The overall Cold Chain Market in Malaysia generated about USD 90 Mn in 2021 and the industry is expected to moderately grow over the coming few years
The Market is in the Growth stage and the top four cold warehouse operators in Malaysia are occupying about 50% of the market share. Market players are consolidating to gain a competitive advantage. The cold chain operators in Malaysia offer a plethora of services under one roof, including packaging, labeling, batch separation, film-stretch application and palletizing.
- Challenges encountered by the Malaysian Cold Chain Market- Points to build upon to beat competition
Some challenges which the industry faces
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IOT systems have not been fully developed to a level where it can facilitate seamless communication between the service providers and buyers. Many manufacturers are hesitant to sign one multi-year contract with a single 3PL cold storage provider. Because there are so many service providers to choose from, manufacturers want to renegotiate contracts or find more value-added services with other companies.
Perishable goods may damage or decay when proper conditions are not met, and it is hard for the end consumer to identify where the break occurred in the transportation process. Lower demand for cold chain service providers outside the central city and the reasonable time to deliver cold chain products within Malaysia are some challenges which the industry faces.
2. Major Solutions are being adapted by the industry to Improve the Overall Efficiency in Malaysia’s Logistics Market
Cross docking Vs Warehousing
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Data recording, traceability and other features of blockchain can solve many problems in the supply chain. The intelligent Internet of Things combined with the blockchain can track supply chain logistics and use smart contracts to manage commercial transactions while achieving commodity logistics management. All data is shared in a secure and trusted manner throughout the supply chain.
Consolidated shipping is a freight consolidation service mainly provided by top freight forwarders. In this service, large quantities of goods are shipped in smaller volumes and further transported after assembly for better rates and safety of goods.
Cross docking is another way which Logistic players are adopting to solve delivery issues and move to more of a just in time inventory model in Malaysia. FMCG companies often lack systems and resources to effectively manage the entire process. Hence, well diversified and well equipped 3 PL players with the know how and technical expertise are helping FMCG companies reduce the overall logistics cost.
3. Important parameters for decision making process in cold chain market- “Success mantra for old and new players”
Efficiently designed cold storage
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- Companies providing good quality solutions at competitive rates are preferred.
- Price charged for freezers is a significant determining factor in decision making.
- Provision of value-add services such as co-packing, customs assistance, web interfaces, processing and assistance in disaster recovery goes a long way. Mismanagement also negatively impacts the brand value.
- Vendors having adequately sized cold storage/warehousing capacities to store large consignments are preferred.
- Clients seeking cold transport solutions seek companies that have large fleet size including reefer vans and trucks.