European cold storage space extremely limited amid sky high demand
Demand for cold-storage space in Europe has surged after foodservice sales channels closed during the pandemic, leaving their suppliers hunting for new customers or somewhere to store the unsold food, Bloomberg reports.
Farmers, manufacturers and retailers in the bloc reportedly say it’s nearly impossible to find commercial fridge and freezer space. The situation is forcing production cuts and could result in high levels of waste.
Lineage Logistics, the world’s largest temperature-controlled logistics provider, says more than 90% of its cold-storage facilities in Europe are already full.
Meanwhile, in the U.K. there’s barely any room left at all, according to Shane Brennan, chief executive of the Cold Chain Federation.
The supply-chain disruptions saw the European Commission last week lower its projections for trade with the rest of the world even further, with exports of goods and services this year set to drop as much as 15%.
A recovery in demand and return to normal shipping trade flows will be key to resolving the cold-storage crunch, given the bloc’s status as a net exporter of many food items, said Matteo Iagatti, a supply-chain specialist at the food and agri-research center with Rabobank.
“Shipping cancellations will continue in June and through the entire second and possibly the third quarter this year,” Iagatti was quoted as saying.
“This will be a decisive factor that leaves more food stuck in Europe, increasing the system congestion and pressuring food prices further.”