Cold chain customers look at location first

According to a Global Cold Chain Alliance survey, price and customer service round out the top three factors when choosing a provider.    Location, location, location. That’s what matters most when choosing a cold chain provider, according to more than 200 food processors, distributors and retailers in 14 countries.
   The Global Cold Chain Alliance (GCCA), which represents all major industries engaged in temperature-controlled logistics, conducted an 18-month-long study that included focus groups and a comprehensive survey. Of the 270 survey responses, 202 were considered complete and included in the final analysis in the Cold Chain Customer Research Report.
    When it came to choosing a cold chain provider, respondents said location was the top factor, followed closely by price and customer service.
   Customer service issues were the main reason why survey participants cut ties with a cold chain provider in the last three years. Pricing was the second most common reason, followed by insufficient capacity and damage or loss of product tying for third and poor management of operations in fourth.
   The top four key performance indicators respondents look at are shipping accuracy, warehouse cost per unit, on-time delivery and inventory/cycle count accuracy.
   “Cold chain providers should not allow the noise around pricing and KPIs to distract from the realities of needing to provide high-quality customer service,” the report said. “Cold chain providers are in the service business. Successful cold chain providers will need to ensure customer service is embedded into their company cultures.”
   Across the board, survey respondents generally were satisfied with their primary cold chain partners, with 73.57 percent expressing some level of satisfaction with their providers, 7.86 percent indicating neutrality and 18.57 percent noting some level of dissatisfaction.
   Larger companies reported a higher likelihood of dissatisfaction with their primary cold storage providers.
   “During the focus group discussions, customers indicated that as they grew, they needed to rely on national providers to fulfill distribution needs,” the report said. “And, as such, the shift to a national provider may come with less personalization, decreased customer service and more dissatisfaction.”
   However, some customers felt there was more uncertainty around smaller providers due to concerns they may not have fully developed succession plans or may not be able to grow and meet demand.
   Overall, 80.75 percent of the survey respondents reported that cold chain logistics costs increased for their companies in the last 24 months. All U.S.-based companies reported an increase, with the largest hike in costs in the Midwest and the smallest in the Northeast.