In order to improve the economic information available to industry participants, the Global Cold Chain Alliance has commissioned a Cold Chain Index (CCI), reported since the end of 2018. The CCI tracks the growth rates of costs associated with cold storage using predominantly official sources of economic data.
The CCI can be customised to the region, state, and metro where a warehouse facility operates. The CCI includes five classes of expenses: labor, electric power, supplies, repairs and rent.
Property rent or lease was the largest share of expenses, at 45% of the total. Labour represented 34% of total expenses. Electric power accounted for 9% of total expenses. The “other” category included the leases on material handling equipment, expenses on utilities other than electric power, and un-specified other expenses.
The cost shares used in all 2022 releases of the CCI are based on the 2021 IARW Productivity and Benchmarking Survey results (FY2020). In the current release, the CCI reports the growth rate in expenses in the second quarter of 2022 compared with the second quarter of 2021.
Members of the Global Cold Chain Alliance and their customers may access a template to better understand the index and customise cost shares to the experience of their business, and to account for variation across geographic regions.
Negotiated rates for providing third-party logistics services such as storage and shipping of perishable foods between cold storage warehouses and customers have been challenged as arbitrary.
Achieving annual rate changes from customers reflective of the shifting costs of operating refrigerated warehouses can be challenging when using indices that do not accurately reflect the cold storage businesses.
The index tracks the growth rates of costs using predominantly official sources of economic data along with actual expense classes from the IARW Productivity and Benchmarking tool.
To download the full report freely available, click here.