Europe Cold Chain Logistics Market

The Europe cold chain logistics market size was valued at $64.10 billion in 2022, and is projected to reach $239.71 billion by 2032, registering a CAGR of 14.6% from 2023 to 2032.  

Cold chain refers to the process of shipping and storing refrigerated and frozen goods. It is a series of events related to production, storage, distribution, and logistics, all in a low-temperature range. Cold chain logistics refers to all the methods used to keep temperature-controlled goods and other perishables stay fresh at a consistent temperature during the logistics process. Cold chain logistics comprises technology, science, and a process. The technology includes the cold chain’s reliance on physical ways of maintaining low temperatures. The science relates to the biological and chemical methods related to food storage and stability. The process includes logistics methods used to maintain the overall supply chain.

The demand for fresh fruits and vegetables has steadily increased in Europe due to change in consumer preferences and growth in health consequences. This led to an increase in the production and trade of fruits & vegetables, creating a need for efficient coal chain logistics. In addition, stringent regulations regarding food safety and quality standards have necessitated the use of cold chain logistics. Furthermore, there has been an increase in focus on sustainability and reduction in the carbon footprint of cold chain logistics, leading to the development of eco-friendly solutions for preserving fruits and vegetables. For instance, in January 2021, the European Union introduced new regulations to improve the quality and safety of organic products, which would impact the cold chain logistics for organic fruits and vegetables.

Moreover, the increase in demand for dairy and frozen products, driven by change in consumer preferences & a surge in population, has led to the growth of the cold chain logistics market in Europe. In addition, advancements in cold chain technology, increase in investment in infrastructure development, and stricter regulation for food safety drive the growth of the market of cold chain logistics in Europe. Moreover, the marketplace has invested in advanced cold chain technologies for dairy and frozen desserts to improve efficiency and reduce waste, which is expected to drive the growth of the Europe cold chain logistics market during the forecast period. For instance, in March 2023, Lineage Logistics, announced the acquisition of a new facility in Belgium to expand its presence in the European market. This move is expected to increase the company's capacity for dairy and frozen products and improve its ability to serve customers across Europe.

Augmented global trade and a strong economic environment predominantly drive the cold chain logistics industry in Europe. In addition, increase in trade activities related to fruits and vegetables between Europe and the North America drives the growth of the market in this region. For instance, according to the Centre for the Promotion of Imports from developing countries (CBI), Europe has a population of more than 530 million consumers, and it accounted for more than $ 68.13 billion (€62 billion), or 43% of the total global trade value of fresh fruit and vegetables in December 2022. In addition, European Union imported vegetable, fruit, and nut food preparations worth $6.96 billion in the year 2022, according to the United Nations COMTRADE database.                                

The factors such as the growth in penetration of the e-commerce industry, rise in number of refrigerated warehouses and the growth pharmaceutical sector, the growth of the processed food sector and focus on reducing food waste, and Government policies and initiatives to promote the Europe cold chain logistics industry supplement the growth of the cold chain logistics market. However, poor infrastructure & higher logistics costs, lack of control of manufacturers & retailers on logistics service, and environmental concerns regarding greenhouse gas emissions are the factors expected to hamper the growth of the Europe cold chain logistics market. On the contrary, a surge in the use of IT solutions & automated software for cold chain logistics, cost-cutting & lead time reduction due to the adoption of a multi-modal system, RFID technologies for cold chain applications, and surge in presence of industry-leading temperature-controlled facility network & market players create market opportunities for the key players operating in the Europe cold chain logistics industry.

The Europe cold chain logistics market is segmented on the basis of end-use industry, temperature type, mode of operation, and region. By end-use industry, the market is divided into fruits & vegetables, bakery & confectionary, dairy & frozen desserts, meat & seafood, drugs & pharmaceuticals, and others. By temperature type, it is bifurcated into chilled and frozen. By mode of operation, it is classified into railways, airways, roadways, waterways, and warehousing. By country, it is analyzed across Germany, France, the UK, Italy, Spain, and the rest of Europe.

The leading players that operate in the Europe cold chain logistics market are A.P. Moller - Maersk, Americold Logistics, Inc., Constellation Cold Logistics, Deutsche Post AG, DSV, GEODIS, Kuehne+Nagel, Lineage Logistics Holdings, LLC, MSC Mediterranean Shipping Company, and Noatum Logistics. Business expansion, agreement, and acquisition are the extensively adopted strategies among the market players, followed by partnership and product launch.

Growth in penetration of the e-commerce industry

E-commerce refers to the buying and selling of goods by using the Internet. It has reshaped the global retail industry due to its facility of providing visibility of inventory status, expected delivery time, and a variety of shipping options, including tracking options and easy returns. With the rise of e-commerce, more companies in the European region have shipped perishable goods such as beverages, fresh products, and dairy products. As a result, the demand for temperature-controlled logistics services has increased. This has led to the growth of the European cold chain logistics market.

Moreover, the COVID-19 pandemic accelerated the growth of the e-commerce industry in Europe. Online grocery platforms have partnered with cold chain logistics to ensure the safe and timely delivery of groceries to consumers. This has further increased the demand for cold-chain logistics services. Moreover, in a post-pandemic environment, there is rise in demand for online grocery platforms as many consumers have turned to online grocery platforms to avoid crowded stores.

This is expected to propel the growth of the market during the forecast period. For instance, in January 2023, Stow Robotics, the warehouse automation business unit within Stow Group, and Phononic, a global leader in solid-state cooling technology, entered into a collaboration to provide cold chain fulfillment solutions that serve the retail grocery industry across Europe. Furthermore, consumer goods companies and e-commerce platforms, such as Flipkart and Amazon, tied up with logistics providers to deliver goods fast and in a cost-effective way, which, in turn, fostered the growth of the Europe cold chain logistics industry.

Rise in number of refrigerated warehouses and the growth in pharmaceutical sector

The approval of significant pharmaceutical products in Europe shows a trend in pharma industry, which indicates the development of machines and medicines. A rise in number of products and services, from vaccines to cell and gene therapies, require cold chain handling and refrigerated warehouses. For instance, in December 2022, the European Commission issued the first approval of an allogeneic T-cell therapy in the world, a significant milestone for the cell and gene therapy sector. Such developments tend to increase the number of refrigerated warehouses for the storage of pharmaceutical products. In addition, to protect products during transit, pharmaceutical companies and logistics service providers can utilize a variety of passive solutions and temperature-controlled solutions.

Moreover, certain modes of transportation can be used to transport pharmaceutical goods. To prevent delays on the road and disruptions in the supply chain, it is vital to carefully plan a route and a logistical system, as well as to establish the proper temperature condition. In March 2021, the Health Product Regulatory Authority (HPRA) Europe issued guidelines on good distribution practices for medicinal products for human use, extending temperature requirements to transportation, and expanding coverage to include over-the-counter drugs.

It mentioned the wholesaler must have documented evidence available for a review confirming that the product was maintained within the cold chain for the entire time period during which it was outside of its control. To fulfill such needs, several warehouses and wholesalers utilize cold chain systems, which are designed to ensure the ideal storage and transportation conditions for temperature-sensitive products. This drives the growth of the Europe Cold Chain Logistics market.

Poor infrastructure and higher logistics costs

Europe has well-developed transportation infrastructure, including railways, highways, seaports, and airports. However, the cold chain logistics infrastructure in Europe varies significantly across different regions and countries. Some regions have limited or inadequate infrastructure. Cold chain logistics needs good infrastructure, a supply chain, and trade facilitation.

Without these, firms must build up more stock reserves and working capital, which can strongly affect national and regional competitiveness due to high financial costs. Moreover, the lack of standards in the cold chain industry, where the quality and adaptability of available cold warehouse space is a major problem, also presents important challenges. These standards are needed in relation to storage temperature, security, and operational processes. In addition, a lack of infrastructure hinders the industry by raising costs and lowering supply chain dependability. Examples include significant transportation inefficiencies, deteriorating storage infrastructure, a complicated tax system, slow adoption of new technology, and inadequate logistical professional skills.

Furthermore, the absence of proper refrigerated storage & containers and poor facilities & management result in a high level of loss, damage, and deterioration of stock mainly in perishable goods. Infrastructure directly influences transport costs and indirectly affects the level of inventories, and consequently financial costs. Moreover, price increases are frequently accompanied by increases in demand, however, this is not the only factor driving up the cold chain logistics costs. The cost in the cold chain varies according to transportation. When delivering cold chain products, there are so many external elements to consider. Each cargo in the cold chain is distinct and subject to unique rules and temperature constraints. As a result, there are several outside factors that affect the price of cold chain shipments. For both shippers and carriers, becoming involved in the cold chain logistics sector is expensive. As the volume rises, the cost of insulated containers and refrigerated trucks rises. Therefore, poor infrastructure, high inventory, and higher logistics prices are expected to hamper the Europe cold chain logistics market growth.

Surge in use of IT solutions & automated software for cold chain logistics.

The use of IT solutions and automated software for cold chain logistics in Europe is expected to supplement the growth of the market. This is due to several factors, including the need for more efficient and accurate tracking and monitoring of products, as well as the need for greater visibility and transparency in the supply chain. Adoption of IT solutions in cold chain logistics service is extremely essential for seamless and efficient flow of the entire supply chain. The IT solution adds economic value to the supply chain. IT solution plays a vital role in the timely delivery and tracing of goods in the supply chain. Various software, such as IoT, warehouse management systems, electronic data interchange (EDI), and cloud computing, support cold chain logistics service providers to enhance their real-time monitoring and tracking capabilities.

Moreover, IT solutions and automated software can help to streamline the cold chain logistic processes by providing real-time data on temperature, humidity, and other environmental conditions that can affect product quality. This can help manufacturers and resellers to identify potential issues before they become critical, and to take corrective action quickly to prevent product spoilage or contamination.

In addition, IT solutions and automated software can help to improve the overall efficiency of the cold chain logistics process by reducing manual tasks and automating key processes. This can lead to cost savings and increased productivity, which is anticipated to provide lucrative opportunities to Europe Cold Chain Logistics market players to drive the growth of the market during the forecast.

COVID-19 Impact Analysis

The impact of COVID-19 has been widely visible across all the logistics-dependent mode of transport around the world. Although there are some industries that are struggling due to the pandemic, some are thriving, such as healthcare & pharmaceuticals, e-commerce, and daily essentials goods industry, which are expected to affect the logistics industry positively during the COVID-19 outbreak globally. The pandemic has positively impacted on the Europe cold chain logistic market due to increased demand for temperature-controlled storage and transportation of pharmaceuticals, vaccines, and other medical supplies. The development and distribution of COVID-19 vaccines placed a high demand on the cold chain logistics markets, with many companies and governments investing in cold storage facilities and transportation infrastructure.

Key Benefits For Stakeholders

• This study presents the analytical depiction of Europe cold chain logistics market analysis along with the current trends and future estimations to depict imminent investment pockets.
• The overall Europe cold chain logistics market opportunity is determined by understanding profitable trends to gain a stronger foothold.
• The report presents information related to the key drivers, restraints, and opportunities of the Europe cold chain logistics market with a detailed impact analysis.
• The current Europe cold chain logistics market is quantitatively analyzed from 2022 to 2032 to benchmark financial competency.
• Porter’s five forces analysis illustrates the potency of the buyers and suppliers in the industry.

 Europe Cold Chain Logistics Market Report Highlights