From Our Print Edition

Article by Dematic exec says need for longer-term contracts with customers, outdated software and high labor turnover also hurt efficiency and profits.

A September article in Forbes says public refrigerated warehouses (PRWs) need to move toward more automation or they will “continue to struggle to fill demand,” while profits and stakeholder returns suffer.

LABOR TURNOVER 32.6%

The article, contributed by Tom Steininger, market development director of Atlanta-based Dematic (dematic. com), notes that PRWs must work toward longer-term contracts with food manufacturers and grocers – and the financial stability that comes with doing that. That’s no easy task for an industry with an annual labor turnover rate that averaged 32.6% last year.

“COVID-19 brought new pain points for PRWs – more frequent (yet smaller) orders and delivery inconsistencies. For example, instead of supplying a full pallet of a single product to a warehouse, PRWs are now delivering a pallet with multiple products directly to a store. Such smaller orders increase labor requirements and drastically changes transportation options,” according to the Forbes article.

It states that outdated software is also a sore spot for PRWs, despite up-to- date technology being essential to manage inventory visibility, accuracy, order fulfillment speed, quality assurance and productivity. Still, there has been limited software investment among PRWs (both before and during the pandemic), the article adds.

The growth of e-commerce suggests the need for an additional 75 to 100 million square feet of industrial freezer/cooler space, says Steininger, citing research by global real estate services firm CBRE Group (cbre.com), Los Angeles.

At least part of the solution for PRWs may lie in greater use of automated guided vehicles for transporting and storing pallets, or automated storage and retrieval systems that can handle pallets, totes, trays, bins and cartons, Steininger explains.

The article says that Ahold Delhaize recently advanced its automation program, with an integrated temperature- controlled warehouse solution that includes goods-in-receiving, automatic delayering, tray handling, sortation, automatic pallet building, dispatch trailer sequencing and ergonomic case picking.

LINEAGE LOGISTICS RAISES $1.6 BILLION

Capital will be used “to pursue new acquisitions and organic expansions” and “further investment in technology and automation.”

Lineage Logistics (lineagelogistics.com), Novi, Mich., has raised $1.6 billion in equity from new and existing strategic partners. Investors include Oxford Properties Group, BentallGreenOak, D1 Capital Partners, Cohen & Steers, OPTrust, CenterSquare Investment Management, and investment funds managed by Morgan Stanley Tactical Value, among others.

“This significant investment – from both new and existing investors – is validation of our business model, our innovative strategy and our plans to continue expanding our footprint as the world’s largest temperature- controlled warehousing and logistics company,” said Greg Lehmkuhl, president and CEO of Lineage.

Lineage has more than 5,000 customers and 320 facilities. This year, it has completed 16 acquisitions and executed on 15 new expansions and greenfield facilities. It continues to develop a number of the world’s most advanced fully automated warehouses that will reduce environmental intensity, while providing flexible and expansive capacity for customers during a period where the global pandemic is putting acute strain on the global food supply chain. New capital will fuel these increasingly large investments, according to the company.

In conjunction with this capital raise, Oxford Properties’ president, Michael Turner, will join Lineage’s board. Two executives were named board observers at Lineage: John Carrafiell, a founder and senior managing partner of real estate investment management and advisory firm BentallGreenOak; and Zhang Xin, CEO of SOHO China, one of China’s largest and best known commercial property developers.

CEG Construction (cegconstruction.com), Pico Rivera, Calif., is nearing completion of a 22,908-square-foot freezer in South El Monte, Calif. it will be equipped with two Dambach automated retrieval system cranes serving high-density racking systems providing 5,748 pallet positions. The structural steel freezer is wrapped in 64-foot-tall, six-inch-thick insulated panels on top of two slabs. CEG is leading a team including Clarion Construction (refrigerated panel system), D&M Steel (structural steel building shell), Mechanic Refrigeration (refrigeration systems), and Bastian Solutions (ARS systems).