PRW space still growing in the USA despite signs of economic slowdown: taller buildings allow denser racking to maximize usable space and minimize energy costs. Some operators are getting into alternative refrigerants. Scattered responses to annual QFFI/IARW survey show inventories up, but turnover remains about the same.

Build they must for a greater frozen food industry. People keep eating, and there are more mouths to feed every year. Refrigerated warehouse operators have to keep pace, and they do with new construction, expansion and renovation.

Usable freezer space at refrigerated warehouses in the United States reached almost 2.063 billion cubic feet last year, according to the US Department of Agriculture (USDA). That was a two percent increase over 2.022 billion two years earlier, which in turn was a 2.5% gain over 1.972 billion in 2003.

Warehouse operators are evidently making better use of their space, because usable capacity has been growing faster than gross capacity, which was up only 1.3% to 2.543 billion cubic feet as of Oct 1, 2007, versus 2.501 billion for 2005, according to the biennial USDA report released in January.

It's all about rising energy costs, explained Joseph Bove, vice president of engineering at Stellar, Inc., Jacksonville, Florida, which designs, builds and helps equip coldstores. "They're trying to minimize operating costs by making use of every possible cubic foot," he told Quick Frozen Foods International (QFFI).

Including cooler space, usable refrigerated capacity reached 3.256 billion cubic feet last year, a 2.3% increase from 3.180 billion in 2005. Because many operators have convertible space, the actual figures may vary over the course of a year for individual warehouses, let alone for formal reports to the USDA every two years.

Public refrigerated warehouses dominate the frozen segment of the industry, with 1,717 billion cubic feet of usable space, up 2.9% from 1,668 billion in 2005. Private and semi-private operators accounted for only 343 million cubic feet, a decline from 345 million in 2005. But the share of cooler space is higher for private and semi-private operations.

The trend in PRWs is towards fewer but larger installations, and this has been especially true over the past two years, according to the USDA: the count dropped from 823 in 2005 to 792 last year, whereas the decline for the previous two years had been modest, from 827 in 2003. The count of private facilities, by contrast, was up to 709 last year versus 681 in 2005 and 655 in 2003: that means a trend towards smaller operations. Specialized facilities for apple and pear storage have declined steadily.

Refrigerated warehouses tend to be taller now, to maximize storage volume, Stellar's Bove told QFFI. Taller buildings provide more rack positions, and the space between racks and walls is being minimized. Additionally, aisles are becoming more narrow, and storage racks are being extended over cross aisles; where the aisles used to reach from floor to ceiling, they have now been reduced to tunnels at some operations. Canted rack designs are yet another space saving measure.

Even if they can't meet certification standards, warehouse operators are trying to comply as closely as possible with standards of the US Green Building Council's Leadership in Energy and Environmental Design (LEED) program, Bove said, because it's good business practice. Increasing the percentage of usable space by increasing the density of the racks makes it easier to cool the building. So does increasing the R value of the thermal envelope, using lighter colors for roofs to make them more reflective, and installing energy control systems.

But while today's PRWs are larger and more fully-racked, bigger isn't necessarily better as an end in itself, Bove said. That's why there are more but smaller private operations--the better for manufacturers and retailers to serve their customers/stores and make restocking more efficient. Some PRWs are also going after that business; at Jonesboro, Arkansas, Millard Refrigerated Services put up a facility for exclusive use of a Nestle plant making frozen dinners and pizzas under the Stouffer's and Lean Cuisine brands.

California has the greatest concentration of freezer space in the United States, at 209 million cubic feet. Washington comes in second at 136 million and Texas third at 122 million, followed by Florida at 119 million and Georgia at 113 million. But the top two states were actually down from 212 million and 146 million in 2005, and Florida fell sharply from 128 million; whereas Texas and Georgia were way up from 91 million and 69 million.

QFFI/IARW Survey Responses Down

Response to the annual refrigerated logistics survey co-sponsored by Quick Frozen Foods International and the International Association of Refrigerated Warehouses (IARW) was sparse this year--too sparse to draw any concrete conclusions about plans for construction, purchase of equipment, or trends in inventory or turnover. But some responses jump out on a purely anecdotal basis.

While ammonia is the refrigerant of choice for most Among PRW operators in the United States, for example, one regional chain is going with R22, a hydrochlorofluorocarbon that is supposed to be phased out for new equipment by 2010 under the Montreal Protocol for protection of the ozone layer. After 2020, operators will still be allowed to use R22 in existing systems, but suppliers won't be allowed to produce any more of it. Putting in new R22 systems now means getting in before the deadline.

"As R-22 is gradually phased out, non-ozone-depleting alternative refrigerants are being introduced," the US Environmental Protection Agency says at its web-site. "Under the Clean Air Act, EPA reviews alternatives to ozone-depleting substances like R-22 in order to evaluate their effects on human health and the environment. EPA has reviewed several of these alternatives to R-22 and has compiled a list of substitutes that EPA has determined are acceptable. One of these substitutes is R-410A, a blend of hydrofluorocarbons (HFCs), substances that do not contribute to depletion of the ozone layer, but, like R-22, contribute to global warming."

[ILLUSTRATION OMITTED]

Global warming. There's the rub. When the Montreal Protocol was adopted, it was all about ozone--but now HFCs, viewed then as the ultimate solution, are starting to get a bad name. Even ammonia is starting to get a bad name, although, as John A. Charles Jr., president of the Cascade Policy Institute points out, 64% of the ammonia emissions come from livestock.

For the 20th anniversary of the Protocol, delegates in Montreal agreed to cut remaining consumption of (HCFCs) by more than 20% in developed countries between the years 2010 and 2030. Furthermore, they agreed for the first time to a phase down schedule for HCFC consumption for developing countries that will cut overall use by about 50% between 2010 and 2040.

"The new HCFC reductions will assist the recovery of the earth's ozone layer and also help to mitigate climate change," said Nick Campbell, chairman of the European Fluorocarbons Technical Committee (EFCTC). "They will also allow for the more rapid introduction of important technologies relying on non-ozone-depleting substances." EFCTC member companies have played a leading role in the introduction of alternatives to ozone depleting substances.

But both Sanyo and ACC (see compressor feature story on page 124) have developed carbon dioxide systems as an alternative to HFCs and ammonia alike, and United States Cold Storage (USCS), Voorhees, New Jersey, has implemented a CO2 system in partnership with yet another supplier.

For its new coldstores in Bethlehem, Pennsylvania, and Lake City, Florida (See sidebar on this page), USCS teamed up with M&M Refrigeration of Federalsburg, Maryland, to pioneer the development of an all-new C02 refrigeration system designed to maximize energy efficiency and minimize contamination risks.

"We have been working closely with the engineers at M&M to develop and refine next generation food and environment-friendly refrigeration. We appreciate the cost efficiencies and environmental benefits of operating this advanced refrigeration system and have more installations planned for future facilities," commented Charles A. Toogood, vice president of engineering for USCS.

Joseph Bove at Stellar said that company has itself designed and installed CO2 refrigeration systems for food manufacturing and ice cream plants rather than warehouses thus far, but that some of the company's warehouse clients are exploring the CO2 option.

One or two new warehouses a year is often the drill even for major PRW operators. But Campanelli Companies reported last year that it had built or was building 15 facilities in seven states for Preferred Freezer Services, Newark, New Jersey, with more than 1.5 million combined square feet of cold storage warehouse, distribution and office space.

Projects Campanelli has completed for Preferred Freezer include the company's headquarters in Newark, and cold storage distribution centers in Atlanta, Georgia; Philadelphia, Pennsylvania; Norfolk, Virginia; and Raynham, Sharon, and Westfield, Massachusetts. Ongoing projects include facilities in Jacksonville, Florida (completion expected by press time), Elizabeth, New Jersey (ditto), and Everett, Massachusetts (expected completion: second quarter of 2008).

USCS has targeted strategic locations in Pennsylvania, North Carolina, Florida and California. With completion of five projects last year and this year, its capacity exceeds 150 million cubic feet in nine states.

The company aims to double its cubic capacity in response to growth in the frozen food industry and customer demand for specially designed refrigerated facilities offering advanced warehouse technology and integrated transportation and logistics systems.

Enabling each new facility to provide PDQ Logistics[TM] freight consolidation and regional distribution services is the company's TMS (Transportation Management System). This comprehensive logistics program supports cartier relationship management, appointment scheduling, load tendering and efficient building, analysis and network modeling.

Besides building new distribution centers in Fresno, California; Lake City, Florida; Warsaw, North Carolina; and Bethlehem and Hazleton, Pennsylvania, USCS has acquired three facilities formerly operated as Cassco in Harrisonburg, Virginia, and Marshville, North Carolina.

Richmond Cold Storage Company (RCS), Richmond, Virginia, completed expansion of its Richmond facility which offers blast freezing, 184,000 square feet of frozen and refrigerated storage, CSX rail service, a cross dock, and an RFID lab. It is USDA-approved for export and is Russian-certified for pork and poultry.

Hillsboro, Oregon-based Henningsen Cold Storage is building a 5.3-million-cubic-foot, logistics center in the Portland suburb of Gresham that is expected to open this summer. The company is building the 144,000-square-foot facility on two adjoining lots. The 16,000 pallet position facility will complement rather than replace an existing Portland operation that opened in 1996.

Final approval has come from the Louisiana State Bond Commission for $27.5 million for wharf improvements on the Mississippi River to accommodate New Orleans Cold Storage (NOCS), a major poultry exporter. NOCS is moving from an Industrial Canal site because the large vessels it uses can no longer get through the Gulf outlet--a canal nobody wants to redredge because it is thought to have channeled the Hurricane Katrina surge that nearly destroyed the city.

Hanson Logistics, St. Joseph, Michigan, which opened a new consolidation center in Chicago last year, is expanding its value-added services by offering clients top-tier Network Optimization through an agreement with Supply Chain Optimizers, Buffalo, New York, and Toronto, Ontario.

"Transportation costs account for 60% of every logistics dollar and fuel costs are driving that figure even higher," said Andrew Janson, executive vice president of Business Development. "Network optimization is critical. "We bring both high-level vision and front line experience. Their team is highly regarded in the frozen food industry, and we look forward to giving our customers access to their solutions."

Hanson has also added more muscle to the company's growing transportation service with the recent addition of four 2008 Kenworth 800 linehaul tractors. The new trucks, featuring Aerocab sleepers, let Hanson respond quickly to customer requests for regional moves using company equipment.

"Safe, on-time delivery is critical regardless of the carrier," said Janson, "Our fleet expansion, with a longer reach, gives our customers the added security of knowing their refrigerated warehouse provider also has transportation assets in place to handle emergency or unusual load requirements."

More than half of the warehouse operators responding to the QFFI-IARW survey contract out some or all of their trucking. But a number of operations, including even small ones with one to five locations, provide at least some of their own trucks--perhaps to ensure timely deliveries to particular customers. Larger operators are striving to make better use of their fleets.

AmeriCold Logistics, Atlanta, Georgia, expanded its refrigerated network last fall with the debut of LTL Cooler Consolidation programs that provide scheduled less-than-truckload service to more than 8,000 zip codes nationwide.

"While we've historically been a front runner in providing less than truckload consolidation services on a regional and national basis, this program positions us to provide specialized cooler LTL delivery services across the country," said Greg Bryan, senior vice president of the company's Transportation Group. "We believe our cooler programs will effectively put us in a leadership position in the industry and provide our customers with consistent deliveries of small lot products being demanded by retailers today."

Most of the companies returning the QFFI-IARW survey have no more than five warehouses, and thus even a weighted response may not reflect a general industry pattern. Still, it has to be significant that the same sample that reported frozen food inventories generally up reported turnover remaining pretty much the same.

In its most recent report on cold storage holdings, the USDA showed inventories generally up; only in frozen vegetables was there a slight decrease at 2.221 billion pounds for December 2007 compared to 2.225 billion a year earlier. Holdings of frozen fruit were substantially higher at 1.240 billion versus 1.137 billion; likewise juice concentrates at 1.08 billion versus 989 million, and potatoes at 1.012 billion versus 955 million.

In materials handling purchasing plans, standard racks are favored, although most operators responding to the survey aren't planning to buy racks at all. Lift trucks, as usual, are in demand, but not as strongly as last year. Only one company mentioned double as opposed to single-deep racks. Automatic doors are on more purchasing plans than any others, with manual and plastic strip curtains virtually tied for second. There was little expressed interest in mechanical or air curtain doors.

New US Cold Storage Unit in Florida: Strategic Location, CO2 Refrigeration

United States Cold Storage (USCS), Voorhees, New Jersey, USA, has opened a new distribution center in Lake City, Florida, near Interstates 75 and 10. The 5.2 million cubic-foot facility is at the crossroads that serve all the major metropolitan areas of the Southeast.

USCS is also working on Phase Three expansion of its Tulare-North Distribution Center in California, with an anticipated start-up of operations in early August. It already operates two warehousing and distribution centers in Tulare, Tulare-North and Tulare-South, within a quarter mile of each other.

The expansion of Tulare-North will bring the combined capacity to about 21 million cubic feet with 80,000 fully racked pallet positions, making it the biggest operation under one management team in the company's nationwide network. The Lake City facility, meanwhile, will serve other metropolitan centers beyond Florida--among them Atlanta, Georgia, and Birmingham and Mobile, Alabama.

"Our full service operation in Lake City provides a strategically attractive option for food manufacturers, retailers and distributors who want to position themselves for effective distribution throughout the southeastern states," explained Greg Minnich, general manager of the operation. "We provide a state-of-the-art facility, proprietary information systems and a team committed to meet customers' needs, making this an ideal location to serve the region."

Lake City will offer a complete menu of PRW services. The facility is designed for high-volume distribution, including 18,000 variable-height racked pallet positions at temperatures ranging from -20[degrees] F to +55[degrees] F, and supported by 18 truck dock doors and super-wide (60-foot) temperature controlled loading docks. Service features include an advanced AS400 warehouse management system with radio frequency (RF) bar code scanning, and eUSCOLD[R] service which provides 24/7 online access to real-time account data.

[ILLUSTRATION OMITTED]

Equipped with the latest in food safety and security systems, customized handling includes freezing and product tempering, slip sheeting, cross docking, order case picking, CSX rail service, USDA inspection areas and US Customs bonded. USCS's PDQ Logistics and Transportation Management Systems will support customers' southeast region distribution needs through an LTL freight consolidation program, direct-to-store deliveries, and cost-saving logistics analysis tools.

In addition to up-to-date services and facility design and modern construction, USCS is pioneering a new CO2 cascade refrigeration technology that improves operating efficiency and reduces impact on the environment. This next generation refrigeration system builds on current food safety and emissions standards by better utilizing energy and further minimizing contamination risk. It is in use in the company's newest facilities in California, Pennsylvania and Florida.

In Tulare, USCS offers a broad range of services to local, national and international customers by providing dry, refrigerated and frozen food storage, blast or quick freezing, and extensive transportation capabilities. The Phase Three expansion at the Tulare-North facility will add 2.7 million cubic feet of dry storage space, including nearly 11,000 new storage rack positions, and 4.5 million cubic feet of multi-temperature refrigerated space featuring an additional 17,000 pallet positions. USA Usable Freezer Space, 1,000 Pounds Type of Facility 2003 2005 2007 Public 1,586,106 1,668,731 1,717,084 Private, Semi-private 382,169 344,882 343,181 Apple Storage 4,025 8,835 2,486 TOTAL 1,972,300 2,022,448 2,062,751 Source: US Department of Agriculture USA COLD STORAGE HOLDINGS, 1,000 POUNDS Product Dec. 2007 Dec. 2006 Fruit 1,239,540 1,136,531 Frozen Juice Concentrates 1,079,964 989,257 Vegetables 2,221,392 2,225,351 Potatoes 1,012,355 954,820 Beef 482,509 982,079 Pork 458,665 442,501 Other Red Meat 961,556 950,891 Poultry 1,007,260 973,555 Source: US Department of Agriculture