Industries like food, pharmaceuticals, and biotechnology depend heavily on cold chain logistics to safely and efficiently transport temperature-sensitive products. When third-party logistics (3PL) providers manage this process, businesses gain access to a wide variety of benefits. But what is involved, and how much does it cost?
What Is Cold Chain 3PL?
Cold chain shipping makes sure that products requiring strict temperature control remain within specified temperature ranges throughout transport and storage. However, handling all the routing, docking, warehousing, and additional cold chain details without delays or product loss can be overwhelming on your own. That’s where an experienced 3PL partner comes in.
3PL providers manage every aspect of this process, including temperature-regulated warehousing and real-time tracking. By trusting a 3PL company with the process, suppliers can allocate their internal resources more efficiently and focus on delivering superior products and customer experiences.
Cold chain logistics services are particularly important in sectors where product integrity is non-negotiable:
- Food and beverage: Prevent spoilage of perishable items like dairy products, meat, produce, frozen goods, and even pet food.
- Pharmaceuticals: Maintain the efficacy of vaccines, biologics, and other drugs.
- Chemical products: Protect industrial chemicals that degrade under temperature fluctuations.
Features of Cold Chain 3PL Services
Temperature Monitoring and Control
Continuous tracking systems keep goods within their designated temperature ranges. Alerts can trigger immediate corrective actions.
Specialized Packaging
Insulated containers and gel packs provide additional protection against temperature fluctuations during transit.
Multi-Modal Transportation
Options include refrigerated trucks (reefers), ocean containers, rail transport, or air cargo depending on the delivery timeline and destination.
Warehousing and Distribution
These vital parts of the cold chain include temperature-controlled storage, often with designated zones for frozen, refrigerated, and ambient goods.
Regulatory Compliance and Documentation
3PL providers must guarantee compliance with safety standards, such as those laid out by the FDA and the Food Safety Modernization Act. A high-quality logistics company will maintain detailed records for compliance audits.
Factors Influencing Cold Chain 3PL Pricing
The cost of cold chain services varies based on several factors. Let’s break it down.
Temperature Requirements
Goods that require ultra-low temperatures (e.g., vaccines) typically incur higher costs due to specialized equipment like deep freezers or dry ice systems.
Shipment Size and Volume
Smaller shipments may cost more per unit due to reduced economies of scale, while large volumes benefit from freight consolidation.
Transportation Distance and Routes
Longer distances increase fuel and labor costs. Routes to remote or underserved areas often add expenses.
Transportation Mode
Air freight is faster but significantly more expensive than ground or ocean freight shipping. Companies must balance speed with cost considerations.
Specialized Handling Requirements
Fragile items, hazardous materials, or products requiring specific humidity levels often demand extra care, which can lead to higher prices.
Seasonal Demand and Market Fluctuations
High demand during peak seasons, such as holidays or vaccine rollout periods, can drive up rates due to limited capacity.
Value-Added Services
Services like insurance, expedited delivery, and advanced tracking systems also influence the final price.
Common Cold Chain Logistics Expenses
When using cold chain logistics companies, you should budget for two primary categories of expenses: fixed and variable costs.
Fixed Costs
Also called capital or standing costs, fixed costs remain the same in the short term—typically for a year—regardless of the output volume, quantity, or transport distance. Every cold chain logistics provider will have fixed costs for:
- Employee wages
- Equipment costs
- Truck/vehicle payments
- Warehousing fees
- Insurance fees
Variable Costs
On the other hand, variable costs, also called recurrent, running, or operational costs, will change depending on volume, quantity, and distance. These costs have to do with the amount of resources the provider must use to make the shipment. Variable costs include:
- Supplies necessary for production
- Piece rate labor
- Billable employee wages
- Fuel for trucks (pricing varies by state and distance)
- Credit card company fees
Additional Costs
Beyond typical fixed and variable costs, there are several additional expenses, also called accessorial charges, to consider. To avoid paying higher fees than expected, be sure to watch for the following potential costs:
- Re-consignment cost: Per-mile fee decided at the time of the initial quote.
- Lumper fees: Vary based on third-party unloading provider.
- Excess cargo insurance fees: Vary based on freight value, travel distance, and other factors.
- Over-dimensional (OD) freight fees: Vary based on cargo dimensions, necessary permits, final destination, and more.
- Specialty equipment expenses: Depends on what pallet jacks, edge protectors, straps, wraps, and other equipment you’ll need.
- Truck order not used (TONU) fees: Range from $200 to $600 (potentially more for specialized trailers).
- Stop charges: Per-stop delivery rate of $50 to $100.
- Layover fees: Flat fees that range from $150 to $750 based on equipment and length of delay.
- Driver detention compensation: Also for delays, with a per-hour cost of $50 to $150.
- Driver assistance fees: $100 to $250 when drivers help unload.
- Tarping charges: $100 to $150 to cover goods on open trailers.
- Tanker endorsement fees: Approximately $250 for transporting liquids.
- Hazmat fees: $150 to $200 for transporting hazardous materials.
You can minimize accessorial cold chain supply logistics fees by planning ahead and working with the right logistics partner.
Why Partner with Cold Chain Logistics Companies?
Outsourcing cold chain logistics to a specialized 3PL provider offers benefits that outweigh the challenges of managing such operations in-house.
- Cost savings: 3PL providers spread infrastructure and technology costs across multiple clients, which enables businesses to access resources at a fraction of the investment required for in-house management.
- Expertise: Experienced 3PL providers navigate the complexities of cold chain logistics with precision, from selecting the right packaging to optimizing multi-modal routes.
- Scalability: Whether a company needs to ship seasonal products or accommodate sudden demand spikes, 3PL providers can scale their operations to meet evolving needs.
- Visibility and control: Many cold chain logistics companies offer real-time tracking and reporting tools, which provide full visibility into the shipment’s status and enable swift responses to issues.
How Mulder Brothers Can Streamline Your Cold Chain
As a trusted partner for cold chain shipping solutions, Mulder Brothers brings reliability and expertise to businesses in need of 3PL services. Here’s how we stand out:
- Tailored strategies: We work closely with our clients to develop logistics plans that align with the specific temperature and delivery requirements for their products.
- National network: We leverage partnerships with leading carriers and warehousing partners to deliver seamless service across local, regional, and national levels.
- Transparent pricing: Our approach to 3PL pricing makes sure that clients understand the cost structure and eliminates surprises.
- Advanced monitoring: Real-time temperature tracking and status updates offer peace of mind.
Whether you need to ship frozen foods, temperature-sensitive pharmaceuticals, or perishable industrial goods, Mulder Brothers is here to help with industry-leading cold chain solutions that prioritize your business.
The Cold Chain Partner You Can Trust
If your business needs a partner you can trust for cold chain logistics, contact the experts at Mulder Brothers today. We’ll help you confidently navigate the complexities of temperature-controlled shipping.