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Cold storage business heats up

By Timothy J. Gibbons
Published by Florida Times-Union on June 24, 2006.

Twin forklifts dance around each other in the frigid air, readying pallets of fish, shrimp, pancakes and other delicacies for their final trip.

The shrimp, to pick one, began its journey days ago, in Thailand, and was sojourning in ICS Logistics' Industrial Cold Storage facility in Jacksonville - a huge, literally freezing, cold warehouse on the Westside - before being loaded into equally cold trucks for a trip to distributors and supermarkets.

The huge blast cells in ICS's facility pump out air that's 20 degrees below zero, numbing ears and freezing nose hairs within moments. But that's the warehouse. In the executive suites of many in the cold storage business, the industry is heating up, as local players clamor for more space and national companies eye Jacksonville as a likely site for expansion based on the pending arrival of Asian shipping company Mitsui OSK Lines Ltd.

The Jacksonville Port Authority has been giving tours to a number of national players, among them AJC International, Preferred Freezer and Americold, the largest refrigerated warehouse company in the country.

As the area's businesses ramp up for the pending arrival of MOL, which will open up trade lanes between the First Coast and Asia, much attention has been paid to the effort to lure distribution centers here. At the same time, the refrigerated food industry - including the warehouses that store cold or frozen goods as well as ships and trucks that transport products - is quietly growing.

Earlier this week, Crowley Maritime Corp. announced it had purchased 457 new refrigerated container units, increasing its fleet by about 20 percent. "Our reefer business is very strong," said Rob Grune, a Crowley senior vice president. "We want to be able to grow with the market we're in."

In part, local growth is a side effect of the deal signed with Mitsui, the largest carrier of U.S. meat exports in 2005. At the same time, local businesses like ICS, Caribbean Shipping and Cold Storage and Burris Logistics have also seen their fortunes bolstered by general growth in the trade of refrigerated goods.

"It's growing, and you're going to see it keep growing," said Bill Hudson, president and chief executive officer of the International Association of Refrigerated Warehouses, based in Alexandria, Va.

Perishable products include chicken going to Russia, seafood going to Asia and oranges going all over the world. Imports include bananas, flowers and fish, much of it from Central and South America.

The Asian market is as important to those who trade in perishable goods as those who handle dry goods - but with refrigerated products, Asia is a consumer, not a producer.

That's one reason the cold storage and shipping business is heating up in Jacksonville: Most of the distributions centers setting up operations here are excited about the possibility of bringing product in from Asian countries. Exporters of refrigerated cargo are looking forward to Asia as a consuming market, one that received more than half of the industry's cargo in 2005, according to the Port Import Export Reporting Service, a figure that's up about 10 percent from 2004.

Mitsui's decision to come to Jacksonville has also helped indirectly, said industry figures like Terry Brown, president of ICS Logistics: It validates the area as a distribution hub ICS, for example, has seen its business grow so much - at times last quarter its warehouse was more than 100 percent full- that it is evaluating sites for expansion.

"There have been people who for a long time have been saying that Jacksonville makes a lot of sense for distribution centers," Brown said.

"By MOL choosing Jacksonville as its East Coast hub, it brings a lot of credibility."



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This is a showcase of the work done by Timothy J. Gibbons during a journalism career now stretching back more than a decade.

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