Archive for the ‘Supply Chain’ Category

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From Vaccines to Ice Cream: How Cold Chain Services Support the U.S. Economy

August 24, 2022

Francys Veras is an International Trade Specialist and Thibault Denamiel is an intern in the Office of Supply Chain, Professional and Business Services.

This post contains external links. Please review our external linking policy.

Gloved hands of a research scientist removes a cryotube from a liquid nitrogen cell bank. The vial contains samples of mouse stem cells that have been frozen in the cell bank.

Do you know how your fruits, meats, and vaccines are transported? The perishables in your local grocery store and the vaccines at the pharmacy all rely on cold chain services to get to you. Throughout the COVID-19 pandemic, the services provided by the cold chain logistics sector became particularly vital, as constant and verifiable temperature control during transportation and storage is required to maintain the potency and guarantee the efficacy of vaccines. In the United States alone, the cold chain sector has delivered over 750 million COVID-19 vaccine doses. Beyond vaccines, the cold chain sector has become increasingly vital to the global supply chain as a whole: it provides significant economic growth opportunities in both developed and developing nations. In the Commerce Department’s recently published Cold Chain Services Report, we provide an overview of the sector, present an update on the most prevalent cold chain challenges and developments, and highlight cold chain opportunities for U.S. businesses as they strive to refine their supply chain practices.

From Manufacturer to Consumer: The Cookies N’ Cream Journey

Before diving into the key findings of the report, let us first define cold chain logistics. The cold chain can be divided into three main categories: temperature-controlled storage, refrigerated transportation, and cold packaging methods. Let’s paint a picture: imagine a hot summer day – no AC and humidity is high. Buying an ice cream to cool down sounds like a good idea, but how did your favorite cookies n’ cream ice cream get to you? In order to maintain ice cream quality from the manufacturing plant to the consumer, the ice cream must be transported in a refrigerated truck – reefers – from the manufacturer to a refrigerated warehouse. From there, the ice cream will be delivered in reefers to retailers and finally stored in walk-in freezers before making it to the frozen aisle. Ice cream is but one product category that requires cold chain logistics. Now imagine all the other perishables and medicines that necessitate temperature-controlled services to move from start to finish – chilly!

Cold, Hard Facts: Recent Challenges and Developments

The report identifies several challenges facing the cold chain sector. Environmental sustainability issues, warehouse and labor shortages, and public health concerns all figure prominently. Despite technological advances, over 1 billion metric tons of global food waste are created per year, due primarily to a lack of proper facilities, inadequate food handling processes, and improper personnel training. In fact, it is estimated that each year the United States produces 170 million metric tons of carbon dioxide equivalent greenhouse gas (GHG) emissions as a result of food loss and waste. Increased investment in the cold chain industry, alongside more rigorous standards emphasized by the U.S. Food Safety Modernization Act, would help alleviate these losses and improve health and environmental outcomes.

Another significant sustainability issue concerning cold chain is the level of fossil fuels and refrigerant gases needed for cooling systems, which regulators in the United States and globally have been trying to address. For example, refrigerant gases are being phased down through international commitments like the Kigali Amendment to the Montreal Protocol and the recent passing of the American Innovation and Manufacturing Act (AIM), while the industry itself is updating outdated refrigeration equipment in order to become more energy efficient.

The strong growth of the cold chain has created challenges.  An increase in demand for cold chain services since the pandemic’s start, spurred by the growth of e-commerce, coupled with shipping delays throughout the supply chain, has pushed warehouses to capacity. In addition, the shortage of labor has led to an increased shift to automation. The dry container market has seen highly profitable rates during the pandemic, with refrigerated containers at times used to ship dry cargo, causing a shortage of reefer containers.

Keeping it Cool: Looking Beyond the Pandemic

Growth opportunities for U.S. cold chain businesses exist, ranging from adopting sustainable supply chain practices to exporting cutting edge services that will strengthen international cold chain systems. As a fundamental component of a sustainable and economically viable global supply chain, the cold chain sector must work to reduce its carbon footprint. The industry can accomplish this by updating refrigeration systems, utilizing state-of-the-art technologies to improve transparency, and producing reusable packaging solutions. The pandemic highlighted the need for reliable cold chain networks internationally. U.S. cold chain services providers can explore top markets and prepare competitive market entry strategies with help from ITA trade and commercial specialists.

To learn more about the recent challenges and developments facing the U.S. cold chain sector and how we can help you export your cold chain services abroad, contact our team.  

Posted in Industry and Analysis, Supply Chain | Comments Off on From Vaccines to Ice Cream: How Cold Chain Services Support the U.S. Economy

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Supply Chain Sustainability: An Opportunity for U.S. Businesses

July 29, 2022

This post contains external links. Please review our external linking policy.

Caroline Kaufman and Francys Veras are International Trade Specialists in the Office of Supply Chain, Professional & Business Services.

The Covid-19 pandemic exposed the vulnerabilities of global supply chains, making them a household matter for everyday Americans. Across the country, Americans have experienced shortages of essential products, such as toilet paper, disinfecting wipes, and bottled water, as well as long delays to receive products ranging from household furniture to exercise bikes. As images of empty store shelves and backlogged cargo ships in ports became commonplace, so did the call for stronger, more resilient U.S. supply chains.

For U.S. supply chains to be strong and resilient, they must also be sustainable. Each process in the supply chain, from procurement of sustainable raw materials to low-emission delivery of the product, can be assessed to mitigate its environmental impacts. Sustainable supply chains not only protect global value chains in periods of crisis like a pandemic, but they can also improve overall productivity and help businesses reduce waste. In addressing the climate crisis, stakeholders across the supply chain must recognize that dependence on fossil fuels for the majority of supply chain activity is not a long-term solution.

A pie chart depicting U.S. greenhouse gas (GHG) emissions by economic sector in 2020 with the transportation sector accounting for 27 percent of total emissions. The next source of GHG emissions is the electricity sector with 25 percent, followed by industry with 24 percent, commercial and residential with 13 percent, and agriculture with 11 percent. Source: U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions Since 1990-2020.
Figure 1: The pie chart depicts U.S. greenhouse gas (GHG) emissions by economic sector in 2020, with the transportation sector accounting for 27 percent of total emissions. Source: U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions Since 1990-2020. Most recent data was released in April 2022.

In 2020, the U.S. transportation sector accounted for the largest portion (27 percent) of total U.S. greenhouse gas (GHG) emissions. Freight transportation accounted for over one third of those emissions. With transportation services responsible for the movement of global trade, these supply chain services industries are increasingly critical to addressing not only the supply chain crisis, but also the climate crisis.

Moving the Needle Forward: Public and Private Sector Must Work Together

The Biden-Harris Administration has prioritized strengthening U.S. supply chains, as well as creating sustainable U.S. supply chains. In November 2021, Congress passed the Biden-Harris Administration’s Bipartisan Infrastructure Law, or the Infrastructure Investments and Jobs Act (IIJA), which invests $17 billion in modernizing infrastructure at coastal ports, inland ports, waterways, and land ports of entry.  

A graphic showing a cardboard airplane trailed by green leaves on a blue background.

The Administration has also worked closely with the private sector to set ambitious goals across the freight logistics industries, for example by announcing the Sustainable Aviation Fuel (SAF) Grand Challenge in September 2021. The SAF Grand Challenge seeks to inspire the domestic production of at least three billion gallons per year of SAF by 2030 and 35 billion gallons of SAF by 2050, enough to supply 100 percent of projected U.S. aviation fuel demand in 2050.

While government initiatives are part of the solution, supply chain sustainability initiatives must also be led by the private sector. Across the different freight transportation industries – including aviation, maritime, rail and truck – U.S. businesses have committed to creating both a more resilient and more sustainable domestic supply chain.

ITA’s Supply Chain Sustainability Efforts and New Report

To help identify where opportunities and challenges exist for U.S. supply chain businesses, ITA’s Office of Supply Chain, Professional and Business Services (OSCPBS) works to address policy and regulatory issues to ensure that the U.S. supply chain system will be among the world’s greenest and most sustainable in facilitating the movement of goods across the nation and abroad. We identify the latest U.S. industry developments in supply chain sustainability. Using that information, we support industry in reducing their carbon footprint and work to enhance the competitiveness of sustainable U.S. transportation and logistics services.

ITA’s OSCPBS recently published a Supply Chain Sustainability Report that examines related key trends, public and private sector initiatives for a more sustainable future across the major modes of freight transportation, and describes how the Biden-Harris Administration and industry have worked together to set ambitious goals to reduce emissions, an important groundwork for progress. It notes that fuel technologies are a key area for research and investment for U.S. freight companies, and it offers examples of ongoing developments. It also notes that while the private sector has been increasingly innovating to address climate change, there continues to be a great need for strong regulatory and market incentives to accelerate decarbonization in the freight sector.

Check out ITA’s Supply Chain Sustainability Report to learn more.

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