1. Efficient Reefer Transportation:
SPECIAL FEATURE
Key for Cold Chain Logistics
Though, the Indian Cold Chain
Industry is growing at a fast
pace, its high time the indus-
try should focus on preserving
perishable produce. Every year,
perishable products like fruits,
meats, flowers and vegetables
etc. worth `13,300 crore get de-
stroyed mainly because of the
poor cold chain infrastructure
and lack of reefer transport.
“Cold Chain Logistics” is an area
which needs immediate atten-
tion of the Indian Government.
Ritika Bhola talks to experts and
seeks solutions for the problems
existing in the industry
CargoConnect - june 201512

2. SPECIAL FEATURE
june 2015 - CargoConnect 13

3. CargoConnect - june 201514
SPECIAL FEATURE
Superior Haulage of Perish-
ables: A Necessity
Transporting perishable freight like
fruits and vegetables from farm gate
to the consumption point without
suffering any setbacks or temperature
anomalies requires establishment of
a comprehensive logistical process to
maintain the shipment integrity. The
quality of perishable produce deteriorates
drastically if correct moisture levels,
oxygen levels and temperatures are not
maintained throughout in the reefer
vans or trucks. Therefore, Indian cold
chain industry needs to have an efficient
“Supply Chain” and “Transportation
System.”
According to the data compiled by the
Emerson Climate Technologies, India,
the country has the potential to become
world’s second largest producer of fruits
andvegetables,buttheindustryisthrowing
away fresh produce worth Rs 13,300 crore
every year because of inadequate cold
storage facilities and refrigerated transport.
Therefore, in order to preserve perishable
produce and reduce losses and damage, the
authorities should invest more in advanced
technology equipped reefer vans and trucks
and introduce the concept of refrigerated
freight railcars which is still in its nascent
stage in India. It’s high time, the authorities
should start working on increasing the
number of reefer trucks and refrigerated
vehicles.
Observing the same, Sunil Nair, CEO,
Coldex affirmed, “Cold Chain is a challenge
in the absence of connectivity between
source point and market. As per estimate
from NCCD, we have 31 million Metric Ton
(MT) of cold storage capacity. We have
an estimated 7000 reefer trucks available.
Considering an average of 10 MT vehicle
capacity and an average turnaround of
one week we are able to move 3.6 million
MT of goods, which is 12-15 per cent of the
total capacity. Having said that, dearth of
cold storage infrastructure at farm gate in
terms of pre-cooling facilities, modern pack
houses is an impediment for movement of
goods from rural to consumption centre
maintaining cold chain. Low realisation,
poor road infrastructure are some of the
other causes. There is a skew towards
consumption of fresh in rural, tier-2 and
tier-3 towns. Rural markets are still far
from being consumption points of frozen
and chilled products.”
Agreeing with Nair, Pawanexh Kohli,
CEO & Chief Advisor, National Centre
for Cold Chain Development (NCCD)
stressed that there’s a need to develop
“Transport Capabilities” and also to
increase the number of reefer trucks,
refrigerated vans, containers etc.
He continued, “That’s why the new
components, programs, new system
standards were developed by the NCCD
which include reefer trucks in all sizes,
reefer containers and other advancements
which better facilitate transport handling.
NCCD has also launched call-in-centre
for Reefer Transport Operators and the
toll free number is 1800 267 6223. When
it comes to transporting fresh vegetables,
there’s a need to allow some fresh air to
come in. New designs need to be developed
for transporting perishable products at long
distances. Products like pharmaceuticals,
meats, ice creams etc can be stored inside
reefer vans or trucks for days but we cannot
transport perishable products at long
distances without fresh air.”
Meanwhile, R S Bedi, Director, PS
Bedi Group pointed out that in India,

4. CargoConnect - june 201516
SPECIAL FEATURE
refrigerated transport or cold chain
distribution is in nascent stage and is way
behind if compared to world standards for
cargo movement.
“At present, reefer transport business in
India is estimated at Rs. 10-12 billion which
includes reefer transportation demand
for both exports and imports. The ratio of
transport facilities to cold storage houses
across India is 1:8. This gives the minuscule
percentage of transport facilities vis a vis
cold storage. It’s a huge challenge and needs
due attention.”
However, Mihir Mohanta, General
Manager-Supply Chain, Mother Dairy
Fruit & Vegetable Pvt Ltd feels that
there’s no syndicate data to indicate
transport facilities available at present in
the cold storages in rural area. “One can
say that it is not so good at present. If that
was so we would not have been talking of
integrated cold chain infrastructure and the
need for it. Seventy per cent of cold store
capacity utilisation in India is because of
potato. It is by and large transported in
ambient transport. The refer transport
utilisation in rural areas is very low,”
he added.
On-time Delivery: Need of the
Hour
On-time delivery is very important
especially in the case of perishable products
like fruits, vegetables, flowers and meat
etc., as these products require certain
temperatures to be maintained right
throughout – storing, transporting and till
it reaches the end-users.
Even a slight delay in the delivery can
drastically deteriorate the quality of
perishable produce. Therefore, to avoid
wastage and losses, Indian cold chain
industry should make good use of special
reefer trucks and vans that are available
at present. If the concept of refrigerated
railcars gets developed and Indian
railways uses the facility to its fullest
capacity, it can improve the performance
of the freight movement across the country
thereby reducing the wastage of the
perishable goods.
Focusing on vehicle availability, Nair
highlighted, “We lack vehicle availability to
move perishable products within the period
they can be consumed. This is especially
true in case of F&V products. The lack
of cold chain end-to-end infrastructure
starting from farm gate to the consumption
point including last mile distribution
results in value loss and wastage. The last
mile delivery is the biggest challenge. These
require small fleet in far flung areas where
service and back-ups are not available from
OEM’s. The risks involved are a barrier to
investment in cold chain logistics further
compounded by disproportionate price
realisation.”
Meanwhile, Bedi penned down some
facts and informed that India has around
6,300 cold storage units, but can only
store less than 11 per cent of the country’s
total produce. While 105 million MT of
perishable produce is transported across
India annually, only four million MT is
transported via reefers. The transport
facilities form only 12 per cent of the cold
chain system.
He stressed, “In 2010, for the
transportation of perishable products,
there were 250 reefer transport operators
running around 25,000 vehicles in India.
Of these vehicles, 80 per cent were utilised
for the transportation of milk, leaving
only 5,000 vehicles for other produce such
as fruits and vegetables. This definitely
reduces the scope of on-time delivery of
perishable products and also destroys the
quality of the perishable produce.”
Agreeing with Bedi, Mohanta avowed,
“During summer season the demand
for reefer transport goes up as there is
increased requirement for ice creams
and milk products. Return trip freight
availability is another constraint that the
industry grapples with. Sometimes one
has to wait for weeks for the reefer vans
during summer season.”
“Cold Chain is a challenge in the absence of connectivity
betweensourcepointandmarket.AsperestimatefromNCCD,
wehave31MillionMetricTon(MT)ofcoldstoragecapacity.We
haveanestimated7,000reefertrucksavailable.Consideringan
averageof10MTvehiclecapacityandanaverageturnaroundof
one week we are able to move 3.6 million MT of goods, which
is 12-15 per cent of the total capacity.”
Sunil Nair
CEO, Coldex

5. CargoConnect - june 201518
SPECIAL FEATURE
Tech World
Technology plays a vital role in every sector.
Since, it’s important to maintain certain
temperatures, oxygen levels, moisture
levels in the reefer vans and trucks as
perishable products have a particular shelf
life or holding life, the vehicles are equipped
with advanced technologies and systems.
Deepak Thakkar, Senior Vice
President, Sales and GM, Cold Chain-
India Emerson Climate Technologies
(India) Ltd,informedthattemperatureand
humidity control are critical for perishable
products – like seafood, fruits and
vegetables – traveling over long distances
during harsh weather conditions require
tight climate control to protect quality.
He cited an example and explained,
“Transporting bananas is no easy task. As
soon as they are harvested, they are placed
into a refrigerated container while still in
the field and brought to 58.0° F (14.4° C).
After that, they are hauled by truck to port,
placed onto a seagoing vessel, transferred
to a refrigerated warehouse at the receiving
port, and then transported by refrigerated
truck again to the store. If the temperature
drops even a few degrees below the desired
temperatureatanytimeduringthisprocess,
banana skin will develop dark spot and
will not ripen properly. If the temperature
rises a few degrees, premature ripening and
shrinkage occurs.”
Thakkar added that transport refrigera-
tion systems, in a tropical country like India
require a high level of reliability and system
performance under demanding environ-
ment i.e. poor condition of roads, extreme
ambient temperatures.
Focussing on the solutions, Thakkar
insisted, “In addition to the hardware,
it is also imperative to adopt remote
monitoring solutions for optimal operation
of refrigerated trucks and to ensure product
quality and food safety. The hardware and
software solutions monitor reefer truck
conditions and notify logistics companies
and warehouses of deviations outside of
optimal ranges so they can take appropriate
actions. For instance, during a breakdown,
the system can immediately alert the local
branch so that a backup truck can be made
available immediately. It also aids logistics
companies to meet the stringent food
traceability and quality norms for their
customers.”
Comparing it with the facilities
available abroad, Bedi pointed out that
the refrigerated vans used in the west
are normally huge, and cannot work in
the narrow lanes and by-lanes of Indian
villages.
“Consequently, re-engineered and
localised vehicles have been designed for
the country like India that has hot climatic
conditions.TheexampleistheThermoKing
(an Ingersoll Rand brand) B100 unit fitted
in with a container can be modeled on small
reefer trucks to move in narrow lanes for
‘first and last mile’ delivery of temperature-
controlled and refrigerated products. This
innovation ensures that there is no wastage
of perishable food items such as fruits and
vegetables. Also, the B100 with its battery
operated unit is an ideal innovation for
India where small trucks typically run on
low horse power engines and do not have
the capacity to run a compressor directly.
Such customised solutions need to be
developed,” Bedi explicated.
Focussing particularly on apples,
Mohanta clarified, “Storing involves careful
control of temperature, oxygen, carbon
dioxide and humidity. It is largely practised
for apples. Apples take in oxygen and give
off carbon dioxide as starches in the flesh
change to sugar. In the sealed rooms, this
“There’s a need to increase the number of reefer trucks,
refrigerated vans, containers etc. That’s why the new
components, programs, new system standards were
developed by the NCCD which include reefer trucks in all
sizes, reefer containers and other advancements which better
facilitate transport handling. NCCD has also launched call-in-
centre for Reefer Transport Operators.”
Pawanexh Kohli
CEO & Chief Advisor, NCCD

6. CargoConnect - june 201520
respiratory process reduces the oxygen,
thus slowing the ripening process. It helps
to retain the crispy and juiciness in apple.”
Nair told that different products require
different temperature zones to retain
freshness, quality and shelf-life.
He also talked about the new concepts in
the cold chain sector:
Government Initiatives
Over the years, Indian Government has
formulated various plans and policies and
has taken several initiatives to improve the
overall performance of the cold storages
across the country. The authorities have
rationalised and revamped the incentives
offered to this sector. Cost norms have been
revised to incentivise strategic focus on
missing components and the new system
standards developed are non-restrictive
and instead allow for individual innovation.
The focus however, remains on the fresh
farm produce sector. In addition, to
incentivise the right kind of infrastructure
development, new components have been
added to the subsidy schemes, bringing
into focus energy efficiency, post-harvest
handling and transportation. Also, there
are special subsidies for green energy,
dock levellers, multi-modal equipment,
automation, high reach trucks, etc.
According to a report, Rs. 5,000 crore,
Warehousing Infrastructure Fund (WIF)
has been set up by the NABARD in October
2014 to finance cold chain and to develop
scientificwarehousing.Thisfundisnotonly
available for the development of cold chains
andcoldstoragesbutforallthecomponents
of cold chain like refrigerated trucks, cold
stores, pack-houses, pre-coolers, etc. This
fund is offered at the lowest interest rates,
directly linked to NABARD PLR, which are
effectively three to four per cent less than
commercial bank rates.
Apart from this, Nair jotted down some
more incentives that the GOI has offered
through its various bodies like National
Horticulture Board (NHB), National
Horticulture Mission (NHM), Agricultural
& Processed Food Products Export
Development Authority (APEDA) &
Ministry of Food Processing Industries
(MOFPI), NCCD etc.
Bedi also underlined the initiatives taken to
increase the number of reefer trucks for fast
transportation of perishable products.
He whined, “Current number of only
7,000 refer vehicle is like a drop in the
ocean,” and further stressed, “This is the
area that needs emphasis. The government
has offered a number of incentives like
schemes of (National Horticulture Board)
NHB, external commercial borrowing
allowed and excise exemption, no service
tax applicable and zero custom duty.
Apart from increasing the number of
“India has around 6,300 cold storage units, but can only store
less than 11 per cent of the country’s total produce. While
105 million MT of perishable produce is transported across
India annually, only four million MT is transported via reefers.
The transport facilities form only 12 per cent of the cold chain
system.”
R S Bedi
Director, PS Bedi Group
Customs duty at a nominal five per cent for
imports specified for cold chain projects
Basic customs duty NIL for import of
reefer vans and containers
Hundred per cent FDI through automatic
route open for cold chain
External Commercial Borrowings (ECB)
route open for cold chain infrastructure
Investment subsidy of 40 per cent avail-
able for cold chain projects
Service tax exempted for storage of agri-
cultural produce in warehouses and cold
storages
Deduction of 150 per cent of capital expend-
iture incurred for setting up and operating
a cold chain facility (for computing taxable
income)
Service tax is exempt for installation or
commissioning of cold storage equipment;
transport; technical testing and analysis
service by state or central certification
agencies
Excise duty is fully exempt for specified
equipment for cold storage or transport
INCENTIVES
Temperature Zones for Perishable
Products
Frozen – Minus 25 C to 18 C
Chilled – Plus 1 C to 4 C
Cool – Plus 15 C to 20 C
New Concepts & Technology
High usage of GRP in construction of
container box. GRP as against MS/SS
is heat resistant and light in weight. It
has less chances of retaining odour and
food grade.
Trial to use Nitrogen as a coolant is
being explored. Frequent door opening
especially during last mile distribution
results in temperature loss. A conven-
tional reefer would take time to bring
back the air temperature to the desired
level. A mechanism to release Nitrogen
in the box is being evaluated to ensure
that product retain the temperature till
consumption points.
Another green initiative that is being
tested is Eutectic Plates based container
box. The concept is to freeze the plates
to the desired temperature that are ca-
pable of maintaining for 07-08 hours.
This is useful in last mile delivery.
SPECIAL FEATURE

7. CargoConnect - june 201522
vehicles, Ministry of Road Transport
and Highways (MORTH) has also made
number of technological and infrastructural
advancementsinthelastfewyears.National
permit vehicles have been introduced
where tax payment is online. RFID (Radio
Frequency Identification Device) enabled
vehicles is the step taken by the ministry
to address the issue of long queues on toll
plazas. Besides, NCCD has been formed
to address the issue of skilled manpower
and number of transport vehicles. MOFPI
is already working on the projects of
integrated cold chain.”
Mohanta too informed that transporta-
tion is a major challenge. Out of 104 million
metric tons of perishable produce that are
transported every year only four million
metric tons is transported via reefer trucks.
He added, “About 100 million metric tons
of perishable produce move via non–reefer
mode and only four million metric tons is
transported by reefer. There is still a long
way to go. High cost of transportation is a
major challenge for transportation of fruits
and vegetable. Per kg basic cost of fruits and
vegetable is low and hence it cannot take
the load of high cost freight. Govt has taken
many initiatives like infrastructure status
since 2011-12 and viability gap funding upto
40 per cent of the cost will definitely help to
spur growth in this segment. NHB, NHM,
Horticulture mission of North East &
Himalayan States (HMNEM), APEDA and
MOFPI are some of the
agencies who are actively
involved in creating
infrastructure for fruits
and vegetable storage and
transportation.”
Thakkar talked about
the report that the com-
pany had commissioned
on Food Wastage and
Cold Storages.
Underlining the facts,
he said, “Approx 80 per cent of reefer
vehicles are used for dairy products, leaving
the balance 20 per cent for other produce.
Thisisfarbelowtherequirement,giventhat
India is the world’s second largest producer
of fruits and vegetables. The percentage of
fruits and vegetables transported through
refrigerated trucks is almost negligible.
With growing demand for food safety and
quality, Reefer Logistics is expected to
become a major growth driver for the cold
chain industry in India. Indian Government
has been very supportive to the needs of the
cold chain logistics industry and has come
out with three major initiatives to develop
the sector:
• Road infrastructure
• Transportation cost
• Skill development
In an effort to build a robust road
infrastructure, MORTH is pushing for
construction and up-gradation of 45,000
km of roads nationwide. This will ensure
improved connectivity with remote areas in
the country and will bring in much needed
focus on first and last mile connectivity.
High cost of transportation is a major
challenge for refrigerated vehicles market.
Government has implemented lenient
tax regulations and has waived levy of
Excise Tax on domestic production and
“About 100 Million MT of perishable produce moves via non–
reefermodeandonlyfourmillionmetrictonsistransportedby
reefer.Thereisstillalongwaytogo.Highcostoftransportation
is a major challenge for transportation of fruits and vegetable.
Per kg basic cost of fruits and vegetable is low and hence it
cannot take the load of high cost freight.”
Mihir Mohanta
General Manager-Supply Chain, Mother Dairy Fruit & Vegetable Pvt Ltd
SPECIAL FEATURE

8. CargoConnect - june 201524
customs for import of ready-to-use reefer
equipment. Government, in collaboration
with private bodies, is also taking adequate
steps to train the logistics workforce to
enhance their skills in handling goods and
managing refrigeration equipment as well.”
Experts Speak Out
Industry experts suggest that though the
industry is growing at a fast pace and that
they are satisfied with the work done by
the authorities for the cold chain sector so
far, but still there’s lot to be done. The cold
chain industry is still struggling to cope up
with many challenges that may hinder the
growth of the industry in longer run.
Nair highlighted few challenges that the
industry is trying to cope up with:
Well, on a positive note, Bedi asserted,
“The government has taken several steps
for the sector, such as schemes for capital
investment subsidy from the NHB, NHM
and MOFPI for the agri investors to set
up cold chain infrastructure. Government
has also set up NCCD which would help
in establishing building standards through
internationalbenchmarkingandtopromote
research and development activity in the
coldchainsector.Theyhavealsoestablished
partnership with Indian Railways to set
up cold chain infrastructure. These steps
are praiseworthy. Technical collaboration
however is required to be promoted at all
the levels. Also innovative ways to reduce
the cost of power and energy need to be
worked out.”
Mohanta too assured that focus has been
on the food parks and integrated cold chain
development and concluded by saying,
“There is a proposed financial outlay of
USD 335 million and USD 650 million for
cold chain infra and food parks respectively.
There is also 50 per cent to 70 per cent
capital grant on such projects. A cluster
approach or a product based approach
may also be looked at to further augment
things in the right direction. Government
also needs to emphasise on multi-purpose
cold stores and the last mile infrastructure
development,” he ended.
“Temperature and humidity control are critical for perishable
products – like seafood, fruits and vegetables – traveling over
longdistancesduringharshweatherconditionsandrequiretight
climatecontroltoprotectquality.Transportrefrigerationsystems,
inatropicalcountrylikeIndiarequireahighlevelofreliabilityand
system performance under demanding environment – i.e. poor
condition of roads, extreme ambient temperatures.”
Deepak Thakkar
Senior Vice President, Sales and GM, Cold Chain-India Emerson
Climate Technologies (India) Ltd
Land acquisition – Complex and CLU an
impediment in development of cold chain
No fast track system and single window
clearance for multiple set of licenses
Service tax exemption benefit is not
applicable to modern cold chain services,
should include cold chain activities and
not cold warehousing alone
No customs duty benefit of post project
components necessary for optimisation
Need to develop capacity for local
equipment manufacturers
Need to promote non-conventional and
hybrid systems for cold chain use
Lack of design standards
There is an enhanced risk to cold chain
operators when handling perishable
products where in service cost is dispro-
portionate to risk and cost of goods han-
dled. No redressal system available
Focus of multi-modal transport
Regulation limits the earning life of
reefer vehicles. An extension can offset
shortage of vehicles.
Serious shortage of trained manpower
including drivers for reefer trucks. No
institution as of now to provide job ori-
ented courses to this sector
CHALLENGES
SPECIAL FEATURE