Lineage Logistics Buys Refrigerated Railcar Company Cryo-Trans
The merger makes Lineage Logistics the first cold-storage provider to offer insulated railcar solutions.
Cold-storage warehouse leader Lineage Logistics has acquired Cryo-Trans, the largest refrigerated and insulated railcar fleet in North America. The partnership is a first for the industry giving Lineage Logistics a competitive foothold in the cold-storage market by providing insulated railcar service.
Lineage owns the largest network of temperature-controlled warehouses globally, totaling 330 properties and 2 billion cubic feet of cold-storage capacity in 15 countries. Cryo-Trans manages 40,000 annual rail shipments and owns over 2,200 refrigerated and insulated railcars in North America.
The partnership augments Lineage’s current transportation network, which currently offers such options as including less-than-truckload consolidation, managed transportation, on-demand transport, port logistics, customs brokerage, import/export, drayage, last-mile delivery and related value-added services.
“Cryo-Trans further diversifies Lineage’s comprehensive suite of multi-modal services and creates a unique, under-one-roof solution for our customers in which warehousing and transportation are seamlessly integrated,” said Greg Lehmkuhl, president & CEO of Lineage, in a statement.
During the pandemic, food and beverage items have topped the list of online shopping sales. According to data from JLL, online food and beverage sales have increased 84.9% year-over-year, making the segment the leader in online shopping sales.
While improving demand is always good news, it has created a supply-demand imbalance for cold-storage facilities. Prior to the pandemic, cold storage had a low vacancy of 10%. Growing demand is quickly eating away at the supply.
Adding new supply isn’t as easy as developing warehouse space. This is a specialty asset, and it costs twice as much as warehouse space to develop. A cold storage or freezer facility costs $130 to $180 per square foot to develop, while a traditional warehouse space only costs $70 to $90 per square foot to develop.
The supply shortage is only fueling investor interest, however. Last month, Provender Partners has entered into a joint venture with an affiliate of Cerberus Capital Management LP to build a multibillion-dollar portfolio of cold storage processing facilities in the United States.