As the icy winds of 2024 whip around us, whispering promises of innovation and expansion, the tale of the cold storage industry unfolds, echoing a resounding success story. The year 2023 saw grand openings, ground-breakings, and acquisitions that marked a turning point, and the cold supply chain in the United States is poised to soar to even greater heights in the coming year.
A Global Deep Freeze: The Icy Landscape
In a world where cold storage is hailed as critical infrastructure, Jason Fincher, VP of Strategy and Logistics at Cold Summit Development, envisions a future where the seamless flow of sustenance is not just a necessity for the nation, but a global imperative. According to Research and Markets, the cold storage construction market is projected to reach a staggering $32 billion by 2030, with the United States leading the chilly charge alongside economic powerhouses like China, Japan, Canada, and Germany.
Supply Struggles and Speculative Ascents: A Balancing Act
As demand for cold storage space continues its relentless surge, CBRE predicts a three to five-year struggle to keep up, with speculative cold storage developments reaching a colossal 3.3 million square feet in the U.S. by the end of 2022. Investor interest in this icy realm has spiked, reflecting a paradigm shift where 40% of respondents in CBRE's survey set their sights on cold storage assets in 2023, up from 22% in 2021.
IWI Kingman: A Frozen Phoenix Rising
Enter IWI Kingman, a symbol of this frozen revolution. With 30,000 pallet positions, 43 dock doors, and plans for expansion up to 1.2 million square feet, it stands as a testament to the dynamic growth of cold storage. Yet, as John Tippmann III, EVP of Tippmann Group/Interstate Warehousing, observes, challenges loom on the horizon. The cold storage boom brings forth a paradox – a surge in space yet an anticipation of shifting products for reasons ranging from logistics to pricing.
Hot Cities and Expanding Horizons: The Sun Also Shines on the Cold
The ports of Miami, Oakland, Long Beach, Savannah, Mobile, and Wilmington have emerged as hotspots in the cold storage saga. Eric Casey, EVP of Ports at Cold Summit Development, foresees a future where ports strategically integrate cold storage to cater to larger vessels, transforming them into recession-proof havens.
Architectural Alchemy: Divergence in Design
The year 2023 witnessed a multitude of projects, each a unique thread in the cold storage tapestry. Marty Khait, Co-founder of Yukon Real Estate Partners, highlights the excitement in experimentation. From smaller format buildings in Massachusetts to mobile racking and multi-tenant designs, developers are crafting a new narrative in the cold storage landscape.
Automated Ice Giants and the Tech Frontier: Robots on Ice
NewCold, with its highly automated facility in Indianapolis, leads the charge in embracing technology. Mike Shawgo, VP of North American Operations, envisions a future where automation seamlessly integrates with legacy operations, revolutionizing the industry's landscape.
Future Frost: Groundbreaking Projects on the Horizon
As 2024 unfolds, the cold storage saga continues. Projects like Core X Partners' $200 million Indiana site and Vertical Cold Storage's facility near the Kansas City intermodal terminal promise groundbreaking additions. Meanwhile, the prospect of Lineage Logistics going public looms large, with the company exploring an IPO targeting a valuation exceeding $30 billion.
Conclusion: Frosty Frontiers Await
The New Year brings promises of unprecedented growth, technological marvels, and potential market shifts. As we embark on this journey, the cold supply chain stands poised to redefine success in 2024. So, buckle up and prepare to be swept away by more change. The cold storage industry is on a thrilling ride!
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