Cold storage space is at a premium in North America and there is little sign of a let up.
Demanding Business. Temperature-Controlled Warehousing, “Cold Storage” space is at a premium and there are few signs that the squeeze on facilities will abate at any time soon.
Although there are a number of reasons for the growth in demand for cold storage space, fundamentally it comes down to an increase in the movement of perishable goods.
For example, perishable imports were steady even during the period of the COVID-19 lockdowns. Consumers dropped buying durables and shifted to consumables like foodstuffs. And even in this post-pandemic shift back to more retail oriented sales, the trade in perishables continues to flourish. (See Peter Buxbaum story on page 10)
Descartes Datamyne, a company specializing in the collection of international trade data, in a recent trade and analysis paper noted U.S. imports of perishable goods are still posting high volumes. According to Datamyne thus far 2021 imports are 11.58% higher than the same period in 2020 and more importantly, 19.1% over pre-pandemic 2019, as measured in terms of TEU (twenty-foot equivalent units).
The biggest contributor to the perishable trade is the ubiquitous banana. It is still king of crops in the perishable business by volume, although the avocado has challenged the bananas’ dominance in monetary terms. Around 43% of the banana imports come from Guatemala with other Latin American nations splitting up most of the remaining volume. According to Datamyne, bananas still remain the top perishable import item by volume for U.S., although statistically the banana has slipped some in market share in 2021. In 2020, bananas (imported under HS 0803) represented 22.7% of perishable imports (as measured in TEUs) but has declined this year (2021) to 19.6%. Whether the decline is an anomaly or a trend is still too early to call, as post-pandemic consumer spending habits have yet to find the “new normal.”
The consumer habits developed during the lockdowns – ordering food online or arranging pickups, the trend among the young for the delivery of more fresh produce and other perishables to the home is not likely to stop even with a full return to pre-COVID status of traditional retail food stores. According to a Deloitte study, the online share of all food and beverage sales surged to more than 10% during 2020 and the trend seems to be continuing even with the opening of bars and restaurants. Travel is also still chaotic and consumption in restaurants and hotels is up but not to pre-COVID marks. What the U.S. economy (and indeed the global economy) will eventually look like is still a bit of a mystery but nonetheless, perishables imports have become a big part of the story for the rising demand for cold storage space.
International Association of Refrigerated Warehouses (IARW) annually publishes a list of the top cold storage companies. Notably, IARW’s list is remarkably top heavy. In the IARW’s latest version Lineage Logistics headquartered…
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