Digital Edition

July 3, 2023

Issue link: https://jocdigital.uberflip.com/i/1501964

Contents of this Issue

Navigation

Page 37 of 55

38 Journal of Commerce | July 3, 2023 www.joc.com Cool Cargoes Market Report Special Report would have gotten there eventu- ally. "I think it's comparable to the e-commerce story," Heiligenstein said. "Users who are moving more of that produce and even meal preps are now taking up more market share than they were previously." Coming soon Noting that construction costs for cold storage warehouses are about four times higher than dry cargo facilities, Jessup predicted development in the Southeast US would continue over the next few years despite a cooling econ- omy. That's in part because older facilities, particularly those with higher energy costs, may need to be completely rebuilt, rather than ren- ovated, to keep up with an evolving regulatory environment, he said. "You've had a lot of food inspec- tions with the USDA [US Depart- ment of Agriculture] and the FDA [Food and Drug Administration], and all these things have really changed the whole food landscape in five years," Jessup said. Lineage Logistics in October 2021 opened a 167,000-square-foot cold storage facility at the site of a Also helping to drive domestic demand for food imports and, in turn, refrigerated warehousing, Florida has the fastest-growing population of any US state. More than 22 million people called the Sunshine State home in 2022, a 1.9% increase from 2021 and a 900% increase since the 1950s, according to the US Census Bureau. Outside of Jacksonville, FlexCold is turning to Charlotte, Raleigh and Durham, NC, as well as other cities. In January, the company announced a $50 million investment to build a facility near the Port of Charleston that will come online in 2024. Maersk subsidiary Performance Team and Arcadia Cold have also opened facilities near Charleston in the last year. "Four announcements all were made within the last year, and that just demonstrates the growth that's happening and the cold cargo that the port moves," Chloe Heiligen- stein, an analyst at industrial real estate investment and development firm InLight Real Estate Partners, told the Journal of Commerce. She added that although the COVID-19 pandemic accelerated interest in the region, the market former BASF plant in Portsmouth, Va., located about six miles from the Port of Virginia on the opposite side of the Elizabeth River, a spokes- person for the port said. There are two more proposed facilities in the pipeline. CBRE estimates there are almost 240,000 square feet of refrigerated warehousing under con- struction in Virginia. Lineage Logistics also operates a facility near the Port of Savannah, which has approximately 2 million square feet of cold storage nearby, as does competitor Americold. Devel- opers have begun construction on an additional 190,000 square feet and have proposed projects total- ing another 790,000 square feet, according to CBRE research. Judd Bare, regional sales man- ager at the Georgia Ports Authority, said ports in the US Southeast have handled frozen poultry exports for decades, but the growing regional population has boosted demand for imports of fresh produce. He cited cit- rus from South Africa and avocados, grapes and blueberries from the west coast of South America as key com- modities as Savannah looks to balance its refrigerated exports and imports. "Our focus is now shifting a little bit to drive more volume on the inbound trade, whether that's frozen seafood, fresh produce, phar- maceuticals, you name it," Bare told the Journal of Commerce. "Normally, a lot of that produce has entered Northeast ports like Philadelphia and Newark, NJ, but people are start- ing to recognize the Southeast as a new gateway to service their South- eastern customers." Draying containers from Phil- adelphia or New York–New Jersey to major markets like Charlotte, Atlanta, Birmingham, Ala., and Nashville, Tenn., for example, is also far more expensive than from Savan- nah, Bare noted. Still, Northeast ports remain the dominant source of US reefer imports, maintaining a market share of more than 40% since 2019, according to PIERS. "The birds are circling in Savan- nah right now," he said. "A lot of people are looking at kind of plant- ing their flag here and taking advan- tage of this new market." JOC email: teri.griffis@spglobal.com Shutterstock.com

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - July 3, 2023