Hello, and welcome to the coolest community in freight! Here you’ll find the latest information on warehouse news, tech developments and all things reefer madness-related. I’m your new controller of the thermostat, Mary O’Connell. Thanks for having me!
All thawed out
Jacksonville, Florida, home of cold storage. While at first glance that is not an intuitive description of the city, maybe it’s not weird by Florida standards. As it turns out, there is a booming industry of cold storage distribution centers in Jacksonville. Cold storage demand traditionally follows population growth and demographic changes. With the rise in people moving south, there is more demand, specifically in food and beverage, in states like Florida, Arizona and Texas, resulting in the need for more cold storage capacity.
CBRE, a commercial real estate company, has found that e-commerce’s share of total U.S. grocery sales is expected to rise from 13% in 2021 to 21.5% by 2025. This sudden growth is pushing existing cold storage supply chains to the limit, spurring the demand for new facilities.
Vacancies are at 3.3% in Florida, except Jacksonville, where it’s even lower. FlexCold is opening a 150,000-square-foot cold storage warehouse 3 miles from Jaxport’s Blount Island Marine Terminal. After that facility, FlexCold is opening another 170,440-square-foot facility in about the same area. Just about everyone is trying to get a piece of the cold storage pie in Jacksonville. Could be a cold rush to be had as primary imports to the port are poultry, grocery items, beer and animal feed and volumes aren’t expected to slow down anytime soon.
Temperature checks
Maersk has been a busy bee. It is opening another cold storage facility, this time in Saudi Arabia. This is on top of its already announced plans to build cold chain facilities in Pakistan, Norway and China. These are just the plans the company has announced since the end of November. This new facility will be 143,160 square feet and is designed to handle 168,000 pallet positions annually at Saudi Arabia’s second-largest port for refrigerated containers.
Quotable moment from the press release: “Saudi Arabia is a significant market for us,” said Mohammad Shihab, managing director at Maersk Saudi Arabia. “With more than a fifth of the country’s food imports coming through King Abdulaziz Port in Dammam, we wanted to establish a state-of-the-art cold storage facility that will help us serve the food industry better.”
Food and Drugs
Frozen convenience food has been a staple of homes for decades, pretty much since the concept of a TV dinner came around. What has grown to be a staple of most American’s diets, beyond the Hungry Man and Lean Cuisine meals, is turning into a market projected to be worth about $297 billion by 2027, according to Bonafide Research. Consumers are seeking out more ready-to-eat and convenience foods with low prep and cooking time. Ready-to- heat meals solve that problem, which is causing the frozen food market to grow roughly 4.76% annually.
The frozen food industry has seen steady growth since the pandemic, as people gravitated toward foods with longer shelf lives. Decreasing grocery store visits and preparing for potential food shortages motivated consumers to shop frozen during the pandemic. Frozen potatoes and meat and poultry together constitute over 55% market share of frozen foods. The freezer-to-microwave food pack is expected to be in huge demand due to its ease of use. Veganism is an emerging trend as well, stimulating demand for pure and natural frozen foods.
The commercial segment’s primary use is for frozen ingredients (vegetables, meat, seafood, etc.) the current leader of demand. However, consumers are quickly making up ground. By the end of 2027, consumers are expected to outpace the commercial segment. Meaning more meals and “quick fix” options will be necessary over the traditional commercial needs. Here’s hoping grocery store freezer sections are prepared.
Cold chain lanes
Wait times in the four largest markets in the U.S. are well above the national average of 120 minutes. Knowing what the wait times are in various markets can give insight into capacity constraints in the market — high wait times, tight capacity and vice versa. On the flip side, if shippers look at markets they have pickups or deliveries in with a pretty reasonable assumption, they can know if their shipment will likely be delayed. Carriers are going to maximize their network efficiencies this year as the driver pool continues to dwindle as more drivers leave the industry through retirement or the inability to travel to certain states. Most notably, wait times in California are likely to increase as new emissions regulations could prevent trucks over 14,000 pounds from operating in the state.
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Shelf life
‘Old faithful’ reefer vessels will be forced out by new pollution rules
Goldfish relaunches LTO with Frank’s RedHot
BFFF celebrates 75th anniversary and frozen food boom
Groceries become even more expensive, especially frozen food
OK with the change in management? Shoot me an email with comments, questions or story ideas at moconnell@freightwaves.com.
See you on the internet.
Mary
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