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By: Professor Luay Jreissat – Faculty Member, College of Administrative Studies, Arab Open University – Jordan; Expert in Supply Chain Management and Marketing

1. Executive Summary

The logistics service sector and cold chain in Jordan are at a critical turning point, driven by rising food imports, expanding agricultural exports, and structural shifts in retail and e-commerce demand. Despite this growth, the country faces a persistent supply gap in integrated, multi-temperature cold chain infrastructure, resulting in inefficiencies, food losses, and increased logistics costs.

This policy memo supports the development of a modern, integrated cold chain logistics hub that combines temperature-controlled storage, transportation, and value-added services. The analysis concludes that such investment is strategically viable and economically justified, provided it is implemented through a phased approach supported by enabling public policies.

2. Strategic Importance of Cold Chain Development

Cold chain infrastructure is a fundamental driver of food security, trade competitiveness, and export diversification. In Jordan, its importance is amplified by several structural conditions:

• High reliance on food imports, making efficient storage and distribution essential for price stability and supply security
• Increasing exports of fruits, vegetables, and processed foods to GCC countries and regional markets
• Rising demand from supermarkets, HoReCa (hotels, restaurants, catering), and digital platforms
• Significant post-harvest losses due to weak temperature-controlled logistics systems

3. Market Context and Key Challenges

Jordan's logistics sector is valued at over USD 1 billion, with cold chain logistics among the fastest-growing segments. However, several structural challenges persist:

• Fragmented and non-integrated cold chain networks
• Limited availability of multi-temperature storage facilities
• Heavy reliance on road transport with inconsistent temperature control
• High operating costs, particularly energy-intensive refrigeration systems
• Shortage of skilled professionals in cold chain and logistics
• Uneven infrastructure development beyond the Amman–Aqaba corridor

4. Opportunity for Integrated Cold Chain Development

The proposed investment addresses these gaps through the establishment of a fully integrated cold chain hub, including:

• Multi-temperature storage for the food sector
• Pre-cooling, processing, and consolidation services
• Sorting, grading, and packaging (SGP) facilities
• Refrigerated transport and distribution networks
• Digital logistics systems (WMS, blockchain tracking, IoT)

This model transitions the sector from fragmented operations to a coordinated, high-efficiency logistics system. Key opportunities include:

• Meeting unmet domestic demand for cold storage
• Expanding regional trade services to Iraq and GCC markets
• Supporting agricultural export growth and reducing post-harvest losses
• Enabling e-commerce and modern retail logistics expansion

5. Economic and Investment Rationale

The investment is commercially attractive due to diversified revenue streams, including core storage fees and higher-margin value-added services. While capital intensity is high, profitability improves significantly through:

• High warehouse utilization rates
• Long-term contracts with anchor clients (importers, retailers, exporters)
• Expansion of value-added logistics services
• Operational efficiency gains through technology adoption

6. Policy Recommendations

To maximize the impact of cold chain investment, the following policy actions are recommended:

• Develop a national cold chain strategy aligned with food security and trade policy
• Incentivize private sector investment in integrated logistics hubs
• Strengthen training programs in logistics, food safety, and warehouse automation
• Accelerate digitalization of logistics systems (WMS, tracking, customs integration)
• Support energy efficiency initiatives in cold storage through renewable energy adoption
• Facilitate public-private partnerships (PPPs) to expand logistics infrastructure

7. Conclusion

Cold chain logistics is no longer a supporting service—it has become a strategic national infrastructure component. For Jordan, investing in integrated cold chain systems represents a direct pathway to strengthening food security, enhancing export competitiveness, and positioning the country as a regional logistics hub.