Americold Announces Plans for First Cold Storage Facility on CPKC Rail Network in Missouri
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Insights
The development of Americold's new facility in Kansas City is a strategic move that taps into the burgeoning demand for efficient supply chain solutions in North America, particularly in the temperature-controlled logistics sector. This investment is poised to enhance Americold's competitive edge by leveraging the synergies between their cold storage capabilities and CPKC's extensive rail network, which includes the unique MMX service. By situating the facility on a key transportation hub, Americold is likely to see increased operational efficiencies and cost savings, which can translate into improved margins and a stronger market position.
Furthermore, the creation of nearly 190 new jobs is indicative of Americold's commitment to growth and its potential positive impact on the local economy. This aligns with broader industry trends where logistics companies are increasingly integrating with transportation networks to streamline operations and minimize bottlenecks, such as those experienced at the U.S.-Mexico border. The strategic location and the collaboration with CPKC could serve as a model for future developments in the industry, potentially influencing stock valuations not only for Americold but also for other players in the logistics and transportation sectors.
The announcement by Americold to co-locate its new warehouse facilities on the CPKC network represents a significant step in optimizing temperature-controlled logistics in North America. The integration of Americold's cold storage expertise with CPKC's TempPro™ temperature-protected intermodal containers is expected to offer a substantial value proposition to customers looking to transport goods between the U.S. Midwest and Mexico. This could lead to a reduction in transit times, transport costs and food waste, addressing key issues within the supply chain.
From a logistics standpoint, the ability to bypass truck congestion at the border is a major advantage that should not be underestimated. Congestion often leads to delayed shipments and increased costs, which can ripple through the supply chain, affecting everything from inventory levels to customer satisfaction. By mitigating these challenges, Americold can strengthen its customer relationships and potentially attract new business, which could positively influence its revenue streams and market share within the industry.
The $127 million investment into the Kansas City facility signifies Americold's strategic capital allocation towards expanding its operational footprint and service offerings. This expansion is expected to enhance shareholder value by capitalizing on the growing need for efficient temperature-controlled logistics, a sector that has seen increased demand due to shifts in consumer behavior and the global emphasis on food safety and waste reduction.
The financial implications of this investment will be closely monitored by investors and analysts, as Americold's ability to execute on this project and realize the projected efficiencies will be critical to its financial performance. The long-term benefits, such as potential revenue growth and cost savings, must be weighed against the upfront capital expenditure and the time required to achieve full operational capacity. The market will also be looking for signs of how this strategic collaboration with CPKC might impact Americold's earnings before interest, taxes, depreciation and amortization (EBITDA) margins and return on invested capital (ROIC) in the coming quarters.
Facility in Kansas City Will Help Connect Key U.S. Midwest and Mexico Markets
Builds on Americold’s Strategic Collaboration with CPKC
to Optimize Temperature-Controlled Logistics in North America
ATLANTA, GA., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Americold Realty Trust (NYSE: COLD), a global leader in temperature-controlled logistics, real estate, and value-added services focused on the ownership, operation, acquisition and development of temperature-controlled warehouses, today announced plans to develop its first facility through a strategic collaboration with Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) to co-locate Americold warehouse facilities on the CPKC network.
“Americold’s selection of Kansas City for its new facility is another example of Missouri’s ability to attract leading businesses,” said Governor Mike Parson. “This company’s decision speaks to the value of our strategic location, skilled workforce, and superior infrastructure. We look forward to Americold’s success as it strengthens supply chains for international trade and brings new investment to the Kansas City region.”
Americold is investing
“We are excited to kick off our strategic collaboration with CPKC through our new Kansas City cold storage facility, expanding Americold’s presence in an important U.S. transportation hub,” said George Chappelle, Chief Executive Officer at Americold. “Combining our cold storage capabilities with CPKC’s extensive rail network enables Americold to deliver a differentiated offering to support more customers across North America. We look forward to further collaboration with CPKC to provide world-class service to more customers and strengthen the food supply chain.”
“Americold’s Kansas City facility marks the first of many new Americold warehouse facilities we intend to see built on the CPKC network as part of our strategic collaboration,” said Keith Creel, CPKC President and CEO. “Our unmatched Mexico Midwest Express (MMX) premium intermodal service will enable Americold customers to transport goods between the U.S. and Mexico more efficiently and effectively than ever before. We look forward to continuing to grow with Americold as we support the cold storage ecosystem.”
The new facility will support CPKC’s MMX service, North America's only single-line rail service offering for refrigerated shippers between U.S. Midwest markets and Mexico. It will also enable more seamless and efficient service for MMX customers. By combining CPKC’s fleet of TempPro™ temperature-protected intermodal containers with Americold’s unparalleled cold storage logistics expertise, both companies will be able to help customers bypass significant truck congestion at the U.S.-Mexico border and reduce transit times, transport costs and food waste.
Pending local approvals, the company plans to begin construction in the first half of 2024.
Missouri Partnership, a public-private economic development organization focused on attracting new jobs and investment to the state and promoting Missouri’s business strengths, worked with several partners to attract Americold to Kansas City, including: the City of Kansas City, Economic Development Corporation of Kansas City, Missouri, KC SmartPort, Missouri Department of Economic Development, Missouri One Start, Evergy, and Spire.
About Americold Realty Trust, Inc.
Americold is a global leader in temperature-controlled logistics real estate and value-added services. Focused on the ownership, operation, acquisition, and development of temperature-controlled warehouses, Americold owns and/or operates 243 temperature-controlled warehouses, with approximately 1.5 billion refrigerated cubic feet of storage, in North America, Europe, Asia-Pacific, and South America. Americold’s facilities are an integral component of the supply chain connecting food producers, processors, distributors, and retailers to consumers.
Forward-Looking Statements
Statements contained in this press release that are not statements of historical fact, including those that refer to the Company’s strategic collaborations with third parties, associated benefits for customers and timeline for completion are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currently available to us. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements, and you should not place undue reliance on such statements. Information about potential risks and uncertainties that could affect the Company’s business and financial results is included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other documents the Company files with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances, except as required by applicable law or regulation.
Contacts:
Americold Realty Trust, Inc.
Media Relations
Email: mediarelations@americold.com
Investor Relations
Email: investor.relations@americold.com
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