The value of the global cold storage industry is projected to grow to around $134.98 billion by 2030, fueled by a number of factors, including technological advancements in temperature-controlled packaging and processing, which improve the quality and shelf life of stored goods.
Meanwhile, customer expectations have changed since the pandemic. Where bulk shipments to stores used to be the norm, there’s increasing demand for perishable foods and temperature-sensitive pharmaceutical products to be delivered directly to customers. And 85% of those customers will take their business to another vendor if they can’t get delivery within two days.
Temperature-sensitive pharmaceuticals have even more stringent requirements than foods, with spoilage occurring after even short excursions a few degrees outside of their exacting temperature range. Meanwhile, drug shortages are common, and demand for many medications is increasing.
If you’re a Midwest food manufacturer or pharmaceutical distributor who wants to keep up in this fast-paced environment, it’s essential to eliminate bottlenecks in your cold chain logistics that can cause delays. One of the most common — and easily avoided — issues is a mismatch between your production lot sizes and the method used to store your inventory at your cold storage facility.
This article will explore the different types of cold storage warehouse systems, give examples of use cases that can best benefit from each, and show how choosing the system that best fits your specific needs can have a big impact on your bottom line.
At one time, bulk cold storage facilities were the primary choice for pharmaceuticals and commercial foods. These facilities were built to store large runs of single SKUs and lots together with a high pallet density per lot. Full truckloads of a single product would ship directly from storage to retailers or wholesalers for distribution, and there were limited mixed-load capabilities.
This tendency began to shift with the rise of technology, as the growth of e-commerce cold chain distribution allowed manufacturers of temperature-sensitive products to expand their methods of distribution. The pandemic took direct-to-consumer shipping to a new level, as lockdowns helped manufacturers connect with a surge of new customers, eager to buy direct.
A few decades ago, another factor that contributed to the rise of distribution cold storage also came into play: a higher volume of Stock Keeping Units (SKUs). Manufacturers have been creating new varieties of products in response to customer demand ever since. But these variations typically have smaller runs with fewer pallets per lot than flagship products, which makes storing them on deep bulk racks less efficient.
Today many food and pharma manufacturers are creating unnecessary delays in their cold chain by storing smaller lots of less popular SKUs and direct-to-consumer products in bulk cold storage or keeping SKUs with larger lots in a distribution cold storage system.
Understanding the difference and knowing when to use a hybrid bulk + distribution cold storage model can remove this unnecessary bottleneck in your cold chain and reduce costly delays.
Systems of organization in commercial cold storage warehouses can be broken up as follows:
Selective racking typically falls into one of two categories:
Let’s take a closer look at these options and see the strengths and weaknesses of each of these.
Warehouses that were built more than 15 years ago typically use bulk pallet racking. This system is ideal for manufacturers that stock large production runs with a large number of pallets per lot.
Speed is the name of the game with bulk racking. Forklifts quickly move between loading docks and designated cold storage bays, easily passing each other in the wide aisles as they store lots close together in a group. Operators fill rack positions from the back to the front, loading pallets 4 positions deep at each of the 4-5 levels within the bay.
Warehouses that were built in the past 15 years will most likely offer selective pallet racking. This system was designed to meet the emerging needs of manufacturers, importers, or distributors that typically produce more than 2 lots in a single truckload.
Easy access to each stored pallet is the main advantage of single-deep select racking. Pallets within a lot are often stored farther away from each other, but individual pallets have more flexible handling requirements than those stored on deep racking. Aisles tend to be narrower to maximize storage space, which means that only one forklift can enter an aisle at a time. Closely placed single-deep racks tend to require more maintenance due to the increased risk of forklift impact.
Double-deep racks offer a similar capability as single-deep racks but will either have a mechanism that automatically brings the rear position to the front or will require forklifts with longer forks or telescoping capabilities. The second position is not immediately accessible because it’s located behind the first, making double-deep racking share some of the advantages and disadvantages of bulk racking. It can fit more positions in a smaller footprint but is not quite as flexible as single-deep racking and there’s more wear and tear on material handling equipment (MHE). This system may be a good fit for some manufacturers, depending on their inventory and business model.
Choosing the right cold storage rack system is essential for minimizing inbound/outbound turnaround.
MISMATCH: Bulk production items or freight with high pallet count per lot and SKU stored in select racking
RESULT:
MISMATCH: Low density per lot freight (4+ SKUs, date runs, or pallet IDs) stored in bulk racks
RESULT:
If you have a combination of higher and lower production volume items, there’s also another option.
If your business deals in goods that have a combination of SKUs with a high pallet density per lot and SKUs with a low pallet density per lot OR if you have a few items requiring case pick service but other items picking in full pallets, you can improve turnaround and reduce driver delays with a hybrid cold storage warehouse model.
In a hybrid cold storage system, products with a high density of pallets per lot are stored in bulk racks, and products with a low density of pallets per lot are stored in selective racks.
Did you know that Interstate Cold Storage warehouses have both bulk and selective rack systems for safely storing your inventory across the Midwest? Our warehouses are optimized for efficiency, with generous dock space that makes it easy for drivers to get in and out and a large number of doors that allow for a smooth flow of forklift traffic.
We know that happy employees take better care of our customers, so we take care of our staff and make sure that they feel like valued members of the team. That effort is reflected in our retention rate, which is 5X higher than the industry average. That means that our seasoned management team will give you the guidance you need to find the cold storage solutions that best fit your business. Experienced forklift operators will be handling your inventory. Your drivers will see familiar faces when they come to our docks. Our team will get to know what your inventory looks like, where it’s located, and any special considerations that might be involved with it. In short, you’ll not only know that your inventory is good hands, but you’ll know exactly whose hands it’s in.
Want to find out how Interstate Cold Storage can help improve cold chain efficiency and turnaround times?
