufficient infrastructure and equipment for cold chain air freight logistics

 

Cold chain air freight logistics includes multiple links, such as cold chain ground transportation, cold chain air transportation, cold chain warehousing, and cold chain packaging. All links must be seamlessly connected to ensure the quality of transported goods and meet customer requirements. However, the temperature control and detection equipment in China’s current cold chain logistics mainly uses passive refrigeration equipment, and the application of active refrigeration temperature control equipment is not widespread enough.

 

In addition, the number of refrigerated trucks and cold chain warehousing areas is also far from enough. The lack of infrastructure and equipment leads to “breakage” issues in air freight cold chain logistics. For example, during the security check process, goods may be exposed to normal-temperature air. Although many logistics companies can recognize the high market demand and profitability of air freight cold chain logistics, the higher risks also lead to enterprises developing land-based cold chain businesses first, and developing air freight cold chain logistics facilities and equipment later when the timing is appropriate. This conservative approach also leads to relatively few companies investing in air freight cold chain logistics facilities and equipment.

 

2. Process issues in cold chain air freight logistics.

 

Currently, the basic process of most cold chain air freight logistics in China includes three links: goods collection, air transportation, and distribution. The goods collection process includes customer orders, customer order review, production of delivery orders, issuing tasks, arrival at the airport cargo terminal for cargo inspection, signing of the cargo receipt, and finally storing the goods in the airport temporary storage area awaiting sorting. In the goods collection process, customer service personnel need to enter the details of each delivery order into a system template, including pickup address, product name, order date, customer name, product information, special information, etc.

 

The workload is repetitive and cumbersome, leading to low work efficiency. In the task issuance link, pre-cooling of the vehicle takes 10-15 minutes, which occupies too much time and affects work efficiency. Upon arrival at the cargo yard, since many goods arrive at the airport at the same time, the receiving and inspection of goods cannot be performed immediately, increasing time costs and compromising the safety of receiving and inspection. During air transportation, goods need to be rechecked, inspected, packed, and loaded according to the shipper’s requirements. Ground operation personnel need to manually check the content of the goods after loading is completed, which undoubtedly increases time costs and easily leads to errors. In the process from inspection to loading, goods need to wait on the apron for about 30 minutes, which increases the damage rate of goods due to the long waiting time.

 

3. Low efficiency of information transmission Compared with the rapid digital development of the aviation passenger transportation business, the digital development of air cargo transportation is relatively slow.

 

Currently, many links in cold chain air freight logistics still use paper documents, and many customer requirements cannot be presented in a digital form, such as transparent pricing and transportation tracking. As paper documents are the main method of information exchange, data errors are easy to occur, thereby affecting the efficiency of the entire logistics process. cold chain air freight logistics has a very complex ecosystem, and the value chain includes consignors, carriers, customs, freight forwarding agents, airlines, end customers, etc. Enterprises do not have a unified management platform, resulting in various stakeholders acting independently, forming multiple information islands. The direct impact is that logistics information needs to be entered repeatedly, which affects logistics efficiency.

 

4. Incomplete policy and regulations, lack of industry supervision Currently, China has not yet formed a unified set of cold chain logistics management regulations, only some local policies and laws exist, and there are problems

 

III. Strategies for promoting the development of air cargo cold chain logistics To address the existing problems in the development of air cargo cold chain logistics, it is recommended to make improvements in the following areas:

 

cold chain air freight

 

1. Strengthen the infrastructure construction of air cargo cold chain logistics.

 

Most of the high-value temperature-sensitive products transported by air cargo cold chain logistics require that the cargo meets the temperature requirements during both the air transportation and ground distribution stages. Therefore, air cargo cold chain logistics requires higher demands for logistics hardware and facilities. First, accelerate the technological upgrading of air cargo cold chain logistics to ensure hardware compatibility. Introduce POS technology, EDI technology, GPS technology, etc. to achieve the integrated development of information in air cargo cold chain logistics and achieve full control throughout the entire process. Introduce RFID technology, which differs from specialized barcode recognition requiring close contact. RFID does not require close contact identification; the identification card can move up to 200 km per hour. It has a large storage capacity for internal coding and can individually track and manage each piece of cargo. It is highly adaptable to various links and has a higher level of intelligence. Introducing RFID technology in air cargo cold chain logistics can greatly improve cargo verification efficiency and reduce time costs.

 

In addition, since air cargo cold chain logistics involves multiple stakeholders, it is necessary to establish an open and unified air cargo cold chain logistics information platform. Through this platform, various departments and institutions can quickly and accurately retrieve information related to various types of cargo, optimize the flow of electronic information, strengthen the security supervision of cargo transportation information, and reduce duplicate recording of cargo information.

 
2. Strengthen industry regulation and improve relevant policies and regulations.

 

First, strengthen industry regulation and implement a certification system throughout the various stages of air cargo cold chain logistics to continuously improve the level of industry regulation and ensure accountability. The main certification includes the certification of air cargo cold chain logistics freight forwarding qualification, the establishment of freight forwarding credit rating, the creation of a revocation mechanism for agent qualifications, and the certification of container manufacturer qualifications. All air cargo freight forwarding companies that require air cargo cold chain transportation products are required to hold a certificate and improve the certification of air freight forwarding qualifications. Relevant personnel, departments, and enterprises must undergo specialized training and participate in industry association assessments and evaluations before obtaining relevant qualification certificates. The validity of the cargo freight forwarding qualification certificate is limited to ensure that appropriate parties undergo regular retraining and assessment to maintain their professional level. The air cargo freight forwarding qualification certificate needs to be applied for an extension in advance; otherwise, it will be considered invalid. If the qualification certificate is revoked, it must be reissued, or else it cannot engage in air cargo freight forwarding business for temperature-sensitive goods. Container manufacturers must allocate professional personnel and technical forces to use containers correctly according to the industry association’s qualification certification review criteria to ensure the quality of temperature-sensitive goods.

 

In addition, government departments need to promulgate relevant laws, regulations, and policies as soon as possible to provide legal support for the air cargo cold chain logistics industry, establish relevant supervisory and management agencies to supervise and control the entire process of air cargo cold chain logistics, and avoid violations at various stages. Strengthen policy support for the air cargo cold chain logistics industry, and for small-scale air cargo logistics enterprises, provide certain financial support to reduce their financial pressure and to prevent large-scale enterprises from monopolizing the industry due to rapid development.

 
3. Optimizing the Process of Aviation Cold Chain Logistics.

 

Firstly, information technology devices such as RFID should be used in the cargo receiving and shipping stage to improve cargo verification efficiency and reduce labor costs.

 

A specialized logistics operation platform should be established, eliminating the temporary storage process to reduce waiting times for cold chain goods and the time they are exposed to ambient temperatures. To reduce cargo damage, a specialized cold chain logistics operation platform should be established, separate from the general cargo receiving and verification area. A professional cold chain logistics operation center should be planned according to the company’s actual business situation, including an inbound inspection area, cold storage, packaging material storage area, cargo buffer zone, outbound packaging area, and non-conforming product storage area. They should all be managed in a unified manner in accordance with the cold chain logistics approach. The manual waybill process should be eliminated in the cargo receiving and verification stage, and the cargo information collection system should be utilized instead. Electronic billboards should be set up in specific areas to prevent dense cargo receiving and verification during the same time period and to reduce waiting times.

 

Secondly, the air freight transportation stage should be optimized.

 

A dedicated cold chain logistics channel should be established to reduce cold chain goods waiting times for security checks and to avoid long exposure to ambient temperatures. After goods are taken out of storage, timely security checks, packaging, and boarding are required, and security checks should also be carried out in temperature-controlled environments. The “packaging before warehousing” approach can be adopted, where products are packaged in advance upon receipt, directly stored, categorized by type, packaging mode, and warehousing time, and uniformly stored and managed to reduce temperature consumption. Waiting periods on the apron should be eliminated, and a booking management process should be established. The booking management process refers to the establishment of a dedicated cabin management standard that allows cold chain goods to be loaded into specialized cabins first to avoid mixed management with general cargo and seamless operations to ensure cargo quality and reduce loss.

 

Finally, the distribution stage should be optimized.

 

The same RFID technology mentioned earlier should be introduced to reduce the time cost of cargo verification. The current process mainly involves on-site inspections and verifications, greatly increasing the time cost, whereas introducing RFID technology can eliminate the manual cargo verification process and improve logistics efficiency.

 

IV.Conclusion

 

Loongle believes that although there are still many problems in developing China’s air freight cold chain logistics, China’s air freight cold chain logistics has a bright market prospect. In the future, all market participants including Chinese freight forwarders need to optimize the process of aviation cold chain logistics, strengthen infrastructure construction, and improve relevant policies and regulations, so as to promote the development of the air freight cold chain logistics industry towards a more perfect direction.

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