Cold-chain delivery becomes a bottleneck for the development of fresh-food e-commerce
Cutting costs is one of the important tasks of supply-side structural reform. The Central Economic Work Conference held at the end of last year called for helping enterprises reduce costs. It explicitly stated that "logistics costs must be reduced and reform of the circulation system advanced." Insufficient cold-chain facilities and excessively high costs are one of the weak links in China's logistics system, restricting the healthy development of industries such as fresh-food e-commerce. At present, China urgently needs to reduce cold-chain logistics costs by improving relevant supporting facilities and policies.
Chen Jianfeng was pleasantly surprised to find that he could buy Haagen-Dazs ice cream on the SFbest website and send it to his mother in Ji'an, Jiangxi, as a Mother's Day gift. Just a few years ago, in small cities like Ji'an, buying ice cream online was still a luxury, and imported fruit on many shopping websites could not be delivered there either.
At some point, besides cardboard boxes of all sizes, delivery electric bikes sometimes began carrying a small onboard refrigerator. Imported yogurt, Dutch tulips, Argentine frozen red shrimp... Cold-chain express delivery has grown from nothing, once again bringing people closer to the world.
Cold-chain delivery resources are insufficient, and fresh food is mostly transported at room temperature across provinces
Cold-chain express delivery is clearly not yet as developed as ordinary express delivery. Mr. Wang from Beijing once went to Guangdong on a business trip and wanted to send a box of Maoming lychees to his family. He asked several express delivery companies before finding one that could provide full cold-chain delivery. In the end, when his family received them, some of the lychees had still gone bad. "The lychees were wrapped in a foam plastic box with two small ice packs inside, and by the time they arrived the ice packs had completely melted," Mr. Wang said. "If it happened that no one was home and the courier carried the lychees around all morning, wouldn't they all go bad?"
"This is precisely one of the difficulties faced by cold-chain express delivery," said a relevant person in charge at SF Cold Chain. The most obvious difference between express delivery and logistics is that logistics is port-to-port and station-to-station, while express delivery is door-to-door. One feature of cold-chain express delivery is that orders are received and dispatched in scattered form, which means doors will be opened frequently during delivery, making temperature control in the refrigerated space more difficult. Moreover, cold-chain express delivery has higher timeliness requirements. Problems often encountered in express delivery, such as electric tricycles being seized or not being allowed into residential compounds, have a greater impact on cold-chain express delivery. This includes situations such as no one being home, as Mr. Wang mentioned, all of which greatly increase delivery costs.
"Never mind cold-chain express delivery, even the development level of cold-chain logistics cannot meet market demand. Inadequate cold-chain delivery has become a bottleneck restricting the development of fresh-food e-commerce," said Chen Tao, logistics director of Cainiao Network Technology Co., Ltd.
Cainiao Network is an express and logistics coordination platform under Alibaba, and helping e-commerce companies coordinate delivery resources is one of Chen Tao's daily tasks. "Our biggest impression when coordinating cold-chain resources is that resources are insufficient," Chen Tao said. "The fruits from their places of origin that we eat in daily life, such as ** grapes and Guangdong lychees, are in fact mostly transported by road at room temperature, then put into cold storage after reaching the sales destination, and shipped when a customer places an order. As a result, damage rates are relatively high, and the taste is affected somewhat as well."
Cold-chain delivery costs are high, the total number of enterprises is insufficient, and service quality varies widely
When transporting grapes from ** to Beijing, losses from road transport at room temperature may be 1/3 or more. Why do merchants still choose room-temperature transport instead of cold-chain transport? The most direct reason is the high cost of cold chain.
"At the same turnover rate, investment in cold-chain delivery is at least twice that of ordinary express delivery," a relevant person in charge at SF Cold Chain calculated for the reporter: In terms of vehicles, cold-chain transport requires refrigerated trucks. The state imposes restrictions on the exterior dimensions of trucks traveling on expressways, and refrigerated trucks must be fitted with insulation layers, so their storage capacity is smaller than that of ordinary trucks, and refrigeration equipment also consumes energy, so operating costs are considerably higher; in terms of warehousing, cold-chain express logistics requires three-temperature warehouses, and the cost is also higher than that of room-temperature warehouses; in terms of transfer and sorting operations, cold-chain express delivery requires constant-temperature operation rooms and specially made work uniforms. Constant-temperature operation rooms not only require large upfront investment but also consume a great deal of energy during operation; in terms of last-mile delivery, cold-chain express delivery requires special containers and suitable coolant solutions, which are also much more expensive than the cardboard boxes and delivery bags used in ordinary express delivery...
For fresh-food e-commerce that directly faces consumers, the volume of each order is often not large, and costs cannot be diluted by increasing scale, so the cost of cold-chain express delivery is even higher.
Another reason merchants are unwilling to choose cold-chain transport is that the total number of cold-chain express logistics enterprises is currently insufficient and service quality varies widely.
The current actual market situation is that the price of cold-chain express delivery for food is not much higher than that of ordinary express delivery. For example, the price difference for same-city delivery is less than double. Therefore, not many enterprises are willing to develop cold-chain express logistics.
Chen Tao said that, on the one hand, China's cold-chain infrastructure is insufficient overall. For example, refrigerated trucks account for only 0.3% of the total number of freight vehicles nationwide in China, while in Japan the figure is 2%. On the other hand, cold-chain delivery operators are small in scale. There are quite a few enterprises scattered across various places that can handle same-city cold-chain business, but not many can provide full-process cross-province cold-chain delivery, and there is a lack of brand enterprises with high credibility.
Enterprises should take the path of specialization, and government departments need to clear obstacles and build platforms for them
The pain points of the market are the opportunities for development. The fact that e-commerce companies feel that cold-chain delivery cannot meet demand precisely shows that there is huge market space for developing cold-chain delivery. "Promoting the development of cold-chain delivery will effectively stimulate market demand," said Shao Zhonglin, an expert at the State Post Bureau think tank. "Just as the rapid development of the express delivery industry has supported online retail in constantly setting new records, if cold-chain delivery can develop, the development of fresh-food e-commerce will become much smoother, which will inevitably promote consumption upgrading and further invigorate the internet economy."
From the perspective of enterprises, the first hurdle in developing cold-chain delivery is cost.
Innovation in packaging materials and coolant technology can effectively reduce costs. For example, the EPP recyclable insulated boxes developed by SF are lighter, more pressure-resistant and drop-resistant, which reduces cold-chain delivery costs; in last-mile delivery, SF switched to self-developed ultra-low-temperature cold storage agents instead of dry ice for delivering ice cream, which not only reduced costs but also extended the cold-retention time.
Informatization tools such as big data can also reduce costs. The high cost of cold-chain delivery of fresh food in China has an objective cause: transport is mostly one-way, so trunk-line refrigerated trucks often return empty. By coordinating information between e-commerce companies and delivery enterprises, Cainiao Network, on the one hand, consolidates scattered fresh-product logistics orders into larger batches to dilute costs; on the other hand, on return trips it does not turn on the refrigeration and transports daily consumer goods at room temperature, improving the use efficiency of refrigerated trucks. In addition, the application of big data technology can also help cold-chain delivery enterprises identify delivery temperatures that both preserve freshness and save energy, which can also help reduce costs.
However, investment in cold-chain delivery will certainly be greater than that in ordinary express delivery. Therefore, taking the path of specialization is a more realistic choice for developing cold-chain delivery. Shao Zhonglin said: "The cold-chain transport requirements for different goods such as solids, liquids, frozen goods, refrigerated goods, meat, and vegetables are all different, and the required equipment and technical requirements are also different. Specializing in one category can reduce upfront investment. Alternatively, one can specialize in just one link, such as warehousing, trunk-line transport, or home delivery, and do it in a specialized and refined way."
To develop cold-chain delivery, it is essential for government departments to refine standards and strengthen supervision. An employee of a cold-chain logistics enterprise told the reporter that cold-chain transport currently has no clear regulatory department and no standards with binding force, and the uneven quality of cold-chain delivery is not unrelated to this. "Some enterprises do not know what temperature is appropriate, and a small number of non-compliant enterprises entertain a hope that even if they turn off the refrigeration for a while midway, consumers will not be able to tell."
"Another reason cross-province cold-chain transport is inadequate is that obtaining permits for refrigerated trucks is a major problem," said a relevant person in charge at SF Cold Chain. "In addition, most refrigerated trucks are currently custom-modified by modification plants. The manufacturing technology for compartments and refrigeration equipment is updated very quickly, but the vehicle model announcement requirements take a long time, which restricts the application of new cold-chain technologies. Under current regulations, if we use safer vacuum tires, we instead cannot register and obtain license plates."
Experts believe that to solve the problem of insufficient cold-chain delivery resources, relevant government departments need to clear obstacles and build platforms for enterprises.