Restructuring the cold-chain: AI and IoT are driving disruptions in the logistics market
A decade ago, AI, IoT and data analytics were mere buzzwords that businesses were trying to make sense of. The post-pandemic disruptions and quick pivots in business models have brought these concepts to the front and center — not only for businesses in mature economies but for those in major powers and growing economies like India. In a geographically vast country like India, the lightning fast digitalization requires a well-oiled logistics sector. In an interview, Swarup Bose, Founder and CEO of Celcius, a leading aggregator of cold-chain logistics, speaks about how and the maturity of AI and IoT technologies are empowering businesses to innovate and bridge gaps to create a well-structured cold chain in the country.
- What role does AI, IoT & technology in logistics sector and how it benefits your Clients?
Conventionally, the cold chain industry was not accustomed to employing technology in their operations, leading to mishaps on the road and storage facilities. Technology has come a long way in eliminating these errors. Technology combats unforeseen circumstances enroute, allows entities to monitor shipments, track the vehicle during transit, and store data seamlessly. Technology opened the gateway to transparency, interconnectedness and better integration between suppliers and transporters.
IoT devices and thermal imaging/thermal sensing technology makes it easier to monitor temperature stability while shipping and storage.Celcius deploys IoT-based Temperature Measurement Devices (TMD), Door sensors, temperature sensors and GPS devices to track and monitor the products in transit. These devices send constant alerts and updates if the temperature changes, making it easy to identify and deal with any issues. We also use PCM (phase change material) to insulate the products as it is extremely efficient at absorbing heat from the environment to maintain the optimal temperature of the products.
Even when the products are in storage warehouses, we ensure that each storage unit has a temperature sensor that is linked to an AI and IoT-based device, monitoring the temperature of the product.
Dairy industry requires expensive refrigerated vehicles that can keep the products fresh. The operational and transportational processes also have to be carried out swiftly, as any time lost in the process can cause the products to lose their vitality.
For instance, one of our clients from the dairy industry had been incurring increased transportation costs to haul dry cargo and reefer cargo from their distribution points to the manufacturing unit. However, as vehicles were scarce, they spent a lot more time loading and unloading the available reefer vehicles, leading to operational losses. Since they began using our route optimization algorithm, they were able to procure smaller vehicles for the return of crates and dry cargo. The bigger reefer vehicles were used to return the loads back to the manufacturing point.
- How is tech integration enabling vaccine cold chain in the country?
The ongoing vaccine drive in India is of a colossal scale. As per the latest data provided by the government, nearly 10.6% of the adults in India have been vaccinated. However, we still have a long way to go to meet the vaccine requirements of the country. The existing success rate of the vaccine drive has been made possible with the integration of technology with the cold chain industry processes. Traditionally, the cold chain industry was very fragmented due to the lack of collaboration between transporters, shippers and suppliers. There were also several hurdles when it came to monitoring the shipment, tracking the vehicle during transit and keeping a record of all the data to refer to when required. Integration of technology has helped streamline the entire process from start to finish. Technology provides transparency and traceability while also making it facile for the transporters and suppliers to collaborate and keep track of the vaccine shipments. This way, the amount of waste generated is minimal and each dose of vaccine is accounted for. This is crucial in ensuring the efficiency of the vaccine drive.
- How is technology solving some of the issues faced in distributing vaccines issues?
Traditionally, the cold chain industry lacked integration, and it was ridden with issues around monitoring and tracking. Switching over to technology that is better equipped in solving these issues is crucial to run a seamless cold chain network. In order to aggregate the various cold chain entities like shippers, transporters and manufacturers, it helps to have a platform where they could collaborate as per their needs. Maintaining the temperature on road is something that Celcius deals with by employing PCM (Phase Change Material) as it can absorb large amounts of heat and keep the vaccine vials cold in the process. IoT devices and thermal sensors, on the other hand, can help when dealing with monitoring issues while GPS sensors can make tracking of the vehicles seamless.
- How can the cold chain industry streamline its services to accommodate for the lack of cold chain infrastructure?
The Indian cold chain market requires around 1.5 to 2 lakh reefer trucks to meet the demand but there are currently around 50,000 reefer trucks. The recent advancements in the industry is expected to narrow the gap, however, it is crucial that we double-down on the existing infrastructure and utilise it to the best of our ability. India requires an interconnected cold chain system, ensuring all the cities and rural areas have access to basic cold chain products like pharmaceutical drugs, vaccines, and perishable consumables like fruits, vegetables, and meat. This network will empower smaller transporters and warehouse owners to reach out to bigger cold chain manufacturers and work with them, thereby increasing their visibility. Celcius is striving to build such a network to tackle the disintegration within the industry and to build alliances between cold chain enterprises.
- How has the Indian cold chain market evolved since the beginning of the pandemic up until the tail-end of 2021?
The Indian cold chain industry reached the value of INR 1425.49 Billion in 2020 and the global cold chain market is predicted to reach USD 628.26 billion by 2028. This exponential growth of the sector, coupled with the rise in the supply chain startup economy, has enabled the industry to meet the growing demands for its services at a faster rate as compared to 2020. The cold chain industry has widely adopted cold supply chain technology like AI-enabled data collection, IoT-based temperature control units, ML-based warehouse and transport management, thermal sensors and batteries, interconnected tracking systems and more. These advancements are nudging the cold chain industry towards the future of optimal and functional growth.
- Brief us about your business outlook for the next 2 years.
Since our launch in November 2020, we have on-boarded 3500 vehicles, 107 cold storage facilities, increased operations in over 300 cities, and exhibited over 20 times the initial predicted growth. We have also tied up with finance institutions like Shriram Transport and Finance Company and with OEMs like Ashok Leyland and Tata.
Our plan is to grow and cover over 500 cities in the next three years while creating India’s largest delivery network. The services we offer will cover everything from primary movement to last mile distribution, thereby providing a complete cold chain solution. Our software operations too, are set to evolve from transaction-based to completely integrated TMS (Transportation Management System) and WMS (Warehouse Management System). This change will further help us create a holistic end-to-end supply chain solution for the cold chain network.
We plan to expand our workforce across the tech, sales and operations department and work on development programmes to aid small-scale and regional transporters across the country.
