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GCCA Cold Chain Index
A GCCA Program designed to provide justification during rate negotiation
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.
In order to improve the economic information available to industry participants, the Global Cold Chain Alliance has created a Cold Chain Index (CCI). The Cold Chain Index is a customizable "rate builder" template that members can provide justification to their customers during rate negotiations.
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. The CCI can be customized to the region and state where a warehouse facility operates and includes five classes of expenses: labor, electric power, supplies, repairs and rent.
“GCCA’s Cold Chain Index is a valuable tool for third-party warehouses – and their customers, such as food retailers and wholesalers – in contract negotiations that reflect actual costs of the major inputs for producing the 3PL services – labor, electric power, rent, supplies, and repairs,” says Jason Troendle, Director of Market Intelligence & Research. “Today’s 3PL services are not commodities; they are tailored in many cases to specific customers, and many 3PLs are offering value-added services such as case picking, blast freezing, GDP Audit Certification, SQF Certification, and much more. The CCI helps purchasers of 3PL services understand the basic costs and it’s up to the 3PL to discuss the ROI of the value-added services.”
Frequently Asked Questions
How does the Cold Chain Index differ from the PPI?
The PPI (Producer Price Index) measures how much an industry raises its prices on output. For example, if the PPI for the industry is up 3.2%, that is just passing through the cost increase that it faced (according to our CCI of 3.2% for the nation). If over a long period of time, we see a CCI that is lower than the PPI, that would suggest that the industry is absorbing cost increases rather than passing them through.
How do I set the template to my geographical location?
Step 1: select region
Step 2: select state
Step 3: select metro area
How do I check the index for facilities in different regions, states or cities?
If you use the template for one region, then want to examine states and/or cities in aa different region; revise the region first and then be sure to revise the state and metro area selections accordingly because the template will not automatically reset.
What is the rationale behind the Cold Chain Index?
Cold storage warehouse rates are commonly questioned and/or challenged. The cold chain index is a customizable “rate builder” template that members can use to provide justification to their customers during rate negotiations. The index is based on published data from U.S. official sources and parameters obtained from the 2016 Productivity and Benchmarking Report.
What variables make up a rate?
Rates cover the variable costs of operations (labor, power, supplies, other inputs).
Rates contribute to the capital invested in the plant, property, and equipment.
Rates allow for return to owners’ equity and risk-taking (profit).
Where do the original Cost Share percentages come from?
Cost share percentages of Labor, Rent, Supplies, and Maintenance were derived from the input in to the GCCAs FY2018 Productivity and Benchmarking Report (PBR).
Participate in the IARW Productivity and Benchmarking Report Online Platform
The 2020 survey will open in January 2020. Participate within the specified timeline to receive complimentary Premium Access, a value of $595 per warehouse.
Please email us at email@example.com expressing your interest in participating. We will then send you an invitation with more details, including your username (your email address) and a temporary password, which you will be prompted to change on your first login. For all subsequent logins, simply go to https://benchmark.gcca.org and enter your username and password. If you are a returning user but have forgotten your password, simply select the "Click here if you have forgotten your password" to reset it.
*New in 2019! Participants reporting on 10 or more facilities may be eligible to receive a customized spreadsheet to input new or update data recording from the previous year. The data may then be returned to be uploaded in to the system. Contact firstname.lastname@example.org for additional information and eligibility.
To learn more about the IARW Productivity and Benchmarking Tool and Executive Summary, click here.