Cold Supply Chains and Carbon Emissions: Recent Work and Recommendations

Ali Bozorgi
Joseph Zabinski
Jennifer Pazour
Dima Nazzal

Abstract
Cold supply chain systems, which require large amounts of energy to keep the products being transported
cool, represent a significant source of global carbon and greenhouse gas emissions. In this paper, we
address foodstuffs and medical goods, the two primary types of cold products, in terms of the supply
chain decision making needed to improve financial and environmental sustainability. We first provide an
overview of the characteristics that make cold supply chains distinct, with a focus on the two primary
types of chains designed for the major types of products handled. We then proceed to a review of recent
academic literature addressing the issue of emissions from cold supply chains, and note observed gaps.
We conduct a more in-depth examination of cold-chain decision-making, at the three levels strategic,
tactical, and operational appropriate to different time spans and consideration horizons. We conclude
with the results of our survey and analysis, and suggest directions and topics for future research in the
area to pursue.
Keywords
cold supply chain, carbon emissions, sustainability, logistics

Introduction

Within the broader field of supply chain management, cold supply chains stand out due to their unique
characteristics and their vital position in global trade networks. Given their special status, their
characteristics warrant close study from a number of important perspectives that systems engineers are
only beginning to understand.
Cold supply chains deal with products most frequently, perishable foodstuffs, medicines and vaccines,
and biological tissues that must be kept cold. This requirement necessitates a specialized cooling
infrastructure, through production and transportation to consumption. Unsurprisingly, these additions to
standard supply chain infrastructures require additional material and monetary investment to construct

and maintain, as well as more energy to operate. Less obviously, these additions magnify cold supply
chains interactions with the environment through increased emissions. Increasingly, engineers and
decision makers will need to address environmental concerns when planning for cold products provision
and supply chain operations.
Numerous studies in recent years focus on the emissions from refrigerated trucks and transporters, cold
warehouses, packaging and other components in the supply chain (Calanche et al., 2013; Dekker,
Bloemhof, & Mallidis, 2012; James & James, 2010; Wang, Chen, Lee, & Tsai, 2013).
According to a survey by United States Department of Agriculture (USDA) in 2012, a total gross
refrigerated storage capacity of 3.96 billion cubic feet (bcf) exists in the United States, of which 3.22 bcf
is usable1. The global market for deep-freeze foods is estimated at $165.4 billion in 2009, and is expected
to reach $199.5 billion in 2014.2
The global cold supply chain accounts for approximately 1% of emissions (James & James, 2010); it is
around 3.5% for the UK alone Garnett (2007). The major refrigeration coolant used is synthetic
hydrofluorocarbon (HFC), which has a large Global Warming Potential (GWP) indicator of 14,8003.
Leakage from refrigeration also contributes to global emissions, in addition to adding costs to the system4.
Downtime, for example, can be caused by leakage. According to Patterson (2002), 1 hour of downtime
resulted in losses of $6,450,000 for brokerage operations and $2,600,000 for credit card authorizations.
In this paper, we survey the recent literature on cold supply chains from a carbon emissions perspective.
This literature survey is not to be taken as an exhaustive analysis; rather, we focus on the most significant
developments. This overview provides a good reference for the current state of affairs and a starting point
from which to pursue deeper investigations of the issues considered. The remainder of this paper is
organized as follows. In Section 2 we describe our methodology in carrying out the literature review; we
present this review in Section 3. In Section 4, we discuss the costs and emissions of the cold chain at three
different levels of decision making (strategic, tactical, operational) that characterize comprehensive
supply chain management. We summarize our findings in Section 5.

http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1034
Deep-Freeze: Optimizing Efficiency in Deep-Freeze Warehouses. Food Logistics.
3
http://css.snre.umich.edu/css_doc/CSS05-21.pdf
4
http://www2.epa.gov/sites/production/files/documents/IOR_ReducingRefrigerantEmissions.pdf
2

Methodology

To find recent work relevant to our study, we searched scholarly databases by using specific keywords.
To capture cold chain characteristics, for example, we used the keywords cold, chain, chill, cool,
and supply; for emissions characteristics, we used emissions, carbon, CO2, pollution, climate,
and warming. We iterated each search by changing the combinations of keywords, and used an
additional filter that restricted results to articles published in 2010 or later. We then examined each of
these initial works and the citations they contained by applying the same keyword and date of publication
filter.
We anticipated some difficulty in drawing a boundary around the set of articles identified and reviewed
for this targeted survey, as supply chain engineering is amenable to approaches from many perspectives.
Therefore, many of the works and citations could also be classified in the fields of materials science,
economics, policy, etc. We note, however, that our keyword searches were surprisingly effective.
Specifically, the term chain (as in supply chain) did not appear in works more concerned with the
physics or mechanics of cold systems. Similarly, cold (and the related terms cool, chill, and their
derivatives) were useful in targeting a level of focus on cold chains not present in papers at more policyoriented levels.

Literature Review

Cold chains are primarily used to transport and manage two kinds of products: foodstuffs and medical
goods. Raw fruits and vegetables, meats and fresh proteins, frozen processed foods, drugs, vaccines,
blood, and tissues that are sensitive to temperature variations all depend upon a dense global network of
sourcing, transportation, and storage.
James & James (2010) published an overview of the state of food cold chains and their relationship to
climate. In particular, they describe the aspects of the cold chain that affect carbon emissions and,
ultimately, climate change. They break these aspects into several steps relating to initial food delivery
(primary chilling and secondary cooling, transportation, and cold storage), and storage variations after
primary delivery (catering, retail, and domestic installations). The authors conclude that significant
energy savings and correspondingly, reductions in carbon emissions are possible across all these
stages, but that the specific details of these systems and the mechanisms by which such savings are best
achieved remain poorly understood. They note that a focus on energy efficiency in transportation and
retail cooling, in particular, could substantially impact carbon emissions that result from the current
consumption intensity of cold chains.

At the most granular level, Ingwersen (2012) provides a detailed lifecycle analysis of fresh pineapple
from production in Costa Rica to delivery to a retailer in Florida. With respect to the cold chain aspect of
this analysis, he finds that 20% of the nonrenewable energy consumption within the pineapple life cycle
can be attributed to distribution (the other 80% results from farming and packing); further, 75% of this
distribution energy consumption is due to refrigeration during transport. Overall, this refrigeration
accounts for 15% of the total carbon footprint of pineapple production, packing, and delivery. Ingwersen
notes that this carbon footprint (on average, 0.05 kg of CO2 equivalent per serving of fruit) is roughly
similar to that of other fruits, and that the cold chain aspect of fruits carbon footprint calculations is often
neglected in carrying out analysis.
Putri, Dowaki, Yudoko, & Koido (2012) perform a lifecycle assessment on a subset of the paprika
industry in Indonesia. They examine the environmental effects of switching from a conventional supply
chain to a cold chain to reduce waste and increase local profitability. As expected, the incorporation of
refrigeration increases carbon emissions by two to three times the current levels; at the same time, better
food quality and loss reduction are projected to be achieved through the change. The authors also examine
the use of a solar photovoltaic system to provide the electricity necessary to cultivate paprika, and suggest
that gains in product quality are achieved with a lessened increase in emissions. Ultimately, however, they
note that refrigeration is the biggest contributor of carbon emissions in the cold chain and is not currently
able to be directly replaced with less carbon-intensive forms of generation.

Moving from the production and distribution of specific food products to agricultural policy, Guo & Shao
(2012) suggest several macroscopic methods to achieve lower food-related cold chain emissions.
Analyzing a number of emissions inefficiencies in food-related cold chains in China from a logistics
perspective, they identify the lack of dedicated third-party cold chain logistics providers and the relative
lack of integration in different stages of production and transport. To remedy these inefficiencies, they
suggest the development of logistics providers, who are expert in cold chain operations, to optimize the
flow of temperature-controlled food. They also advocate for improving the coordination of information
between upstream and downstream service providers.

Garnett (2011) provides an analysis of potential changes by consumers in order to reduce greenhouse gas
emissions. Her work encompasses eating behavior, food choice, and changes in consumers relationship
with food. She concludes that the efforts with the greatest potential are those resulting from altering food

consumption patterns at the individual level, and notes that half of the food chains emissions occur
beyond the gate of the farms producing food; Garnett also cites the need for refrigeration (cold chain
elements) as a particular carbon emitter in the process. Solutions proposed to address this aspect of the
issue include the use of more efficient refrigeration systems in the home and a choice-based, conscious
reduction in purchasing foods that require refrigeration. Interestingly, Garnett says that the increased
demand for refrigerated foods, such as fresh produce, meat, dairy, and microwave products is due to the
mass availability of domestic refrigeration in the developed world. Because food waste has grown along
with this demand, the emissions inefficiencies are magnified by consumers relative over-purchasing of
these products relative to actual consumption. Somewhat pessimistically, Garnett cautions that even
though a reduction in emissions-intensive food purchasing would reduce demand for energy-intensive
cold chain services, the money saved through these changes would, in the cultural context described, flow
to other consumer goods and services with their own uncertain environmental impacts.
Soysal, Bloemhof-Ruwaard, Meuwissen, and van der Vorst (2012) reviewed recent quantitative work
addressing sustainable food supply chain management in a sense examining the tools most relevant to
actual supply chain design. They delineate the key objectives considered in this expansion of traditional
food supply chain management, describing both profit motives as well as the value in increasing food
quality, decreasing waste, enhancing sustainability, and developing a system for tracing food products
throughout systems. In describing these objectives the authors classify them along a progression from
traditional supply chain management to food management, and finally to sustainable food supply chain
management. They then review the modeling techniques used to address these different challenges, and
discuss several of the difficulties inherent in analyzing food systems with sustainability in mind, such as
product degradation and intractable interacting uncertainty. Most significantly, the authors point to the
evolution in both theory and practice from a traditional, single-objective profit focus in supply chain
management to a more holistic consideration of the triple bottom line, i.e. profit, people, and planet. They
address the need for multiple-objective foci if sustainability and emissions concerns are to be taken into
account, and the challenges of integrating these objectives into the globally complex food supply chain
network. They summarize by noting that industrial needs generally drive the progression towards
sustainable food chain management, and that the state of the theory in terms of academic application is
not yet sufficient for incorporating sustainability and its aims, especially waste and pollution reduction,
into actual system management. The authors conclude that advances in modeling techniques and
applications are needed to capture the new complexities and unique characteristics of multi-objective food
management systems.

The cold chain plays an important role in the wastage rate of the vaccine supply chain, and improvements
can result in reductions in this wastage rate. Vaccine wastage is an important issue for health and
vaccination program and in some cases the vaccine wastage rate is about 39% (Assi et al., 2011). This
wastage not only affects a vaccination programs efficiency, but also causes cost increases in two ways:
1) the purchasing (manufacturing) cost of the wasted vaccines that need to be replaced, 2) the cost of
vaccine disposal. As modeled and considered in several related articles, the disposal cost of wasted
vaccines is high enough that it needs to be considered in cost minimization models (Assi et al., 2011; Lee
et al., 2010).
To our knowledge, no comprehensive or specific analysis of the environmental effects of pharmaceutical
or medical cold chains has been published. While we imagine that such an analysis would yield results
similar to those discussed above for food-focused systems, the cold chains through which medical goods
are transported differ in important ways from their food counterparts. In particular, certain medical goods
particularly biological tissue and some vaccines are many times more valuable than common food
products, and therefore command much greater attention in ensuring temperature stability throughout the
logistics process. Analyzing this difference, and more generally the relationship between the value of a
product and its emissions footprint, would be a valuable contribution to the still-young body of
environmentally focused cold chain literature.

Cold Versus Traditional Supply Chain Decision-Making

Decision making in supply chain management generally has three main levels that relate to the planning
horizon:

Strategic level (long term decisions)

Tactical level (mid term decisions)

Operational level (short term planning)

This section discusses the cold chain vis-a-vis the level of the supply chain decision making, and the
financial and environmental pillars of sustainability.

4.1.1 Strategic Level

Strategic decisions in supply chain management are usually tied to long term planning. These types of
decisions are not made often, and their effects endure for long periods of, e.g., 5-10 years. Facility
location is a notable example, because once a facility is chosen for operations by renting the facility and
acquiring the equipment, building it, or buying it, it will remain operational for a long time. Strategic

level decisions require careful planning. Clearly, due to the extra costs including freezers, facility design,
location, and installed equipment, the importance of these decisions is significant for cold supply chains.

4.1.1.1 Financial dimension

The following factors influence the costs of the warehouses or distributions centers needed for cold items;
-

cooler/freezer for cold items in addition to warehouse space for regular items

special types of doors/dividers for loading docks, to reduce the temperature changes caused by
moving items

compliance regulations and certificates for cold items, such as HACCP5, USDA6, FDA7 or even
USDC8

4.1.1.2 Environmental dimension

Most of the cooling systems in current use produce GHG, or other emissions (Denholm & Kulcinski,
2004).9 Therefore, decisions should consider the environmental impacts. However, choosing appropriate
technologies and investing in the initial cost of construction can result in significant savings in operational
costs and emissions. For example, a recently opened Walmart facility in Canada cost $15 million for only
400,000 square feet, but saved 60% on energy costs, for a total cost of approximately $4.8 million over
five years. The facilitys use of hydrogen fuel cells for its 71 lift trucks has reduced the annual emission
by 55%, or almost 530 tons annually, saving $1.3 million (Doherty, 2011).

4.1.2 Tactical Level

Tactical decisions relate to mid-term planning. They include inventory policies, allocation of demand
points to warehouses/ DCs, production plans, and maintenance schedules.

Hazard Analysis and Critical Control Points

US Department of Agriculture
7
US Food and Drug Administration
8
US Department of Commerce
9
This article by the EPA addresses how to calculate the emission and the Green House Gases generated by the
refrigerators http://www.epa.gov/climateleadership/documents/resources/mfgrfg.pdf
6

4.1.2.1 Financial dimension

4.1.2.1.1 Inventory
For cold items, inventory holding cost is not only the capital investment opportunity, but also the
operational costs that are not usually included for regular items, such as electricity cost for cold
containers, inspection costs, wastage costs of expired items, etc. In some cases, the holding cost function
for cold items has a different structure from the regular supply chains (Bozorgi, Pazour, & Nazzal, 2014).
As most of the cold items are perishable, inventory models need to consider the expiration date limitation
within the regular inventory problem (Vaughan, 1994). The perishability characteristic and expiration
date also results in lowering the price for items nearing their expiration date. First-Expiring-First-Out is
an example for an unloading inventory policy that originated from the perishable nature of cold items
(Manzini & Accorsi, 2013).
Smell and light are among the environmental features that require attention in the cold supply chain
(Singh & Singh, 2005). For example, dairy products become contaminated by the presence (smell) of
meat/seafood in the same storage container. These limitations result in additional costs to maintain the
cold environment, additional constraints on holding capacity sharing decisions, and complicate the
process of inventory management.
Food products produced in facilities that also produce allergic items, such as peanuts and wheat, may
encounter market share reduction (Guru & Horne, 1999), as customers respond to negative information
on food labels (Tegene, Huffman, Rousu, & Shogren, 2003; Uchida, Onozaka, Morita, & Managi, 2014).
The market share increase for allergenic foodstuffs is predicted to reach $5 billion by 2015.10 Allergenic
products often require separate transportation or holding capacity.

4.1.2.1.2 Transportation and allocation

Transportation scheduling and allocation decisions are two other important tactical level decisions. While
the essence of routing and allocation problem is the same for both cold chain and traditional supply
chains, there are some features of the cold chain that distinguish the modeling approach for the two
named supply chains. These differences between the cold chain and regular supply chain may end up in
some modification and changes in the current models, or require developing new models.

10

http://www.packagedfacts.com/Gluten-Free-Foods-7144767/

One important difference is transportation capacity sharing. There are many examples for delivery that
shares transportation capacity, known as Less Than Truckload (LTL). LTL is commonly used for regular
items in the traditional supply chain, LTL might not be used so often for foodstuffs and medical product
cold supply chains, and if it is used, different constraints apply for the following reasons:

The temperature of holding and delivery for different cold items differs, which makes LTL
infeasible. While most vaccines are kept and transported in the temperature range of 2-8C,
frozen food must be kept below freezing. Other examples include a fresh fruit delivery truck that
cannot share capacity with a meat delivery chain, or an ice cream transporter that cannot share
capacity with a banana supplier. The fact of not being able to use the LTL approach increases the
transportation and warehousing costs because of the inability to leverage economies of scope.

Edible products that cannot be transported with other edible products due to the effects on taste
and odor. For example, a shipment of fish may not be delivered in the same space and near a
shipment of ice cream, or a dairy product.

For liquid items (both in transportation and inventory), different products may not share capacity
as a routine practice. A tanker truck cannot transport both orange juice and apple juice at the same
time. Even when both items are orange juice, one with pulp and the other without, cannot share
transportation or holding capacity.

For fresh items, or for items nearing expiration, there is a limit on the time waiting at a
transportation hub or being sent through longer routes for cost reduction purposes, which may
cause expiry.

4.1.2.2 Environmental dimension

Some environmental components in the cold supply chain do not exist, or are less important for
traditional supply chains, e.g., the emission from electricity usage by freezers/refrigerators, coolant
leakages, and the waste from expired items. Transporting cold items has the additional emission from the
refrigeration units installed on transporters to maintain constant temperature. Tassou, De-Lille, & Ge
(2009) studied the emission of food transporters, which are higher for lower-temperature food items.
Because the LTL approach may not be regularly applicable for cold items, this might lead to an increase
in the number of freezers or transporters required, which in turn results in higher emissions.

4.1.3 Operational Level

Operational decisions relate to short term planning. The general time scale for these types of decisions is
daily or weekly/biweekly.

4.1.3.1 Financial dimension

Before being sent to retail stores, items are normally inspected for shape, deterioration, temperature, etc.
Tracking technologies are used, such as Radio Frequency IDentification (RFID) (Kelepouris, Pramatari,
& Doukidis, 2007; Kim, Jeong, & Park, 2012; Prakash, Renold, & Venkatalakshmi, 2012). The result of
an inspection might produce a level degrade for fruits, or near expiration date for perishable items,
causing price reductions or implementing a policy to reduce loss. These inspections and the loss of quality
are costly (Antle, 1999; Traill & Koenig, 2010).
Packaging is another costly part of delivery, because cold items usually need to be packaged to avoid
damage/ harm, protect against small temperature changes, or other care and handling. For food items,
packaging preserves quality and prevents deterioration (Bottani, Montanari, Vignali, & Guerra, 2011) ,
yet special packaging that increases the amount of storage and shelf-space limits transportation capacity.
Facility, storage, equipment, and transport cleanliness and routine sanitation practices add more costs.
This is particularly critical for medicine, vaccine or blood that require a high level of cleanliness.
According to a report by Modern Material Handling, the operational cost in cold warehouses may be
higher than for the regular warehouses. Batteries in electrical lift trucks perform 20%-50% less efficiently
in cold warehouses.11 Some electrical devices may lose functionality in cold environments. Although
designed for reliability in cold temperatures, battery life reduces by 40%-50%.

4.1.3.2 Environmental dimension

The emission of handling cold items is higher compared with the emission of regular items. This includes
the emission from the waste (expired or defected items), which may require special treatment, e.g.,
expired vaccines or medicines containing environmentally harmful substances.

Conclusions

Globalization and the increasing density of trade networks lead to greater demand for and supply of
products across vast distances. Many foodstuffs and medical products require strict temperature controls
throughout production, transport, storage, and final sale. Environmental consideration of the uniqueness
of cold supply chains from an emissions perspective no longer can be ignored.

11

http://mmh.com/images/site/MMH1201_BestPrac_ColdStorage.pdf

In surveying the recent cold supply chain literature, we found that most papers focus on cold chains
specifically, or on emissions from a broader supply chain perspective. Few of the former dealt with
greenhouse gas pollution, and few of the latter addressed or mentioned cold chains specifically. In
addition, we noted a relative paucity of studies in the industrial or systems engineering domain. Most
papers considered here tilted towards either a materials engineering or an economic policy concentration;
indeed, the work by James and James (2010) used as the starting point for our survey was the most recent
comprehensive paper addressing cold supply chains and emissions specifically. We believe that these
convergent trends: greater attention to energy- and emissions-efficient refrigeration systems from an
engineering perspective, and an emphasis on greener, less emissions-intensive systems from the
perspectives of macro- and microeconomic policy as well as industrial organization, provide the ideal
conditions for new research on related topics. We suggest that the subfield of cold supply chain
management stands to benefit from the confluence of these trends. We depict our conception of this
possible convergence in Figure 1.

Figure 1: Convergence of complementary emissions-reduction research streams on the field of cold chain
management within the field of supply chain engineering
To date, there has been little discussion of parallel issues relating to medicines, vaccines, blood, and
tissues transported by cold chains. We believe that the fundamental differences between cold chains
transporting these medical goods and food-focused systems merit independent examination within the
context of their emissions and energy consumption. For example, medical goods are subject to more
stringent regulation than food products, thus requiring more care to avoid spoilage and degradation during
transport allow for fewer and less extreme deviations from optimal temperatures and potentially demand
more energy-intensive cooling technologies. In addition, logistical networks of medical goods restricted
to facilities that produce, process, and receive such goods will require cold chains having different

network characteristics and corresponding opportunities for emissions reduction. We suggest an analysis
of the subfield of cold chains used to handle medical goods may reveal behaviors and results substantially
different from those already known. As both commerce and emissions increase in global cold supply
chains, academic research must expand to assist engineers and decision-making regarding economic cost
control and environmental sustainability.
These results point to a simple conclusion: more work on the environmental and emissions impacts of
cold supply chains is needed. These elements of the worlds logistical superstructure are fundamentally
different and distinct from their room temperature counterparts, and their study could reveal real
opportunities for impactful change system design and execution. These innovations are needed more and
more as both commerce and emissions grow, and the need to balance financial and environmental
concerns becomes ever more urgent.

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