Worldwide, there is a growing demand for healthier food options, and that means more fresh food than ever before. This is compounded by the recent growth of direct-to-consumer groceries. Unlike dried and canned options, fresh food often requires cold storage solutions from the moment it leaves the field to moments before it is consumed. The whole situation has created a squeeze on cold chain solutions, and it’s likely your business is getting stuck in the middle. What can you be doing to alleviate it?
If you’re feeling squeezed by the availability of cold storage for your business, one of the best ways to alleviate it is by utilizing crossdocking. This is a practice in which you plan your distribution and inbound shipments for the same time, bypassing the warehouse with it. In order to pull it off, you’re going to need good and reliable relationships with your suppliers, manufacturers and distribution outlets. But if you are in a position to make it work, not only can it alleviate your storage situation, crossdocking can save you big by eliminating the need for storage.
Be Aware of New Space Before It Drops
If you know that you have a big growth goal for the year and that’s going to require growth of your cold chain, it’s important to get out in front of new space even before it is available. With cold storage at such a premium, more warehouses are going up all the time. What you may not realize, however, is that 50-80% of this storage space is accounted for before the warehouse is ever completed, and the rest will go quickly.
Cold storage warehouses will begin signing contracts with new customers after their first announcement, and in some cases, these contracts are what make it possible to complete the build in an expedited manner. If this is something your business is interested in, we may be able to help you.
Work with 3PLs that Care for their Employees
The cold storage shortage isn’t something that we expect to even out soon. In fact, we kind of hope it doesn’t because fresh food is one of the first things that can improve lives every day and create healthier conditions. But there are situations in the logistics industry that can have a compounding impact on space shortage. For now, one of the biggest factors is the warehouse labor shortage.
You want to be working with a supply chain partner who is taking good care of their workers because if they don’t, there’s competition who is willing to right now. You don’t want a large shift in who is working at your warehouse because that could further slow timelines and space availability, causing supply chains to stall. So, it’s a good idea to take time to assess how their employees are treated. If a warehouse is stepping up to the plate to take care of their workers during this shortage, it’s likely they have the flexibility and team needed to weather other storms in the future.
Know Your ABCs
All of the above strategies are available to businesses as cold storage becomes more scarce, but the reality is that not all businesses are going to have the relationships, flexibility, and capital to make them work in the timeline they need them. This is when it’s great to fall back on inventory management basics.
Knowing the ABC priorities that give you a clear picture of the bread and butter for your business can allow you to scale back production on less valuable SKUs temporarily should cold storage space become an issue. This was a strategy implemented by many brands at the beginning of quarantine, and oftentimes they found themselves more profitable for it. Having a supply chain contingency built upon these kinds of strategies can help you move quickly in a crisis or when you want to simplify your business.
Cold storage is at a premium these days, but there are options available to businesses that are ready to get creative. If you’re looking for more space in 2022 or want an idea of other options available to your business right away, reach out to our team of supply chain experts today.