Consultant Insight: Warehouse providers adjust for COVID-19

[caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Demand for temperature-controlled warehousing space was already on the rise before the COVID-19 pandemic, but consumer shifts to e-commerce and online grocery purchases have accelerated this trend. As shippers look to hold more inventory close to their customers, some have invested in urban warehousing facilities, enabling fast last-mile delivery. Lineage Logistics, the largest temperature-controlled industrial real estate investment trust (REIT), noted that it has announced 16 acquisitions and executed on 15 new expansions in 2020. “As we reimagine the food supply chain and execute on our company purpose to eliminate waste and help feed the world, we remain focused on driving value for our more than 5,000 customers by operating globally and deploying industry-changing technologies to create efficiencies across our 320 facilities,” Greg Lehmkuhl, president and CEO of Lineage said in a Sept. 16 statement. The company has raised $1.6 billion in equity. Americold, the second-largest temperature-controlled industrial REIT, has also been on an acquisition spree. On Oct. 13, the company announced its acquisition of Agro Merchants, the fourth-largest temperature-controlled warehouse company in the world. While Lineage and Americold primarily focus on food, flowers and other similar perishables, questions remain as to how eventual COVID-19 vaccines will be safely stored in warehouses before distribution to the public. According to a DHL white paper , governments faced a number of transport challenges during the PPE shortages earlier in the COVID-19 pandemic, including equipment warehousing. Warehouses not designated for life science products were used for medical supplies, including PPE, which sometimes resulted in damaged or deteriorated supplies because conditions such as precise temperature and humidity management were not met. In addition, limited real-time transparency on warehouse stock levels limited options for planning an effective last-mile delivery network and made it difficult to make reliable promises to end-users, which created friction in planning processes. Transportation planning and managing multiple carriers posed additional challenges for governments. As the U.S. and other countries prepare for the eventual approval and distribution of COVID-19 vaccines, access to temperature-controlled facilities across the U.S. will be critical. In response, UPS has built two large freezer farms capable of super-cooling millions of vials of a COVID-19 vaccine. The facilities in Louisville, Ky., and the Netherlands, near UPS air hubs, will house a total of 600 deep freezers that can each hold 48,000 vials of vaccine at temperatures as low as -80 C. Meanwhile, FedEx is adding freezers, refrigerated trucks, sensors and thermal blankets. In September, the integrator launched SenseAware ID, which provides real-time updates on a package’s location. FedEx expects to use this technology with the anticipated COVID-19 vaccine shipments. At the center of FedEx’s plan is its Cold Chain Center located at its FedEx Express world hub in Memphis. Opened in 2016, the facility has 20,000 square feet of temperature-controlled storage and is able to store health care shipments separately from other perishable items, like food and flowers. Goods can be stored within three different temperature ranges: frozen (-25 C to -10 C), cold (2 C to 8 C) and controlled room temperature (15 C to 25 C). FedEx also has smaller cold chain facilities in China, France, Germany and Japan. Similar to FedEx and UPS, DHL has its own global network of temperature-controlled facilities. In the United States, the company currently operates 30 specialized facilities with over 11 million square feet of temperature-controlled and certified infrastructure. And in July, DHL Supply Chain announced it would invest more than $70 million to develop additional specialized warehousing infrastructure and technologies in support of its pharmaceutical and medical devices customers. As part of this investment, a new warehousing facility in Indianapolis, Ind., opened in late July and includes 20,000 square feet of dedicated perishable handling space. As COVID-19 vaccines become available, coordination between pharmaceutical manufacturers and supply chain partners will be critical to ensuring save deliveries to warehousing facilities and the coordination of the last miles.

Consultant Insight: Warehouse providers adjust for COVID-19

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