Millions of dollars worth of frozen food is at risk of being stranded after the collapse of a major transport company. 

Suppliers are racing to recover $500 million worth of frozen food from refrigerated warehouses that belonged to the recently collapsed Scott's Refrigerated Logistics.

The company recently announced it would make most of its 1,500 workers redundant, with only a skeleton staff remaining. 

At a creditors meeting last week, administrators reported a loss of $41 million for the current financial year. 

The freight company appointed Korda Mentha as the receiver after entering voluntary administration.

Korda Mentha says the race is on to relocate over 110,000 pallets of frozen goods worth half a billion dollars from Scott's cold storage warehouses. 

Refrigerated Warehouse and Transport Association chief Marianne Kintzel says that the speed of Scott's liquidation is challenging. 

“Taking 750 trucks and 200,000 pallet spaces out of the market in a week is very hard to absorb,” she told reporters. 

“A more planned rundown would have helped supply chain stability and reduced waste.” 

Ms Kintzel noted that there is not enough warehouse capacity elsewhere to cover the loss of Scott's, which was one of the biggest transporters in the market. She said that other cold-chain companies were working together, making “thousands of phone calls” to fill the gap. 

However, the cold-chain sector is being affected by labour shortages, high fuel costs, insurance, tolls, and energy expenses. Building and maintaining refrigerated warehouses is one of the biggest costs, with margins being very tight due to the incredibly competitive nature of the industry.

Supermarket giant Coles says it has removed all its stock from the Scott's network and does not use its warehouses, but the situation is different for its suppliers. 

Transport Workers Union assistant national secretary Nick McIntosh has pointed out that the potential shortages in supermarkets are a short-term problem, but part of a larger issue. 

“We know there is a lot of stock caught up in Scott's warehouses as we speak, that some of these clients are struggling to get to and transport to other areas in time before it all goes off,” he said. 

Mr McIntosh said it is a problem governments have ignored for decades, and it is now time to address the commercial pressures in transport contracts. 

“Otherwise, we're going to see shortages on our supermarket shelves as a more regular occurrence, and of course, in a time of high inflation, that's going to make matters even worse,” he said. 

Meanwhile, rail freight company Pacific National is helping previous customers of Scott's to locate stock scattered around Australia. 

Pacific National CEO Paul Scurrah said work was underway to track down thousands of refrigerated containers deposited by Scott's within Pacific National's network of depots and terminals. 

The Transport Workers Union is also assisting members who lost jobs at Scott's in finding work with other companies.