Create Beach Consulting believes that the circulation of agricultural products will inevitably strive towards process-oriented, automated, and standardized methods.
In recent years, with the continuous development of China's agricultural product circulation industry, various circulation methods have emerged, which in turn have put forward higher requirements for the development of agricultural product warehousing and logistics. The state has given high importance to the development of agricultural product cold chain warehousing and logistics in recent years, with the central document No. 1 emphasizing multiple times the need to accelerate the construction of agricultural product cold chain logistics systems to promote agricultural product circulation. In the "Logistics Industry Adjustment and Revitalization Plan" released in 2009, it explicitly states the need to improve cold chain logistics facilities for the storage, processing, transportation, and distribution of fresh and live agricultural products, and increase the proportion of refrigerated transportation for these products.
Cold chain logistics for agricultural products refers to the systematic project that ensures cold storage items are maintained at regulated low temperatures throughout all stages from production, storage and transportation to sales and consumption, to preserve their quality and performance. Currently, the cold chain logistics industry for agricultural product distribution is flourishing, albeit it is relatively backward in terms of equipment and technological methods, and faces numerous constraints for development. However, with the increasing globalization of agricultural product distribution, the cold chain trend in agricultural product logistics will become an inevitable development trend.
Current Status of Cold Chain Storage and Logistics in China's Agricultural Product Distribution
(1) The Main Modes of Agricultural Product Distribution and Storage Logistics in China Since the establishment of the first agricultural product wholesale market in China in 1984, the distribution channels have evolved from spontaneous germination, rapid development, blind expansion, to standardized development, and now to a qualitative improvement stage. The distribution channels centered around agricultural product wholesale markets have become the primary mode of agricultural product distribution in China. Simultaneously, the distribution channels centered around rural markets also play a significant role in the circulation of agricultural products in China.
However, as an important channel for the circulation of agricultural products in our country, wholesale markets and farmers' markets are relatively backward in terms of logistics and warehousing. The entire process of agricultural products passing through wholesale markets, except for some imported agricultural products and those that must be transported in a cold chain environment, the vast majority of agricultural products are circulated under normal temperature conditions, with a very low proportion using cold chain logistics. Directly from the production area to farmers' markets, agricultural products also generally do not adopt cold chain transportation. Statistics show that due to the lagging development of cold chain warehousing logistics, the export volume of vegetables and fruits in our country accounts for only 1-2% of the total, and 80% of them are primary products, lacking competitiveness in the international market. Post-harvest losses of agricultural products in our country are severe, with the rates of spoilage in the circulation of vegetables, fruits, meats, and aquatic products reaching 20-30%, 12%, and 15%, respectively. The annual losses of vegetables and fruits alone exceed 100 billion yuan.
(II) Development of modern agricultural product circulation and current status of cold chain warehousing and logistics
As the globalization trend of agricultural product circulation becomes increasingly prominent, the supply chain of agricultural products is gradually extending, and the circulation of agricultural products is gradually developing towards modernization. The main characteristics are as follows:
Chapter One: Facility Standardization. The modern circulation of agricultural products has raised higher requirements for facility standardization. This applies to agricultural product wholesale markets, circulation enterprises, retail businesses, and distribution centers, including facilities such as cold storage, transportation vehicles, pallets, and display coolers, all of which must reach a certain level of standardization.
Chapter Two: Product Packaging. The grading and packaging of products is one of the important characteristics of modern circulation. As the industry standards for agricultural product circulation are gradually refined, production enterprises, processing enterprises, and others will refer to the grading and packaging standards set by relevant departments to classify agricultural products, which is conducive to strengthening the standardized management of business practices, advancing packaging and labeling management, and providing a foundation for the establishment of a traceability system.
Chapter Three: Cold Chain Logistics. As the living standards and consumption capacity of residents improve, the demand for the quality of agricultural products also gradually increases, making the development of cold chain logistics for agricultural products an inevitable trend. In developed countries such as Europe, the United States, Canada, and Japan, the cold chain circulation rate for meat and poultry has reached 100%, while the cold chain circulation volume for vegetables and fruits has also reached over 95%.
Chapter Four: Digitalization of Information. The modern circulation of agricultural products will gradually achieve the digitalization of information, including the digitalization of trading methods, as well as the digitalization of information collection and dissemination.
As China's agricultural product distribution system gradually becomes standardized and improved, the channels for the circulation of agricultural products in urban and rural areas are also increasing. Since the 1990s, foreign supermarkets have started to enter China, propelling the modernization of our country's agricultural product distribution. A new distribution channel centered around supermarkets has begun to emerge. On this basis, various distribution methods have started to emerge, such as "farmer + distributor + supermarket," "agricultural product base + supermarket," and "agricultural product wholesale market + supermarket," and so on. These distribution methods, as the new forces in China's modern agricultural product distribution industry, have become a powerful supplement to the mainstream distribution methods centered around agricultural product wholesale markets. This indicates that the future of agricultural product distribution will feature a coexistence of multiple distribution channels.
With the rise of various agricultural product distribution channels, the cold chain warehousing and logistics industry for agricultural products has also begun to develop. A significant proportion of distribution methods at the supermarket end use cold chain logistics, and for certain categories such as seafood, meats, and dairy products—products prone to spoilage—the ratio of transportation and retail segments equipped with refrigeration and freezing facilities has reached nearly 100%.
Overall, China's modern cold chain storage and logistics for agricultural products are relatively underdeveloped. Key logistics nodes such as large-scale agricultural product wholesale markets and regional distribution centers lack freezing and refrigeration facilities, primarily facing the following constraints:
Overall, the consumption capacity of Chinese residents is low, and the cost of cold chain investment is substantial. Firstly, China's per capita income is low, ranking 124th globally with only $3,600 per capita in 2009, as per the World Bank's rankings, far behind Japan's $37,800 and the U.S.'s $42,240. Secondly, the wealth gap in China is significant; the top 20% of urban residents own 66.4% of financial funds, while the bottom 20% possess only 1.3%. Due to the vast income disparity, wealth is concentrated in the hands of a few, and true consumption power requires the participation of the majority. The cost of investing in cold chain is high; distributors or processing enterprises must pass on part of the cost to consumers to ensure their profits, but the low consumption capacity of Chinese residents greatly hampers the enthusiasm for adopting cold chain in the middle links of the agricultural product distribution chain. This, in turn, restricts the development of agricultural product cold chain logistics and warehousing.
Our country's cold chain logistics and storage technology lags significantly behind that of foreign countries. In terms of the development level of cold chain storage logistics, there is a considerable gap between China and foreign nations, primarily in the transportation phase. The domestic-made车载freezing units have a significant gap in lifespan and energy efficiency compared to those abroad. Currently, most of China's high-end车载freezing units are imported from developed countries like Japan and the United States.
Our country has insufficient research on the standards for agricultural product cold chain storage and logistics. Relative to other areas, China's research on agricultural product cold chain logistics and storage has been relatively inadequate, lacking systematic national and industry standards. On March 1, 2010, the national standards "Logistics Packaging, Labeling, Transportation, and Storage of Frozen Food" and "Logistics Packaging, Labeling, Transportation, and Storage of Refrigerated Food" were implemented, marking the beginning of China's journey towards "breaking the ice" in the standardization of cold chain logistics management. However, these two standards are only recommended and do not have mandatory requirements for enterprises and products. In terms of industry standards, only a few specific product types have established cold chain logistics standards, such as "Guidelines for Storage, Refrigeration, and Transportation of Cucumbers," "Guidelines for Refrigeration and Refrigerated Transportation of Cauliflower," and "Guidelines for Refrigeration and Refrigerated Transportation of Tomatoes."
(4) According to data from the National Development and Reform Commission, China's agricultural product distribution cold chain storage and logistics infrastructure is weak. On average, per capita cold storage capacity is less than 10 kilograms, and the volume of refrigerated transportation by truck only accounts for 20% of the total. The proportion of refrigerated transportation by rail is also less than 10%, indicating a very fragile cold chain infrastructure. When looking at various categories, there is a surplus of meat cold storage facilities, while there is a lack and backwardness in the construction of vegetable and fruit cold storage. The high investment required for cold chain is one of the key reasons for the weakness of cold chain storage facilities. Investing in cold chain logistics and storage equipment inevitably increases costs, for instance, the construction cost of a medium-sized refrigerated warehouse is approximately 2-3 times that of an equally sized ambient temperature warehouse. Particularly, the cost of building ultra-low-temperature refrigerated warehouses is twice that of general cold storage facilities, with some reaching tens of millions.
Three, Future Outlook of Cold Chain Storage and Logistics in China's Agricultural Products Distribution China is a major producer and consumer of agricultural products. Currently, vegetable production accounts for about 60% of the global total, while fruit and meat production each account for 30%, and poultry eggs and aquatic products production for 40%. In recent years, the output of fresh agricultural products in China has grown rapidly, with about 400 million tons entering the distribution sector annually. The regional and variety layout of agricultural products has been increasingly optimized, and the distribution of agricultural products has shown characteristics of large scale, long distance, and off-season. This has raised higher demands for the scale and efficiency of agricultural product logistics services, urgently necessitating the acceleration of cross-regional preservation and transportation of agricultural products and further improvement of low-temperature storage and preservation levels. Cold chain logistics and warehousing have become an important trend in the future development of agricultural product distribution.
Enhancing the cold chain warehousing and logistics system is a crucial direction for the circulation of agricultural products.
Policies have been implemented to strongly support the development of the cold chain warehousing and logistics system. Both the central government's Document No. 1 in 2009 and 2010 emphasized the need to accelerate the construction of agricultural product cold chain logistics systems to promote the circulation of agricultural products. The "Adjustment and Revitalization Plan for the Logistics Industry" released in 2009 explicitly called for the improvement of cold chain logistics facilities for the storage, processing, transportation, and distribution of fresh agricultural products, and to increase the proportion of chilled transportation for fresh agricultural products. Local standards for cold chain logistics have been successively promulgated and implemented. In 2010, the National Development and Reform Commission issued the "Development Plan for Agricultural Product Cold Chain Logistics," proposing to establish a cold chain logistics technical system guided by the market and led by enterprises. It aims to formulate and promote cold chain logistics norms and standards, accelerate the construction of cold chain logistics infrastructure, cultivate a group of cold chain logistics enterprises, and form an integrated cold chain logistics service system with advanced facilities, standardized management, sound networks, and full-process control. This is to reduce post-harvest losses of agricultural products, promote farmers' income, and ensure the quality and safety of agricultural products for consumption.
2. The corporate awareness is undergoing a shift, with many actively experimenting. Currently, agricultural produce wholesale markets, distribution centers, and agricultural enterprises all recognize that cold chain logistics for agricultural products is the direction for the future. They are increasingly constructing cold storage facilities, equipping with refrigerated vehicles, and vigorously developing cold chain logistics. Companies like Sinotrans and COFCO, as socialized third-party logistics providers, are establishing international-level cold chain facilities and management systems, actively expanding their cold chain logistics business; food producers like Zhengpin and Bright Dairy & Food have established independent accounting cold chain logistics companies to refine their cold chain networks; large-scale chain retailers are also accelerating the development of fresh food distribution. China's cold chain logistics enterprises are showing a trend of networking, standardization, scaling, and group development.
3. Enhancing cold chain warehousing and logistics is a necessity for economic globalization. Developed countries like Europe, the U.S., Canada, and Japan have already achieved a 100% cold chain circulation rate for meat and poultry, with over 95% for vegetables and fruits. To align with international development, China must vigorously develop its agricultural product cold chain logistics.
(II) Policies and standards for cold chain warehousing and logistics will increasingly become refined.
Foreign cold chain logistics technology has gradually entered the domestic market and begun to be promoted. Fresh produce exporting companies have taken the lead in introducing international management technologies such as HACCP (Hazard Analysis and Critical Control Points) and GMP (Good Manufacturing Practices), achieving full-range low-temperature control. Large-scale meat slaughtering enterprises have started to apply international cold chain logistics technology, beginning with low-temperature processing in slaughtering, cutting, and cooling maturation stages, and gradually extending to storage, transportation, wholesale, and retail, moving towards full-range low-temperature control.
China's relevant authorities have recognized the issue of policy and standard deficiencies in the cold chain logistics and warehousing industry and have begun actively working on establishing them. By the end of 2011, China will complete the formulation of five national standards in areas such as cold chain operations, cold storage management, corporate evaluation, and operational specifications for aquatic and livestock products. Local departments have also begun actively participating in the formulation of various standards. The Shanghai Commission of Economy and Trade has compiled the "Technical and Management Standards for Food Cold Chain Logistics," which was implemented in Shanghai in October 2007, marking the first local standard in China for the regulatory management of cold chain logistics. Hebei Province also issued the "Technical and Management Standards for Food Cold Chain Logistics" in 2010, among others.
(3) The cold chain warehousing and logistics sector will move towards intensification and energy efficiency. Intensification is a key direction for the development of cold chain logistics and warehousing, serving as a crucial means to enhance transportation and warehousing efficiency and reduce circulation costs. Cold chain warehousing and logistics will further optimize processes and improve management efficiency through multi-product, multi-enterprise storage and distribution methods. In the development of agricultural product cold chain logistics and the construction of fresh produce distribution centers, energy conservation is also a significant factor to consider, particularly in the transport, storage, and sales of meat, seafood, and other agricultural products. To improve cold chain processing capabilities and gradually reduce the occurrence of "breaks in the chain," strengthening cold chain connections and reducing cold losses are essential. Energy conservation in the cold chain is primarily reflected in the refrigeration system, where the energy consumption and operational economy of the system significantly impact the company's operational costs. The International Refrigeration Institute requires that within the next 20 years, the energy consumption of each refrigeration device should be reduced by 30-50%. Therefore, independently developed, introduced, and absorbed new cold chain logistics technologies that prioritize energy efficiency and environmental protection, along with the use of energy-saving materials, will become the main focus of cold storage and insulated vehicle technology development. Noiseless and pollution-free cold plate refrigeration technology will become the mainstream refrigeration method in the future. For example, defrosting technology with thermal fluorine is beginning to be explored domestically and will become one of the effective energy-saving techniques for refrigerated warehouses using fluorine as the refrigerant. As a new green light source, LED lights have already been used in large-scale cold storage facilities domestically, offering over 80% energy savings compared to traditional lighting.
(IV) The operational standards and norms for cold chain warehousing and logistics technology are gradually being established. Local governments and enterprises are increasingly focusing on the cold chain logistics technology for agricultural product circulation, conducting research on insulation and temperature control technologies throughout the entire process, and on information technologies for full-process monitoring. The technologies for transferring and storing via railway, highway, waterway, and aviation transportation methods, as well as multi-modal transportation storage technologies, are already being promoted and applied. To achieve effective energy conservation in agricultural product cold chain warehousing and logistics, higher standards and norms for technical operations are required, which in turn demand a higher level of management for standardized processes. Therefore, it is imperative to build a well-planned, well-equipped, upstream and downstream connected, functionally complete, standardized, and well-regulated agricultural product cold chain logistics service system to propel the development of the industry towards standardization and normalization.
