Chinese demand for cold chain logistics outstrips supply

Beijing: China is the world’s third largest cold storage market but demand for temperature controlled logistics outstrips capacity says Troy Shortell, senior vice president for Greater China at Havi Logistics.

The German logistics provider handles logistics for the MacDonald’s fast food chain, which plans to add more than 700 restaurants in China by 2013. McDonalds’ network of 2,000 restaurants in China, even with the new restaurants, is still smaller than KFC’s 3,200 outlets within the country, but the strong expansion will put new demand on distribution channels from gateways to domestic networks.

Havi Logistics orders and owns McDonalds’ inventory before it is delivered to the fast food giant.

Although only a small amount of what should be fully refrigerated moves through the cold chain with correct temperature maintained, the Chinese government’s new five-year plan calls for an expansion of the reefer services, said Shortell.

“There is no doubt that the reefer import market is growing,” said Eric Eng, vice president, Global Reefer Trade, APL Co, who oversees the company’s global reefer activities. “The middle income group in China is growing, and their disposable income is getting higher and higher.”