GCCA Eyes Cold Chain Business Challenges
June 1, 2020
The Global Cold Chain Alliance (GCCA)
has released the first-quarter data showing the general major cost
structure of operating refrigerated warehouses. The cost of labor was
once again the largest share of expenses, followed by property rent or
Key findings of this research
Responses. The top COVID-19 response was to take extra measures to protect the workforce (e.g. staggered shifts, social distancing, remote working). The next-highest issues were maintaining overall business continuity and workforce morale.
Impact on revenue. Comparing
actual Q1/Q2 revenue vs. Q1/Q2 pre-crisis revenue expectations, 54% of
all respondents reported some type of a decrease, 11% saw no change, and
35% reported an increase in revenue. Respondents believe the next six
months may look very similar to the past few months.
Government priorities. Respondents indicated access to PPE and cleaning as the top priorities they would like to see governments focused on, followed closely by financial support for employees as well as employers in the cold chain industry.
Changing business operations. Measures taken to reduce person-to-person contact to slow the spread of the virus caused operational changes across the cold chain. While these measures were done out of necessity, the changes also provided an opportunity to adjust or try new processes or controls that if effective and efficient may remain in place after the pandemic from COVID-19 is over. 53% of respondents believe the percent of employees working remotely will increase. Pre-pandemic work-from-home rates averaged 4.5% of their workforce. That has increased to 19.8% of the workforce during the pandemic, and there is an expectation that about 10.6% of the workforce will continue to work remotely. This could lead to an increase of 6.1% of the workforce working remotely moving forward.
Industry Trends. About three quarters of all respondents think that the pandemic will cause an increase in the growth rate of e-commerce/direct-to-consumer delivery of chilled and/or frozen product. Even stronger demand for data and predictive analytics is expected in the future, and respondents are optimistic that the growth rate of the industry as a whole will be even more significant because of the pandemic. Conversely, 73% of respondents believe that global trade opportunities will either decrease or remain the same relative to pre-COVID expectations.