By Dr Ernst van Biljon, dean of research and programme co-ordinator of the MCom in supply chain management at the IMM Graduate School
Why demand volatility has become the cold chain’s greatest challenge.
programme co-ordinator of the MCom in supply
chain management at the IMM Graduate School. Supplied by IMM Graduate School
For decades, cold chain professionals have focused on protecting perishable products from physical disruptions. Equipment failures, transport delays, power outages and shipping bottlenecks have traditionally been viewed as the greatest risks to maintaining product quality and integrity.
Those risks remain. But a growing body of thought suggests that the industry’s greatest challenge may now lie elsewhere. The real threat is no longer simply keeping products cold. It is keeping pace with increasingly unpredictable demand.
We have entered the ‘Shockwave Economy’ – a world where successive waves of geopolitical, climatic and economic shocks are reshaping supply chains faster than organisations can adapt.
Ahead of this year’s SAPICS Conference in Cape Town, I have been reflecting on how demand volatility has become a greater strategic threat than supply disruption itself.
For the cold chain, that message carries particular significance:
The cold chain cannot simply wait.
Unlike many other supply chains, the cold chain operates against the clock. Fresh produce continues to ripen. Meat and dairy products have limited shelf lives. Vaccines, biologics and temperaturesensitive medicines require tightly controlled conditions from manufacture to administration. Every hour matters.
We have seen this recently, with South African fresh produce exporters having several containers stuck at ports or in transit in the Middle East due to the conflict in that region.
When demand changes unexpectedly, the consequences extend well beyond delayed deliveries. Overestimating demand can leave distributors holding expensive inventory with a shrinking shelf life, leading to waste, markdowns or disposal.
Underestimating demand can result in empty shelves, interrupted exports, shortages of critical medicines or lost customer confidence.
In other words, volatility itself has become a food safety, quality and commercial risk.
Recent years have demonstrated how quickly international events can reshape supply chains. Conflict in the Middle East, changing tariff policies, disrupted shipping lanes and the rerouting of vessels around the Cape of Good Hope have all affected global logistics.
Yet the disruption rarely ends there. Retailers increase orders to protect themselves. Consumers begin buying differently. Exporters seek alternative markets. Distributors build precautionary inventories.
These reactions frequently generate the well-known bullwhip effect, where relatively small changes in consumer demand become progressively amplified throughout the supply chain.
For refrigerated logistics, that amplification can be particularly damaging. Every unnecessary pallet occupies valuable cold storage capacity, consumes energy and reduces operational flexibility.
Conversely, unexpected demand spikes can leave warehouses, transport fleets and processing facilities unable to respond quickly enough.
The challenge is therefore no longer simply preserving temperature. It is matching capacity to demand in an increasingly unpredictable marketplace.
EFFICIENCY ALONE IS NO LONGER ENOUGH
For years, cold chain operators have pursued lean models focused on minimising inventory, optimising routes and driving down costs. Under relatively stable trading conditions, that approach delivered impressive efficiencies.
But the world has changed.
I believe many organisations now need to rethink the relentless pursuit of efficiency at all costs. In an era defined by volatility and disruption, flexibility has become a competitive advantage.
That requires accepting what I call a ‘certainty premium’ – a deliberate investment in continuity and preparedness.
It means carrying strategic inventory, diversifying supplier bases, strengthening regional sourcing networks and building greater flexibility into distribution systems.
While these measures may increase costs in the short term, they provide something far more valuable: the ability to continue serving customers when disruption strikes.
For cold chain operators, this may also mean investing in additional refrigerated capacity, alternative transport options, contingency power systems and more flexible distribution models.
Real-time monitoring has long been associated with temperature compliance, but its role is expanding rapidly.
IoT-connected refrigeration systems, telematics, warehouse management platforms, predictive analytics and artificial intelligence increasingly enable companies not only to monitor product temperatures but also to identify emerging demand patterns, anticipate shortages and optimise inventory before problems escalate.
In this environment, digital visibility becomes more than an operational convenience. It becomes a strategic capability.
The organisations that can detect changing demand earliest are often those best positioned to protect product quality while maintaining service levels.
FLEXIBILITY PROTECTS MORE THAN PRODUCTS
For South Africa, the discussion comes at an important time.
The country plays a vital role in exporting fruit, meat, wine and other temperature-sensitive products while also importing pharmaceuticals and specialised foods.
At the same time, regional trade opportunities under the African Continental Free Trade Area (AfCFTA) are creating new possibilities for developing shorter, adaptable supply networks across the continent.
Building robust cold chains is therefore about far more than reducing commercial risk.
It strengthens food security. It protects public health. It reduces food waste. It safeguards export competitiveness.
And it helps ensure that temperature-sensitive products reach consumers in the condition intended.
As demand becomes more volatile, the organisations that thrive will be those capable of anticipating market shifts before they become operational crises.